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Production Module – Subcontracting and Materials Issue
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Inventory Turnover As Indicator of Health of Inventory and Business
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Companies increasingly are becoming aware that their opportunity to having a competitive edge in business can come through supply chain. In the case of companies operating on global scale, supply chain strategies drive operational efficiencies and affect the bottom line. Unlike technology or other core areas affecting business, Supply chain is always in a dynamic mode. Project managers who head supply chain projects are often faced with lot of challenges and issues to over come all through the project. In this topic we air to discuss a few practical problems and road blocks faced in implementing and operations of Global supply chain projects.
Often projects are rolled out on global scale involving multiple countries and locations with all sites scheduled to go live around same timelines. The Project managers and sponsors would be located in one country and physically it becomes impossible for project managers to keep running to all locations and be available to concentrate on all sites. Yes project teams are formed at regional country level. However if the project planning, design and control lies with one office or a single person or a team, the rest of the project teams would become enablers and implementers resulting in the dilution of energy and focus. The core project team resources cannot spread themselves thin to attend to all sites and hence the biggest or the most important locations get attention while the others suffer due to lack of focus.
Supply chain projects involve technology implementation including infrastructure and software. They also involve multiple logistical modules involving transportation, international freight and warehousing etc.
Span of control over project implementation is very important in case of logistics projects involving multiple channels and external and internal agencies. Project managers at best can concentrate on rolling out the project in one country depending upon the number of sites and the logistical components involved.
If the project involves setting up a distribution center or warehouse, all the more reasons that the roll out should be limited to country level.
Adoption of right technology and implementation often faces roadblocks in implementing global supply chain projects. Projects roll out common processes to be followed across all countries and locations and involve use of technology to drive the processes.
Many issues concerning technology are faced in a project:
Most multi national companies find that their supply chain operations across the world are managed not on one application or a set of applications, but each location and country would have implemented either legacy systems or stand alone systems to manage individual local logistics activities. Once implemented, it becomes difficult to isolate such applications and shift them to one common platform without which common processes and standardization cannot be driven across locations.
Secondly any software solution would require to be customized to suit local site and country requirements. One solution does not fit all. While the solution may work in one country with bigger volumes and size of supply chain network and warehouses, the same software may not be suitable to be implemented in a small country with one location.
Cost of Technology Absorption then becomes an issue. When a project proposes to introduce a system across all countries in the supply chain network to bring about seamless integration and common processes, it fails to account for the cost of technology and capability of all countries and locations to absorb the cost. The costs of IT implementation are exorbitant. A bigger site and country may be able to pay for the IT cost but if the same cost is expected to be paid out of another country which has lesser volumes, it may not be able to absorb the cost, unless the global project management is able to absorb the costs into the project cost or get corporate management to absorb the cost and take it off from the user country’s budget.
Implementation of technology calls for the IT teams to travel to all locations, implement the setup. Train the people and stabilize the sites post Go Live. The cost of implementation can run high. Again all countries may not be able to bear the cost of such implementation.
Technology infrastructure availability is different amongst countries and within the country. Internet connectivity and bandwidth may not be the same cross all locations which can hinder implementation of an internet based technology application. Normally if the project is driven at a global level, the local infrastructure issues of many countries do not figure while considering the suitability of IT platform for implementation.
Supply chain projects involve multiple locations and cross functional departments and teams within the organization. Besides they also include multiple external agencies who manage the logistics.
Driving projects through various country managements requires enormous internal selling to be done. The projects also call for external selling with the service providers. Local country managements as well as the service provider country managements may or may not have the same interest and commitment to the project as much as the global project leadership would have. These are soft challenges faced by Project Managers, to be able to sell the idea and get commitment from all stake holders.
The availability of quality resources both internally and externally in all locations is critical to the implementation of the project and is often a challenge which can hold up implementations and training.
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