Supply chain complexity is on the rise

[Randy Littleson]

I came across this article highlighting data from new Microsoft and Infosys research, detailing how much high-tech supply chains have increased in complexity. For anyone working in this space, this won’t be news, but I always find it interesting to put some hard numbers behind the reality we’re seeing unfold in front of us.


According to the research, companies reported:

• a 62% increase in the number of suppliers they manage
• a 66% increase in the stock keeping units they handle
• sharp increases in:
  • the number of production locations managed (59%)
  • the number of geographies managed (63%)
  • the number of demand channels managed (59%)

Many also complained of a lack of tools to manage this complexity. Most companies that I’ve seen who are heavily outsourced first struggle with supply chain visibility. When outsourcing relationships are established, too often companies fail to put in place - right up front - the needed supply chain visibility to ensure that all parties are seeing the same set of facts and able to collaborate to resolve issues. And, that is at the heart of it - solving issues. The goal is not to micro-managing your partners. After all, you hired them for their expertise and need to let them get their job done.


But, at the same time, you’re still accountable for the end result since customer satisfaction falls squarely with you. If you don’t have supply chain visibility, you have little to no hope of playing the active role you need to play in dealing with the inevitable unplanned events that come about as a result of the growing complexity of your supply chain and the increasing volatility of your business.


What I’ve found best-in-class companies do exceptionally well is that they start with the relationship with their suppliers - establishing a win-win environment right up front with shared goals and objectives. Then, they put the people, processes and tools in place to ensure those objectives are met, and many of these need to span the organizations to ensure that the cross-functional, multi-enterprise teams are able to collaborate and work closely together to deal with situations as they rise. Best-in-class brand owners don’t look to do the jobs of their partners, but they establish mechanisms to ensure supply chain partners can effectively do their jobs because they know that the end result they are accountable for is dependent on this level of collaboration.


Randy Littleson is a Vice President for Kinaxis, provider of the on-demand RapidResponse service that empowers multi-enterprise manufacturers with the collaborative and integrated demand-supply planning, monitoring, and response capabilities.