Growing uncertainty in global supply chains is challenging the ability of companies to correctly forecast supply and demand, says Colbeth. Some are functioning at levels of no better than 40- to 50-percent accuracy.
One step toward a solution, he suggests, is the concept of supply-chain management as a service. The trend is being driven by top executives, who have invested large amounts of money in improving supply-chain performance, only to fall short of their goals. They might do well to consider outsourcing the function, Colbeth says.
Such a move would not have been thinkable just a few years ago. It is being driven by the development of cloud-based software applications, whose number-one benefit is "rapid time to value," according to Colbeth. Another is the ability to solve multiple business problems through a single offering.
It's taking time for companies to adjust to the idea, but the cloud has already won wide acceptance in North America. Companies in Asia, fearing security leaks, still want their applications to be located on premises. Europe, says Colbeth, "is mixed."
Treating supply-chain management as a service helps to create a more demand-driven environment. It could also allow customers to adjust more quickly to the demands of end customers. Colbeth cites Amazon.com as a company that has focused squarely on the customer experience, with the aid of cloud technology.
In fact, Colbeth suggests that "customer experience chain" might be a more appropriate term than "supply chain," to describe how companies today are operating to meet the growing demands of their customer base.
