Management Do’s and Do Not’s to Support Supply Chain Analytics: Part II

Editor’s Note: Dr. Tan Miller is Director of the Global Supply Chain Management Program At Rider University, College of Business Administration. This is the second of a two-part series.

One critical and “often overlooked” factor that significantly affects the quality and productivity of a firm’s supply chain analytics and decision support systems is the organization’s “level of access” to corporate data warehouses. Simply stated, the SCA/DSS expert employees of a supply chain group must have complete and unencumbered access to the firm’s data warehouses in order to assure their and their decision support systems maximum effectiveness.

On the surface, this may appear to be an innocuous and perhaps obvious statement. One might think – well of course, employees must have full access to the data. However, this is actually a rather controversial assertion in many firms, and prompts the question – why is this controversial?

The computer information systems or information technology (IT) departments of corporations understandably guard the data warehouses of the firm like the Holy Grail.

IT departments generally have responsibility for building and maintaining the corporate data warehouses which underpin all of the firm’s critical supply chain, financial reporting, human resources and all other operational and transactional systems. Given the importance of these corporate data warehouses to a firm’s daily and long-term functioning, the “protective” mentality of IT departments towards their data warehouses is both understandable and appropriate.

What is critical, however, is that the IT department works collaboratively with the supply chain department to maintain the optimal balance between protection of, and access to corporate data warehouses. Overly protectionist IT departments may limit their non-IT users to “canned” reports and “canned data flows” that prevent the sophisticated SCA/DSS supply chain user from fully exploiting the valuable insights hidden away in the raw data of the firm’s corporate data warehouses. Typically IT departments that adopt an overly protective or cautious approach to allowing users data access do this based on concerns that an inexperienced user may inadvertently launch an ill-formed data query which could slow, or worse “crash” corporate data warehouses and systems.

This is an important and valid concern of all responsible IT managers, however, it should not be used as an excuse for denying supply chain’s SCA/DSS employees the data access necessary to perform their jobs effectively.

Implications for the Supply Chain Manager

A supply chain manager must work closely with the IT organization to assure that his or her SCA/DSS experts have the necessary unencumbered access to all of the firm’s data warehouses. For purposes of this article, we will simply state that solutions do exist which facilitate full access to data warehouses for key SCA/DSS users, while at the same time providing the necessary safeguards to assure the integrity and functioning of the IT data warehouses.

To facilitate effective DSS support for supply chain operations, the senior management of supply chain must support its SCA/DSS users through collaborative negotiations with the IT organization to develop access to all necessary data at all times.

The Role of Third Parties in Supply Chain Analytics and Decision Support Systems

Third party firms offer an ever expanding set of consulting services in supply chain analytics and decision support systems. Their services are far too broad to enumerate here, but range from daily transportation and operations scheduling, to data mining based analytics, supply chain scorecards and benchmarking, and network and facilities simulation and optimization. Many third party firms possess exceptional expertise and excellent SCA/DSS capabilities, and this author has frequently utilized these services while in private industry, as well as worked for a third party provider of such services.

One management lesson learned from working with and as a third party SCA/DSS provider is that even for firms that rely heavily on third parties, it is important to retain some SCA/DSS in-house expertise. Said another way, there are risks and potential negative impacts to completely outsourcing a firm’s SCA/DSS activities to one or more third parties. Specifically, the value we described earlier from having “in-house” SAC/DSS expertise that knows the inner workings of the firm’s network “by heart” can be lost.

The organizational value and improvement in productivity that derives from having “in-house” colleagues employing SCA/DSS skill sets to improve operations on a daily basis can be lost. Thus, the management prescription is that the supply chain organization must find the right balance between using third parties to support SCA/DSS activities, as well as internal expertise. One hundred percent reliance on third parties is suboptimal, and similarly, one hundred percent reliance on in-house expertise is suboptimal.

Closing Notes

Supply chain analytics and decision support systems represent an absolute necessity for supply chain organizations. It is no longer possible for managers to operate a competitive efficient and effective supply chain without strong decision support. As reviewed in this article, from a management perspective, key learnings and recommendations regarding how to support SCA/DSS activities include:

1. Have at the minimum several SCA/DSS experts imbedded in the operations of the supply chain,
2. Assure open, unencumbered access to corporate data warehouses for your SAC/DSS employees
3. Find the right balance between your use of third party and in-house experts

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