Cost-effective IT the answer for supply chain firms

By: Jason Whittaker

The greatest challenge for Australia’s supply chain companies lies in remaining competitive, according to one industry expert. Steve Bridges, boss of

The greatest challenge for Australia’s supply chain companies lies in remaining competitive, according to one industry expert.

Steve Bridges, boss of technology provider Mid-Comp International and a veteran of the supply chain sector, says today’s suppliers are operating on ever diminishing margins.

Revenues are tight, he says, and companies need to find ways other than sales margins to salvage their bottom line results.

"The obvious place to focus is on internal cost cutting, but without jeopardising customer service levels," he says.

"Ironically, more and more customers are saying that an efficient, accurate, and reliable supplier is often more important than bartering for the cheapest price, simply because their own customer service level is compromised if stock is not available when their customer wants it."

Customers are seeking an information technology system that will provide tangible improvements in efficiency, accuracy, and reliability, according to Bridges, without having to undergo mammoth staff retraining programs.

Most SME operations undergoing rapid growth do not have the luxury of staff with spare hours in the day, he says.

"Usually management have only a vague idea of how processes can be improved — they don't know what they don't know — and are relying on their software to provide the answers," he says.

"The other common request is for a solution that will future proof them. The problem is that they normally have only a vague idea of their business operations direction beyond the next year or two, so mostly they are not really looking beyond rectifying current practices."

Bridges believes the days of boutique software solutions are rapidly ending. He says these are usually hard wired to meet today's needs of a specific industry vertical and are often locked into a specific piece of hardware, operating system, database, and delivery mechanism.

"These extremely focused solutions have little hope of morphing to address any significant future business or technology shift without the customer being saddled with an expensive totally custom and 'orphan' installation," he says.

According to Bridges any future supply chain software solution worth its salt will provide enough application flexibility in the base offering to cater for any shift in business focus or expansion.

Diversification by the customer into other product lines or industry verticals will need to be configurable 'on the fly' by the customer. He says it will be hardware, operating system, and database agnostic.

Both business dynamics and technology developments are moving too rapidly to do otherwise, according to Bridges.

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