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The Different Ways Operations And IT Approach Supply Chain Digital Transformation

Supply chain digital transformation sees businesses consider implementing a wide range of strategic changes to its production and distribution models. For the digital transformation of a supply chain to succeed, the company needs to have access to data that is harmonized across all nodes and free of errors and anomalies. The endpoint of digital transformation differs depending on where the company sees itself. For some businesses, digital transformation will be complete when they can utilize AI to provide real-time insights based on their data. For others, it may be the use of IoT devices to generate data that can then be used to make for a more efficient production and distribution network.

Regardless of the endpoint, businesses can utilize these technologies to lower their costs and increase their productivity. The major stakeholders in implementing these technologies are the IT and operations departments. While the business goals unify the company in what they want to be done, each of these departments sees digital supply chain evolution differently. The differences in vision and implementation of digital supply chain transformation are apparent when approached from these two perspectives.

Outlook on Current Technology

A recent survey done by SAP insider reveals how both operations and IT see their current technological capabilities. While SCM operations for most businesses seem to think that they follow industry-standard practices in implementing security protocols and tools, IT for those businesses consider the company’s conformity to the industry standard to be far less. The same disconnect can be seen in opinions about the company’s ability to maintain harmonized data, and the capability of a business’s platform to collaborate and plan supply chain distribution with suppliers.

The difference in opinion may not be such a significant issue when one considers that the IT department may have a better grasp of the realities of the conditions than the operations department. The most significant problem that may be at fault for this difference of opinion is communication between IT and SCM operations. By informing operations of the capabilities of the system more efficiently, IT can better expect operations to appreciate the shortcomings of the company with practical evidence to support their statements.

Technology Investments Also Viewed Differently

Both IT and SCM operations agree (more or less) with the importance of investing in warehouse management systems and performance analytics. However, SCM operations managers think that more investment should be dedicated to advanced planning technologies. IT tends to believe that planning capabilities are less critical to a business’s growth. Again, this could be put down to a perspective-based evaluation of the company’ Operations has a better idea of what the market needs in terms of planning to ensure that the company gets the technological support it needs to deal with its customers.

The difference of opinion highlights the issue of communication locks occurring in both directions. In this case, however, the operations managers need to align with IT regularly to ensure that they are aware of the technological restraints of the current system and inform the IT department of their needs going into the future. By presenting evidence to the IT department and keeping them abreast of what the company is aiming to do, operations managers close the gap in opinions and allow everyone within both departments to operate as a unit.

Understanding the Needs of Both Departments

For successful digital supply chain evolution, a business must have both the right people in the right positions as well as appropriate infrastructure and data to enable them to make the right decisions. To ensure all members of IT and SCM operations are aware of the situation in each other’s’ departments, regular meetings should occur. Future technology investments may be a point of contention between IT and operations, so allowing the departments to come to a join conclusion based on evidence may be the best way forward. While operations managers would prefer implementing better planning and analytics methodologies, IT should also be consulted instead of merely going with the SCM Operations manager’s suggestions.

In this article we learned that, in a company, the operations department may see the digital evolution of the supply chain differently to the IT department. While both  IT and SCM operations agree (more or less) with the importance of investing in warehouse management systems and performance analytics, it is the operations department that places a much greater importance on planning capabilities.
To help align their goals, operations managers need to communicate with IT regularly to ensure that they are aware of the technological restraints of the current system and inform the IT department of their needs going into the future.

 

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