With today’s increased pace and volatility of business, access to timely, accurate operational information is more critical than ever before. As globalization and outsourcing have extended supply chains to every corner of the world, the sources of this information are increasingly located outside of the four walls of a single enterprise.
A 2013 Deloitte survey found that supply chain executives are far more concerned about the extended value chain — where they have less control — than about risks to company-owned operations. This is driving the rise of a new class of enterprise software, the business network, built from the ground up to solve problems that enterprise resource planning (ERP) systems were never meant to address. Instead, ERP systems were created to harmonize and manage business processes within the four walls of the enterprise. These systems were not, however, designed to manage complex, cross-enterprise interactions, as well as global supply chain risk and resiliency to unexpected changes in demand and/or supply that characterize the modern supply chain.
Introducing the supply chain center of excellence
In response, companies have realized that they need to develop skills outside of the confines of ERP and instead cultivate their own internal skills for supply chain leadership. In other words, many of today’s leading, global supply chain brands recognize that to create a long-term view to achieving supply chain excellence, organizations must take a strategic view beyond day-to-day issues. Dealing with the realities of the multi-level, cross-geography, and intra-enterprise supply chain model has been a challenge to many well-known brands. As companies reassess their strategies for collaboration, continuity of supply, and competitive advantage, the role of the supply chain “center of excellence” (CoE) becomes a key part of the organizational model.
The idea behind a CoE is to inject innovation into an organization’s culture through the cross-functional engagement of key stakeholders who actually know how the business works and where the real opportunities are hidden. A CoE initiative is usually commissioned by the executive team as a way to shake things up and begin to address problems holding the company back or causing it to lag behind its competitors. In short, forming a CoE is usually an acknowledgement that a company’s operational performance needs improvement.
