In a recent article, Oracle discussed how supply chain systems have evolved, and identified four ways that legacy supply chain systems are costing their users money.
Supply chain innovators have 60% better profit margins and 65% better earnings per share than their competitors. – Whitepaper, “Value Chain Innovation,” Manufacturing Executive Research Services
Legacy systems were designed from a supply-driven functional model, whereas new systems cover an end-to-end process that begins with the customer. “The focus has shifted to understanding what the customer wants and being agile enough to meet that demand quickly,” says Roddy Martin, Oracle vice president of product marketing for supply chain management.
In fact, lack of agility is the first legacy supply chain systems issue that results in higher costs for their users. Agile firms have excellent visibility into what their customers want, coupled with the ability to shift their operations to meet that demand.
Oracle identifies too little insight as the second supply chain system issue that results in higher costs. The key to having the right information at the right time to make important decisions is an integrated system that supports the end-to-end supply chain lifecycle. “When there’s not a single source of truth, the leaders can’t move quickly and with confidence,” Mr. Martin says.
Not being ready for new technologies is the third factor that ends up costing firms money. Soon, companies that use artificial intelligence (AI) and the internet of things (IoT) will operate more efficiently and at a lower cost than their competitors. But non-integrated, siloed legacy systems can’t leverage AI and IoT data. And more than data needs to be integrated; to save money, your end-to-end business processes must also be seamless. Today’s supply chain systems offer this seamless flow.
Fourth, preventing security risks is more expensive with the typical patchwork of legacy systems, wasting IT time and money that could be invested in evolving your firm for expanded success.
Read the full Oracle article to learn more.
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