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Does 'Navel-Gazing' Deliver the Best Visibility?

navel-gazingWhen it comes to developing reliable supply chain connections, it's important to consider that there are multiple sources of data that produce multiple instances of the data that is collected. The majority of manufacturers have at least 2 sets of applications that are used for managing their supply chain. Those include an ERP system and an EDI/transaction management system. The question is, which application set can deliver the best and most reliable visibility into the supply chain?


Intuitively it would seem that the system that contains the most current and wide ranging set of data would be the logical place to look for activity, trends, and errors. And that system would be the EDI/transaction system. However in the study Supply Chain Visibility in Business Networks – 11 MAR 2014  performed by Supply Chain Insights, one conclusion is that more companies have the best confidence in their ERP systems to provide the visibility they need.

The study looked at various segments of the supply chain operation and points out that the greatest gaps in confidence levels exist in segments of the supply chain that are outside the company. That seems obvious if the company is relying on its ERP system, since those systems typically focus on activities within the enterprise rather than externally. 

The study also found that almost half of IT spending in 2013 went to ERP projects even though only slightly over 1/3 of the companies in the study reported they were getting the kind of visibility they needed from their systems.

True real-time visibility is less likely to come from internal ERP systems than it is from advanced EDI/transactional systems that live outside the enterprise and manage data from multiple trading partners. Bringing together data feeds from a combination of entities involved in various aspects of manufacture, delivery, sales goes far beyond what is possible using internally focused systems. In addition, when the data is aggregated from sources that are similar to, or even competitors of the enterprise (and anonymized properly) analysis and planning can provide deep insights into trends that are simply not available when only looking inside or even down a limited chain of supply. Companies looking for better visibility should shift at least some portion of their IT budget toward systems that can support full and current visibility along their entire supply chain.

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Scott Koegler

Scott Koegler is Executive Editor for PMG360. He is a technology writer and editor with 20+ years experience delivering high value content to readers and publishers. 

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