The New Intelligence For many years, a wide variety of enterprise-wide packaged applications, from Enterprise Resource Planning (ERP) to Manufacturing Resource Planning (MRP) systems, have been available for the automation and management of business processes in corporations. that were heavily involved in the industry or in some value chain of those characteristics.
In particular, the application modules “devoted” to manufacturing and supplier relationships in ERP packages, primarily Baan, Oracle, and SAP AG, achieved wide adoption of their products in manufacturing industries.
Also in this category, some corporations have managed contacts with suppliers and distributors using packaged applications for the management of customer relationships (Customer Relationship Management, CRM) although these applications were not originally designed for that purpose.
In recent years, a new category of software has emerged that specifically focuses on supply chain management (SCM).
SCM applications, from vendors such as i2 or Manugistics, complement ERP and CRM systems by providing packaged transaction-based functionality for materials management, demand planning, and production planning services.
ERP and SCM applications have reached a point of maturity where their features are quite rich, in addition to being robust in general, and well understood in terms of best practices.
Still, many of them are devoid of analytical capabilities (with the exception of a few reports) that can give industry and purchasing specialists the manufacturing and value chain information they require.
The analytical applications packaged for the intelligence of the supply chain (Supply Chain Intelligence, SCI), make up a new category of business software that promises to provide information on strategic aspects for corporations.
SCI applications allow decision-making through the collection of detailed information from various stages of the product life cycle. SCI provides business intelligence, the element of business intelligence that ERP and CRM systems lacked.
SCI analytical applications collect highly detailed information from the entire value chain. SCI takes a broad perspective view of the entire value chain, using atomic-level data, which is required to understand the total cost and quality ramifications in the long term.
Supply Chain Intelligence (SCI) complements to Supply Chain Management (SCM).
The applications packaged for SCM have a long focus on managing the procurement and production relationships in the value chain. SCI applications, on the other hand, provide an overview of the entire value chain that reveals the life cycle of a component or a product.
| Supply Chain Management
(SCM) |
Supply Chain Intelligence
(SCI) |
| Administration of purchasing and production relationships at points in the value chain. | Provides an overview of the value chain as a whole revealing product life cycles. |
| Transactional. | Analytical. |
| Tactical decisions. | Strategic decision making. |
| Helps reduce costs through improved operational efficiency. | It reveals opportunities for cost reductions, but it also simulates revenue growth. |
| Usually it only has data from the application itself. | Integrate product, industry and vendor data. |
| Registers a state of the data, representing the "now". | Keep a historical record. |
| Assists in materials and production planning. | Predictions of the type What If (what if…) based on historical data. |
| Quantify the cost of some materials. | Enables understanding of total cost. |
| Simple inquiries. | Collaborative environment, with personalized monitoring of metrics. |
An SCI software must meet certain basic requirements:
Packaged analytical application. The functionalities described for an ICS must be integrated within a single environment of an analytical application software package.
Professional services. Each company has a unique and unrepeatable collection of business entities, so the data model that represents the analytical application must be customized for each organization, and that is where the professionals come into play.
Dexterity in mastery. The primary value proposition of any analytical application for SCI is proficiency in the domain it encapsulates. Anyone evaluating an SCI product should first consider this point.
Design versus Buy. For the classic decision, the advantages and disadvantages of both options must always be considered. Reduction in implementation time and cost benefits (to buy) versus benefits derived from customizing the software to the company's requirements (to design). Therefore, the factor that most influences must be sought.
Conclusions
In short, the intelligence of the supply chain allows organizations to reduce costs, improve the quality of their products, have a global view of said chain and other secondary factors that achieve as a consequence establish a source of competitive advantage and also growth significant in the performance of the company.
