Peeling the layers
By Rajat Bhargav on Feb 18, 2013
The intent of this blog is to discuss trends and economic or business data related to the value chain (planning & execution). The aim is to connect the dots between the latest buzz (& hype) and the fundamentals behind it. Am hoping to reach supply chain professionals who are not able to find the time or the energy to do this themselves.
I will attempt to translate the language that economists and the business trade uses into plain English.
The reader is aware that the subject area is quite broad - spanning the areas of consumer behavior, physical supply chain, management approaches, analysis methods and tools at the very least. For a clear discussion therefore, we need to have a simple framework to describe the aspect of the value chain that is in focus. I will use the following graphic for that purpose.
The preeminence of the customer / consumer at the top of the value chain has never been in doubt. A lot of the discussion of the globalization of the value chain has been on the physical supply chain. However, the intermediate layers that connect the customer with the physical supply chain is where we will have to spend time as well. Though we will examine the details in future posts, the layers in brief are the following
|Layer||Description||Trends in play|
|Customer Channels|| The market facing of companies. This has been the plane with the most radical tech-driven change. Think mobile and online commerce.
||The most far reaching is the burgeoning of constant and ubiquitous communications tech -- think mobile. Omni-channel is the war cry in retail. Offerings and products are being re-imagined and adapted to meet this reality. Demand sensing needs to accommodate social interactions.|
| Business Process
||The processes that a company devises to meet it market and manage its value chain have to look at market needs as well its physical, organizational and systemic constraints.||Rapid and iterative innovation has been driven not just by large incumbents, but also be agile start-ups that have been quicker to spot and exploit trends. Businesses are emphasizing process more than systems.|
| Applications and Data
||Though a large part of the data that an organization uses to run its business is created by its own internal applications, an ever increasing share of it from partners and other external sources||
The diverse sources, formats and ownership of the data & applications being used is coming of the way of responsiveness and agility. Businesses are keen on 'visibility'
| Logical Value Chain
||Tax, tariff and trade regulations create incentives and artificial constraints that shape the logical supply chain design.||The root cause is mostly external and sometimes organizational structure. In either case, process automation is central to the solutions being put in place.|
| Physical Value Chain
||This is where the rubber hits the road and where the supply of goods and services is created. Often dubbed the real-economy, this is certainly one area that we will discuss quite a bit.||The supply chains are adapting to cost and risk management. Energy and demography are in the center of a struggle to improve competitiveness (aka productivity). As value chains go they are getting longer (# of tiers) and broader (variety of activities that are outsourced) adding to complexity|
Lastly, and not just for the sake of legality, I have to remind you that the views expressed on this blog are entirely my own and do not necessarily reflect the views of Oracle.
Look forward to the open discourse that this online medium uniquely offers.