The Information Supply Chain: Data Integrity Rises in Stature

Abstract: Supply Chain Security must include an enhanced awareness of the amount and nature of data routinely transmitted between trading partners. Supply chain information flows are critical to the success of Lean Production and Just in Time methods at any point in the Integrated Supply Chain. The coordination and timing of data flows must be fine tuned to assure that the time, labor and capital invested in Enterprise Resource Planning (ERP) Systems, Manufacturing Requirements Planning (MRP II) Systems, and Customer Relationship Management (CRM) Systems are able to return the value that the firm has paid for. Furthermore, the availability of this operational data, intended for the benefit efficiency and expediency of the supply chain, must be controlled to limit access by those with purposes other than expediting trading processes.

We realize that security is everyone’s business since 9/11. The amount of data available within a company’s supply chain provides either an opportunity to exert tighter control, or a challenge to control access to important proprietary data. The Information Age has placed a great deal of data at the fingertips of companies, leaving them to sort through it, manage it and figure out the best way to use it to their competitive advantage. It is not always an easy task, particularly when the supply chain is producing the information on a regular basis, across the entire system. Every interaction, every transaction and every update that takes place within that supply chain generates data. This creates two key challenges. First, when left alone data remains exactly that – only data. Second, it is often difficult to access the right data when you need it the most. Third, the abundance of data makes securing the supply chain more and more difficult, without a special effort on the part of all participants. Effective information management can improve supply chain productivity in today’s competitive business environment, as well as provide a way to promote supply chain security. Data is knowledge and power, whether used for good or for ill purposes..

The Challenge: Data, Data Everywhere…

The challenge of “data oversupply” is not a new one. Many companies rely on a combination of batch and real-time data systems to run their operations. The uneven result is that while one area of the company may be up to speed on data retrieval and management, many others are restrained by antiquated systems that update hourly, daily or even weekly. The least responsive point of data collection, control, or dissemination dictates the overall responsiveness of a company’s data system, taken as a whole. To the extent that critical information needed in decision making is delayed, the system is fragmented. That system fragmentation leads to data fragmentation, which in turns keeps companies from accessing and managing their data in a competent manner. The challenge is particularly tough within the supply chain, where transaction information is captured and delivered from many different internal and external sources. (1) (2)

Find Your Company’s Weak Spots

There are certain areas of a company’s operations that are most susceptible to data mismanagement resulting from fragmentation of systems and information oversupply. One particularly troublesome link in the chain lies between a company’s order-entry systems and its suppliers’ systems. The issue of timeliness and appropriate timing of information updating carries over to the manufacturing side of the supply chain, which needs the most timely, accurate data possible to figure out just how much product must be made to satisfy customer orders. Forecasting becomes difficult and visibility becomes clouded if all systems aren’t working on the same timeframe. Batch processing simply doesn’t cut it here. Striking the needed balance between production and demand can be achieved by fine-tuning the data management across the entire supply chain. (3) (4)

Leveraging Information for Maximum Results

How should managers achieve the maximum results from their firm’s data? Consolidate company transactions in one place, rather than scattering them across the enterprise. By creating a single, easily accessible data source, companies are able to better ensure accuracy and validity of that information. The data can then be used in conjunction with related data (such as that of your suppliers and/or customers), thus generating a steady stream of good, reliable information that all the members of the supply chain use utilize to their advantage.

Replacing “data gaps” with accurately managed data, will not only help companies gain internal operational efficiencies, but will also advance their business partners’ processes? If someone in your organization takes orders and has a data entry assistant enter the data, then there is an opportunity to close a data gap in your process. The opportunity exists to consolidate business processes to ensure better data accuracy and usage. By transitioning from a combined batch-and-real-time mentality to a more consolidated data management approach in which transactions are processed and data generated in real-time, companies can reap significant savings in money and time. Recognizing and controlling data gaps allows a company to more effectively utilize their resources, but also provides the means to secure access to proprietary data. (5) (6)

References:

• (1) Needed: Suppliers who can collaborate throughout the supply chain, Supply Chain Management Review, January 13, 2003
• (2) How Are We Doing? A Survey of Supply Chain Progress – Supply Chain Management Review, November/December 2004
• (3) The Advantages of Partnering Well – Supply Chain Management Review, March 2004
• (4) Gaining Supply Chain Visibility – Supply Chain Management Review, November 2001
• (5) How to Become a Supply Chain Master – Supply Chain Management Review, September/October 2001

• (6) The Financial Advantages of the Lean Supply Chain – Supply Chain Management Review, March/April 2002