Barriers hindering supply chains uptake

The move toward Internet-enabled supply chains is lagging in Australia due to an absence of key industries driving the change, according to Gartner.

Elsewhere in the world, Internet-enabled supply chains or collaborative commerce, is being enthusiastically adopted by many industries, with the IT manufacturing and automotive industries taking the lead.

Kristian Steenstrup, ERP and SCM research director for Gartner Pacific, said these industries are not big in Australia which is creating a general lag but take-up will be greater in the next 12 to 18 months.

"This will be due to more case studies about more relevant Australian business types, more sophistication within the ERP systems, better utilisations of the ERP systems in supply chains and an improvement in economic conditions," he said.

According to a recent survey by The Forrester Report, Network Supply Chains Emerge, 88 per cent of supply chain executives said they expect to use the Internet or extranet for supply chain management (SCM) by 2002.

Steenstrup said poor IT systems, a lack of understanding of implications and limited resources are hampering progress as many companies need to overcome "inertia" in adopting technology.

"Australian businesses are hesitant about jumping into technology until it has been proven, especially business systems; they want to see a demonstrable return on investment," he said.

"For IT departments wanting to encourage the move forward to collaborative commerce within their organisation they must work within their company's strategy, but align the IT strategy to the business one to gain visibility.

"They need to get into the spotlight of the business strategy and highlight the fact that collaboration is a revenue enhancer. Once collaborative supply chains are implemented, the company is agile and can react to consumer demand and capture market opportunities faster than their competitors."

IT managers also need to articulate their vision of integrated supply chains and offer an investment strategy that could lead to this.

Steenstrup suggests starting with the implementation of a computerised infrastructure, such as connectivity, and then decide whether a best of breed or optimal suite would suite their needs best.

"With best of breed, look for a software vendor with experience in their industry, as there is extreme variation between industries," he warned.

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