Why Static Modeling Doesn’t Cut It in the Modern Supply Chain

Posted by Paul van Dongen on Mar 14, 2019 10:12:29 AM

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When you think of the supply chain, it’s easy to recall the antiquated notion of a literal chain of command and linear process. The chain begins at Point A, the order, and ends at Point B, the delivery of the product; what happens in between is as predictable and routine as goods flowing down an assembly track. When consumers were generally local and products typically unchanging, it was practical to invest in the same team of partners, routes, and practices.

The breakneck growth of the Internet has radically disrupted that paradigm. The continuous demand for newer, better offerings has shortened product lifecycles and upended the practice of stable partnerships. As dynamic networks are the new normal, technology has emerged to better form and manage these vital relationships.

Why Legacy Systems Fail at Dynamic Networking

Legacy systems use fixed logic, rules, and static modeling, which sufficed to support relatively stable partnerships. When they needed to connect with partners, businesses relied on ERP and WMS customization. Any necessary changes, which were infrequent, could be accommodated via proprietary adjustments. In a closed network, having to send an IT request and wait for updates isn’t a major setback. Today, this process is unacceptable.

Modern supply chain networks are “n-chain” networks, or variable, expanding entities.
Barely has a business customized to adapt to one network, when the need for another set of partnership arises. With legacy systems, adaptation is not a seamless endeavor. Each time, businesses must convey their needs to software vendors, who then update and test the system (which is itself expensive) only to have the tides of the fickle market turn again by the time the months’ long process is over.

dynamic-networking-supply-chainIt’s a cyclical problem in which businesses are constantly left with rigid, outdated parameters. Returning to the vendor with new requests, they are left again to wait and miss opportunities, unable to optimize frameworks until the clunky wheels of outdated machinery have been set into place.

Some businesses recognize the conundrum and seek quick fixes through middleware or integration applications that connect and translate between systems. While these typically address issues of connectivity, they don’t offer the visibility or optimization logic required for end-to-end management. Middleware can’t take into account special constraints and service needs or determine the lowest costs for various options.

Ultimately, legacy systems are incongruous to the modern multi-enterprise network demands. They were created for particular needs at a particular time; now that times have changed, their limitations are routinely exposed.

A Natively Designed Flexible System

MP Objects was founded on the realization of this shifting paradigm and a desire to address the newfound needs and landscape of the market. Its purpose was to challenge the legacy way of approaching the process and develop a better, more efficient system, one that aligns with the dynamic, n-chain network.

Since dynamic networks are constantly changing, businesses need an equally flexible and dynamic system that won’t limit them. The ideal system for the modern supply chain is one that would enable and easily facilitate an unlimited number of potential connections, allowing businesses to seamlessly choose the best option among them at any given moment, and regularly model their solutions after those selections.

MP Objects’ SaaS-based system allows companies, like LSPs and Shippers, to rapidly adapt in the ever-changing and growing n-chain network.

ecommerce-networkingWith the advent of the Internet and omnichannel ordering, the rules of planning and execution have shifted and become far more difficult. The MPO platform was designed to accommodate and streamline those functionalities with all their criteria and constraints. The system lets you define possibilities very easily by assessing the characteristics of the order, such as where it needs to go (locally or abroad, for instance) and the best way to route it through the multi-enterprise network. From there, businesses monitor their flows, get alerted to issues, and acquire the means to anticipate and respond to problems in real-time through corrective actions. The system further handles the financial aspects of these partnerships and transactions where many oversights and costly mistakes occur. It matches and validates customer and supplier invoicing to compare the expected and actual costs.

In addition to optimization, another benefit of such a digital solution is the possibility for improvement through intelligent analytics and reporting. This is also a vital asset in the modern supply chain world where the conditions, products, and partnerships are predisposed to change. Businesses can’t rely on singular proven methods in a landscape that is always evolving. They must always stay alert and attuned to variances and invest in tools that account for new variables, as the new norm is one of regular adaptation and remodeling.

 

Legacy systems weren’t designed to support global networks nor the incredible demands of the modern market. A variable, dynamic landscape will always daunt the fixed systems that try to tame it, which is why MPO designed its system for configurability – tailoring to an enterprise’s needs, knowing their needs will regularly change.

Using the legacy method is the technological equivalent of purchasing and then juggling between separate devices for every new need or function when a single device already exists that can handle it all. Consumers wouldn’t stand for it – so why do businesses?

 

 

Topics: Supply Chain Collaboration, Supply Chain Complexity, Supply Chain Execution, Multi-Enterprise Business Networks, Supply Chain Optimization, n-Chain, Digital Transformation, Supply Chain Management

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