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February 18, 2016

Supply Chain Execution Convergence 101: The Future is Now

As supply chains become increasingly global and more complex, consumers become increasingly demanding, and markets become more and more competitive. All of these developments call for smarter, more efficient supply chains. One turnkey approach is supply chain execution convergence (SCEC), a concept first named by Gartner in 2009 but just beginning to pick up the momentum needed to revolutionize suppy chains worldwide. In this article we will define SCEC and list the steps your company must take to get started.

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What is Supply Chain Execution Convergence?

Supply chain execution convergence aims to unite each division of the supply chain (purchasing, manufacturing, logistics, warehousing, etc.) to improve the entire process. Taking this big-picture approach should reap bigger and faster benefits across a supply chain, most of which are highly segmented today. 

According to Gartner, "next-echelon supply chain execution value will materialize as functional silos are broken down and business processes span, optimize and synchronize across traditional functional domains." 

Why Does it Matter? 

SCEC is truly the key to future supply chain success, and now is the best time to get started. As you will find out, it comes with several benefits, including: 

  • Better collaboration 
  • Increased visbility and transparency
  • Supply chain optimization 
  • Shift from reactionary to proactive approach
  • Focus on continuous improvement 

Where Do I Start? 

You can't expect to achieve SCEC overnight, so don't get discouraged if the process takes longer than anticipated. Following the steps below will help guide you on your path toward total supply chain convergence.

1. Establish Goals 

Determine exactly what you're trying to accomplish. What data is most important? How should it be gathered, analyzed and presented? Who will be on the receiving end? You can't start on the path to supply chain execution convergence until these questions are answered. One consideration should be the capabilities and constraints of each department. Be ambitious but also realistic, and remember to formulate goals for the business as a whole rather than individual departments.

2. Put the Right Technology in Place

You need to have a strong system established to handle the high-level, collaborative processes that need to take place to truly achieve supply chain execution convergence. This can mean utilization of the cloud or sophisticated, interconnected systems. Currently, each segment of the supply chain probably has its own systems and technology that work for them, like transportation management systems (TMS) or warehouse management systems (WMS). One recommended approach would be to use a single software provider for tailored programs to ease integration, increase efficiencies and reduce costs.

3. Tackle Internal Convergence First

If your organization is struggling with internal convergence, how successful do you think external convergence will prove to be? Chances are the results won't be very favorable until you do some major work internally. Make this a priority and get the entire team on board. Sync systems, steamline processes and align goals to benefit the organization as a whole. 

4. Seek Compatible Business Partners

As your company grows and you edge toward SCEC, it will become increasingly important to select only like-minded business partners who share your goals and are willing to make necessary advancements to achieve them. Otherwise you could end up backtracking in your efforts. 

5. Move on to External Convergence

The more global your supply chain, the more critical acheiving SCEC will become. Since transportation is the common link between the silos of every supply chain, this will be your main focus. Once you have those like-minded business partners in place, external convergence should become a natural next step. Utilize those technologies you already put into place. 

6. Focus on Continuous Improvement

Like every other business process, the work does not end once you reach true external convergence. As new business partners come to the table, different regions enter your market or unexpected challenges arise, you'll need to tweak your SCEC gameplan and goals. Revisiting your plan often will keep it relevant and remind you what your initial intentions were, ultimately keeping the organization aligned. 

You must always operate in the mindset of continuous improvement. To get started on streamlining your organization's problem solving strategy, check out the Plan-Do-Check-Act (PDCA) Cycle Excel template below.

Read More:
3 Ways Wearables are Reshaping the Supply Chain
5 Tips to Diversify Your Supply Chain
5 Tips to Reduce Supply Chain Risk



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Filed Under: Supply Chain Management