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Finding the right supply chain services provider, by JDA Software

Written byDavid Gai,(pictured below, right)Executive Vice President of Services atJDA Software In my two previous posts, I discussed the complex challe...

Freddie Pierce
|Jan 9|magazine20 min read

Written by David Gai, (pictured below, right) Executive Vice President of Services at JDA Software

In my two previous posts, I discussed the complex challenges facing today’s global supply chains. To help manage this complexity — which includes demand shifts, supply volatility, increasing competition and significant global risk exposure — nearly every business has created an internal supply chain management team.

These internal teams must not only understand the top-level strategy of the organization — and support it with a profitable, efficient end-to-end supply chain structure — but they also face a series of diverse, practical challenges that require specialized expertise.

For example, the team needs to include technical specialists who can make the best hardware and software choices. General business consultants are required to make sure that different functional teams are working together effectively. Training experts need to study and address user needs as employees adopt new tools and embrace new practices. Functional specialists in sourcing, transportation, inventory management and other key areas need to ensure that performance metrics reflect world-class supply chain results. And the list goes on.

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Today, the average company faces huge obstacles in assembling this kind of diverse team. Obviously the costs of recruiting efforts, full-time salaries, employee benefits and office space are significant for such a large and cross-functional team.

But, even if an organization has a huge human resources and facilities budget, it can be almost impossible to find and recruit the right blend of talent to optimize end-to-end supply chain performance. While a recent Wall Street Journal article described universities’ aggressive efforts to build relevant supply chain degree programs, in the meantime most companies are experiencing a severe supply chain “talent gap.”

According to a recent Gartner study, 69 percent of CEOs believe the shortage of available supply chain talent is approaching the level of a true crisis. A second Gartner study points to one likely reason for this crisis: the unique need of supply chain managers to have expertise in optimizing complex processes that span multiple functions and enterprises — combined with an affinity for problem solving and analysis.

While there may be a current shortage of qualified full-time job candidates, the good news is that — outside universities — supply chain management has emerged as a mature business discipline. Today, there are thousands of expert professionals who have years of hands-on experience managing supply chains that span many industries and every corner of the world.

With their unique combination of supply chain domain knowledge, cross-disciplinary experience and proven problem-solving skills, many of these experts have found employment as services consultants. By working as consultants, these specialized supply chain experts can help dozens of businesses realize game-changing performance improvements, instead of working for a single business. There is no doubt that their skills are in high demand.

For companies that recognize it has become impossible to create a comprehensive, fully qualified internal team, the only real question is, “How do we identify the best services partner to collaborate with us on supply chain excellence?”

Following are three guidelines for finding the right supply chain services provider to complement your internal resources.

1. There’s no substitute for real-world experience.

While many supply chain services providers claim to have deep experience, keep in mind that supply chain has grown exponentially in its use as a “buzzword” over the past decade. Many consulting firms might list supply chain expertise among their many capabilities — but few services providers can truly claim to have years of firsthand experience in solving real business problems for real customers.

Can your potential partner point to customer case studies and other real results of their work with other companies? Do they have multiple customer references and success stories in your industry? Don’t trust your critical supply chain initiatives to a partner that has only limited experience in tackling the highly complex business challenges that characterize supply chain management today. In today’s fast-moving global supply chain landscape, you can’t afford to waste time on a partner whose people and practices have not been proven in the real world yet. By talking to previous customers, you can increase your confidence in your partner’s ability to solve your own unique supply chain challenges.

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2. Complex problems demand specialized expertise. 

Supply chain problems come in all shapes and sizes — and solving them requires an incredibly broad range of expertise. To truly optimize supply chain performance, you need high-level general business expertise to look at broad issues such as your network design — but you also need technical help in addressing user-level issues such as slow processing times. You need logistics expertise to satisfy customers in the most expedient and profitable manner. Change management specialists can help ensure that new supply chain practices are woven into the culture of your organization.

While it would be virtually impossible to assemble all this specialized expertise — and more ­­— on your internal supply chain team, a truly qualified partner can offer this type of deep domain experience in a very cost-effective manner. Your partner should be able to access whatever experience you need, quickly and flexibly, from across its worldwide services organization, which may include consulting, education, cloud, hardware and support.

As issues emerge and are resolved, your services provider should offer a series of fluid resources that deliver the right expertise, at the exact right moment to keep your supply chain improvement efforts on track. While many consultants lead their customers toward years-long engagements, you should ensure that your partner knows the value of transferring ownership to your internal team as each discrete task is completed, creating real long-term value.

3. Expert supply chain management requires both art and science.  

There are definitely scientific, fact-based elements involved in achieving supply chain excellence. A proven services provider will bring with them a series of best practices, process templates and other tools that will help your organization make rapid progress. Because these practices are based on similar engagements with the world’s supply chain leaders, they have a proven ability to address common business issues, expediently and effectively.

But truly knowledgeable supply chain consultants are artists as well as scientists. They are experts at customizing both technology and business processes to address the special challenges that set your business apart from the rest of the world. When a performance variation occurs, they creatively look for the root cause, which may not be obvious at first glance. When employees resist a change that is truly in the best interests of your company, they know exactly how to “rally the troops” and get everyone moving in the same direction.

This kind of intuition and artistry distinguish a best-of-breed service provider from the rest of the pack. You need to recognize the difference in order to achieve the highest possible return on your supply chain investments.

Few decisions impact your ultimate supply chain results as much as the software solution you choose — but that decision is closely followed by the strategic, well-informed selection of a services provider to support the application of your new technology. If you look for proven customer results, specialized domain expertise, and the right mix of supply chain science and artistry, the right partner for your business is sure to emerge.