Supply Chain Management Key Initiative Overview

G00173915

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Summary

This overview provides a high-level description of the Supply Chain Management Key Initiative. IT leaders should use this guide to establish an SCM strategy focused on enhancing the operational efficiency and effectiveness of their companies' supply chains.

Analysis

Supply chain management (SCM) is a business strategy that seeks to align supply with demand, so that the right product/service is delivered at the right place, at the right time, at the right cost.

This simple, overused statement hints at the places where SCM can be used to yield value to the business. Too many companies approach SCM or develop their SCM strategies "one module at a time," rather than building a holistic framework that captures all the areas where SCM can provide value. Companies that dominate their industries with superior supply chain performance nearly always adopt integrated business-planning strategies, founded on solid connections to direct business value, as anchors to their SCM strategies.

Consider These Factors to Determine Your Readiness

Before beginning an SCM initiative, consider the following potential obstacles and prepare strategies to overcome these hurdles:

  • First, consider how end-user organizations will best implement, deploy, optimize and use SCM technologies.

  • Then, determine how your enterprise will maximize the business value of SCM technology in uncertain economic times.

  • Consider how supply chain globalization will affect the technology strategies necessary to address increasing supply chain complexity, operational risk and supply chain sustainability.

  • Next, consider how the different markets are likely to evolve, and how your organization should select SCM applications and vendors, particularly as multienterprise collaboration and end-user ecosystems evolve to support innovative SCM processes.

Conduct Your SCM Project in Five Phases

Gartner recommends that IT leaders follow five major phases when considering SCM (these phases may vary, depending on your organization, the extent of your interest in SCM and your enterprise needs):

  • Strategize and Plan: Draft a charter to gain agreement on the mandate behind the project, in alignment with business goals, particularly in end-to-end processes from the customer to the supply chain. Establish resources, budget and governance systems.

  • Architect Solution: Define the architecture, technology and standards for the project. Model business requirements, and detail specifications for solution delivery. Recommend how to implement the project. Define process detail and performance metrics. Communicate the plan.

  • Select Solution: Set requirements and issue RFPs. Analyze market intelligence. Evaluate vendor options. Do not look only at ERP suite vendors; also consider best-of-breed SCM and Cool Vendors.

  • Deploy: Staff and manage the implementation. Coordinate solution deployment. Create the development and test environment, and run tests. Seek feedback from users.

  • Operate and Evolve: Operate and manage the implementation. Revise according to feedback, risks and changing business requirements. Measure performance. Monitor use and compliance. Define best practices for users. Refine governance processes. Monitor risks and analyze trends.

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© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartners research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

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