The greatest challenge for Australia’s supply chain companies lies in remaining competitive, according to industry expert Steve Bridges.
Bridges speaks from experience. His career at senior management level in distribution, manufacturing, and information technology spans 28 years, mostly with multinational corporations and specialises in project management of new ventures, business process re-engineering of existing operations, and computerising business support systems.
He says today’s suppliers are operating on ever diminishing margins. Revenues are tight and companies need to find ways other than sales margins to salvage their bottom line results.
“The obvious place to focus is on internal cost cutting, but without jeopardizing customer service levels,” says Bridges.
“Ironically, more and more customers are saying that an efficient, accurate, and reliable supplier is often more important than bartering for the cheapest price, simply because their own customer service level is compromised if stock is not available when their customer wants it.”
Fundamentally solution customers are seeking an information technology system that will provide tangible improvements in efficiency, accuracy, and reliability, without having to undergo mammoth staff retraining programs.
Most SME operations undergoing rapid growth do not have the luxury of staff with spare hours in the day, since they are flat out doing business.
Bridges says: “Usually management have only a vague idea of how processes can be improved - they don't know what they don't know - and are relying on their software to provide the answers. The other common request is for "a solution that will future proof them".
"The problem is that they normally have only a vague idea of their business operations direction beyond the next year or two, so mostly they are not really looking beyond rectifying current practices.”
As CEO of supply chain software solutions house, Mid Comp International, Bridges believes the days of boutique software solutions are rapidly ending.
He says these are usually hard wired to meet today's needs of a specific industry vertical and are often locked into a specific piece of hardware, operating system, database, and delivery mechanism.
“These extremely focused solutions have little hope of morphing to address any significant future business or technology shift without the customer being saddled with an expensive totally custom and 'orphan' installation,” he says.
According to Bridges, any future supply chain software solution worth its salt will provide enough application flexibility in the base offering to cater for any shift in business focus or expansion.
Diversification by the customer into other product lines or industry verticals will need to be configurable on the fly by the customer. It will be hardware, operating system, and database agnostic.
Both business dynamics and technology developments are moving too rapidly to do otherwise.