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Supply Chain Management for a Demand-Driven World
Supply chain has become the battleground for customer loyalty as companies respond to fast-changing demands and business conditions. New technologies enable deeper visibility and more precise control in supply chain management (SCM) for both B2B and B2C brands, and companies that adopt modern, cloud-based SCM systems are being rewarded with efficiency gains, higher productivity, and growing revenues and profits.
It’s no surprise that the C-suite is paying more attention to SCM and raising expectations for top- and bottom-line contributions from supply chain managers. Two long-term trends are contributing to this shift:
1. Massive disruption: Over the past decade, market disruptors used technology as a virtual battering ram—knocking down barriers to competition and obliterating traditional order-to-deliver business models. This started in the B2C sector and has spread to B2B. While the rate of change may vary across industries, it’s now clear that there’s nowhere to hide from the realities of digital disruption.
2. Changing expectations: Online companies such as Amazon and Deliveroo didn’t just reshape their industries; they also set off a revolution in B2B buyer expectations for:
These expectations require more agility and real-time processing than traditional SCM technology and practices can deliver.
all companies
Today’s Reality: Customers Dictate SCM Success
Businesses of all types and sizes—retail, wholesale, manufacturers, logistics service providers, distributors, B2C and B2B—are identifying huge opportunities, and equally significant risks, around capabilities that allow them to control and impact customer experience.
Few applications will play a bigger role in those efforts than SCM.3 However, legacy SCM systems were typically not built to meet modern requirements. They can be very good at performing activities for which they were prepared and optimized, but they simply don’t have the capabilities needed for today’s customer-centric supply chains.
The Limitations of Legacy SCM
Traditional, on-premises SCM employs a linear and fairly rigid approach to designing, sourcing, making, and delivering goods.
1. Seller/supplier control: Organizations built the products they believed customers would buy.
2. “Push” distribution: Products were distributed via channel partners for sale to consumers.
3. Single-channel purchasing: Customers typically purchased products through a single retail outlet or sales contact.
This paradigm no longer works as the marketplace has become connected. Today’s demand-driven and increasingly dynamic supply chains require capabilities that legacy SCM systems simply weren’t designed to deliver.
Where Legacy SCM Technology Fails
Fragility vs. agility: Agility is an incredibly valuable capability for today’s supply chains because fast adjustments mean less disruption and enhanced service. Traditional, on-premises SCM technology is often prone to displays of fragility instead: demanding interventions, modifications, and workarounds to keep functioning as customer and business requirements change.
Demand and fulfillment: Third-party systems and processes to support specific channels are common in legacy SCM systems, and this creates challenges around visibility, service consistency, and an understanding of the true cost to serve. In an omnichannel environment, firms need (and customers increasingly expect) a consistent and seamless experience across channels and device types—a major challenge for systems architected for a single-channel world.
Fulfillment complexity: Agile businesses use multiple fulfillment models to reduce inventory costs, cut order lead times, and avoid lost sales. Here, too, a legacy SCM system may offer native support for certain fulfillment methods/channels but will rely on third-party tools, customizations, or bespoke development to work with others.
Visibility gaps: Buyers expect order and transaction data at their fingertips. Some of this information may be available using a legacy SCM system, but some of it is likely to be inaccessible or inaccurate.
Time-to-market and/or customization bottlenecks: Same-day fulfillment and customized products can be powerful differentiators, yet they can also be high-risk activities when integration gaps or data quality issues in legacy SCM systems result in companies making promises their manufacturing and fulfillment systems can’t always keep.
Working Toward a Friction-Free Supply Chain
Oracle SCM Cloud users reported an average
Tomorrow’s Supply Chain, Today
Traditional, on-premises SCM is tied to entrenched approaches; it forces businesses into reactive and defensive postures; and it equates change with cost, complexity, and risk. Modern SCM, on the other hand, enables innovative, proactive, and continuously improving supply chain practices. The essential elements of a modern, cloud-based SCM system reflect and reinforce the concept of building tomorrow’s supply chain, today.
What Does a Modern Supply Chain Require?
The 6 Defining Traits of SCM Cloud Applications
Data Analytics and SCM: Getting from Insight to Action
The most successful organizations don’t just assess demand; they actually predict and anticipate what their customers want, as well as where demand will be greatest.
Armed with these predictive insights, a company can remove the element of chance from its innovation and commercialization, planning, manufacturing, logistics, and inventory-carrying decisions. It can also improve customer experience by enabling the same rapid fulfillment and delivery practices that define the very best consumer ecommerce brands today.
A modern, cloud-based SCM solution is built on three capabilities that ensure you can plan, implement, and respond to supply chain events in real time:
1. Orchestration: Supply chain decisions that drive coordinated changes across every system, every transaction, and every relevant trading partner.
2. Responsiveness: Sequential and batch planning is a recipe for waiting—and for waste. Cloud-based SCM, by managing the exceptions, uses a continuous monitoring and response model to execute decisions and implement changes virtually in real time.
3. Clarity: Cloud-base SCM integrates your planning and reporting data to present a single view of the truth. Decision-makers get the confidence that they’re always solving the right problems, at the right time and place.
SCM Cloud Essentials
Modern SCM uses three capabilities to ensure that data-driven insights can support fast and effective supply chain execution.
Embrace AI to Discover the Value in Big Data
“Analysis paralysis” is a risk for any company that taps into the massive stores of structured and unstructured data readily available today. AI (what Oracle refers to as “adaptive intelligence”) avoids this dilemma by assessing relevance and business value, and identifying correlations that might otherwise go unnoticed, rather than simply crunching numbers.
Consider one example of how AI informs supply chain action:
How Adaptive Intelligence Apps Link Insights to Action for SCM
AI learns and adapts based upon outcomes—i.e., how you adjust recommended actions and upon supplier/partner responses to recommended actions.
Oracle Data Cloud
- 5+ billion anonymous consumer/business profiles
- 45,000+ dimensions to group profiles
Organizational Data
- Supplier history
- Financial ratios
- Outstanding invoices
SCM Cloud Sharpens Your Competitive Edge
Any time a business considers a technology investment, one question takes center stage: Do the numbers make sense? According to research data from a number of sources, the answer across a wide range of potential business benefits is an unqualified “Yes.”
Supply Chain Excellence by the Numbers
Different organizations naturally have different priorities for how they improve supply chain performance and how those gains benefit the business as a whole. With a modern SCM solution like Oracle SCM Cloud, however, the benefits are clear whether your priority is operational efficiency, cost reduction, customer experience, or even revenue impact (1):
Companies that take a more strategic approach, creating an optimal manufacturing and distribution network (2):
Success with SCM Cloud: Examples from the Field
Individual customer examples provide another perspective on the benefits of solutions such as Oracle SCM Cloud. Supply chain excellence can appear in any number of ways—but ultimately, the numbers always tell the same story.
Winning Big with SCM Cloud: 4 Examples of Game-Changing Business Benefits
Grew vehicle utilization rates by an average of 5% to 10%
Increased speed of communicating proof of delivery by an average 10 hours per shipment
Achieved a 96% satisfaction rating for shipments received
Read the customer success storySaved US$1 million annually by cutting interbranch freight by 75%
Increased fleet utilization by increasing tons per delivery by 11.61%
Reduced fleet expenses as a percentage of sales by nearly
4 percentage points
Sped up order fulfillment by up to 3x, improving customer satisfaction
Achieved 99.6% order fulfillment accuracy
Cut order pick-up window to 2 hours
Read the customer success storyReduced transportation spend by 15%
Slashed transportation-related overhead costs by 20%
Cut transportation-related procurement spend by 10%
Read the customer success story
Oracle: Your Partner on the Path to SCM Success
All products that make up the Oracle SCM Cloud are delivered using secure and massively scalable Oracle-owned and operated cloud platforms. Each product is fully integrated and connected; each offers a modern, personalized user experience.
Oracle SCM Cloud provides the advanced reporting and analytics capabilities required to implement a modern, demand-driven supply chain. It also provides the end-to-end visibility and process orchestration that enable an agile, responsive, and efficient approach to SCM.
Cloud ensures your SCM applications are always up to date, delivering the platform necessary to adopt new innovations such as IoT, AI/ML, and blockchain. Do the research, run the numbers, and discover the true value of an investment in Oracle SCM Cloud.
Oracle SCM Cloud enables you to take control of complex, global supply chains. Gain the end-to-end visibility you need to implement a variety of integrated business processes:
Oracle SCM Cloud allows a supply chain team to get ahead of the process failures and bottlenecks that impact quality and undermine the customer experience, using capabilities such as:
Oracle SCM Cloud solves omnichannel complexity and puts your customers at the center of the network, making any stage of a customer journey a place where they can interact.
