The need for a supply chain management system today

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Corporations of the world rely on supply chains when fulfilling their business and IT goals each year. Supply chain processes affect both the speed and efficient service delivery of a company. Speed and efficiency factors cost money, so it is very important to strike a balance between being highly efficient and adhering to cost reduction strategies. You can achieve this balance with an effective supply chain management system such as IBM Emptoris Supplier Lifecycle Management.

Supply chain management - cloudSupply chain management (SCM) is critical to a company’s procurement to production lifecycle; however, it is not highly publicized. With the advent of emerging technologies such as cloud computing, big data and more, the need for a SCM system is becoming more prominent. I believe that an efficient SCM system is crucial for almost all industries to run their businesses uninterruptedly, including the federal government.

Information about federal government spending on SCM-related projects can be viewed on the USA Spending dashboard (click on the timeline tab).

Why do we need supply chain management?

We have an increased reliance on suppliers. Procurement happens in each and every aspect of an organization, from business needs to IT needs. Everything needed in a corporation is tied to suppliers and there will be a long list of suppliers in no time. The need to manage supplier relations, information, contracts and more grows rapidly while the need to follow regulations persists.

Organizations need a SCM system such as IBM Emptoris Supplier Lifecycle Management to establish streamlined supply chain management processes in order to realize the very best value from their spending through supplier analysis of cost, risk and performance. They need a SCM system to realize a 360-degree visibility into their supplier ecosystem.

An effective SCM system helps accomplish the following:

• Managing contractual obligations to assure a continuous supply and avoid a service company’s delivery disruptions.
• Strengthening supplier relations for systematic synergy with suppliers and different lines of business.
• Enterprise spending management to assure procurement happens through the right suppliers and reduces costs.
• Managing risk and compliance to abide by organizational as well as industry specific regulations and compliances.
• Establishing a single comprehensive supplier view and deriving insightful procurement analytics.

Existing and potential suppliersProcurement was one of the most crucial processes that helped IBM’s business transformation during the 1990s, as explained in the Harvard Business School study “IBM’s Decade of Transformation: Turnaround to Growth”. According to this study, procurement was standardized and streamlined to succeed with the “One IBM” strategy, along with logistics and fulfillment processes.

IBM recognizes the importance of a supply chain management system for IT procurement processes. IBM acquired Emptoris, Inc in 2012, which is now our flagship platform for supply chain, category spend and contract management solutions. With IBM Emptoris Supplier Lifecycle Management, organizations can develop, qualify and maintain their supplier lists. These supplier lists can be categorized by the organization, business or functional category and profile, so they can identify high impact suppliers and optimize supplying capabilities. It provides the ability to identify supplier risks such as quality discrepancies, procurement interruptions and pricing fluctuations, which are all of equal importance. I encourage you to learn more about the platform and see how you can benefit from this comprehensive SCM solution.

What are some supply chain management regulations?

Some of the important regulations for SCM are from the Occupational Safety & Health Administration (OSHA) for enforcing worker safety and health regulations, as well as Sarbanes Oxley for enforcing infrastructure design, transaction integrity and reporting measures and Basel IIfor banking regulations as well as operational risks.

Where you can check it out

IBM is showcasing the combined capabilities of IBM Emptoris Supplier Lifecycle Management and IBM Watson cognitive capabilities at the IBM Federal Summit on June 11, 2014 in Washington, DC. Please register here and do not miss this unique opportunity to see IBM efforts in developing the next generation supply chain and procurement management system with Watson.

This system will utilize data from the US Department of Defense, civilian agencies, federal acquisition regulations and federal contract audit manuals. In this demo, you will see that you can engage and interact with the Watson and Emptoris system in natural language to obtain reliable, accurate and insightful results.

Let me know how I can help further your SCM solutions. Tell me what you think by commenting below or on Twitter @sperepa or @FederalSummit.

Watson Delivery Solution Architect

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