There are thousands of supply chain technology vendors in the market today, and many companies claim their system is the best-of-the-best.
How do you truly know which systems are the best, and what can you do to ensure the selected supply chain technology does not become a money pit for your organization?
The answers to these questions lie in understanding the top pitfalls to avoid when selecting systems and new technologies for use in your organization.
1. Software May Be Difficult to Modify and Own In-House
Modifications were once easy to implement and manage, but over time, many vendors have shifted to closed source applications, restricting the usage, distribution, and modification of the software.
In order to improve the upgradability of systems (and therefore customer retention), many software providers have moved away from invasively modifying code to a model of including standardized “hooks” and “events.” The quantity and placement of these hooks/events can vary significantly by vendor and application, so it is often difficult to determine how suitable they will be for customization until after deep analysis has been conducted.
Quantifying the total cost of ownership (TCO) of a suggested system modification can be difficult, because modifications come along with difficult-to-predict increased costs of testing, supporting, and upgrading.
2. A Delineation on a Time and Material Basis Is Problematic
In addition to predictable license/subscription fees, the TCO of supply chain technology is derived from the services costs associated with implementing, supporting, and upgrading the system.
Services related to designing, configuring, and testing the software are often completed on a time-and-material (billable) basis. Services related to fixing software defects are typically handled on a non-billable basis as a part of the maintenance and support agreement.
It may be suggested that some of the same individual(s) will be responsible for both billable and non-billable efforts. This unclear delineation can lead to additional overhead attempting to ensure that you are not being billed for effort that should have been non-billable per your contractual agreement.
3. Differences in Multi-Site Rollouts May Lead to Delays
Scalability is another area of potential weakness when selecting supply chain technology. Differences in building layout, Material Handling Equipment (MHE), and operational processes can lead to disparate design and configuration.
Those differences can lead to considerable additional work, unnecessary delays, and additional costs. When researching, selecting, or implementing new supply chain technology, stakeholders must ensure technology is compatible with systems across multiple sites and identify potential delays and risks before making a final selection, explains TechTarget.
4. Software Talking Points May Obscure Speed of Use Constraints
Software vendors are focused on meeting the needs of warehouses, and the complexity of today’s supply chain technologies may overshadow yet another pitfall.
Software talking points, such as ease of implementation and anytime/anywhere access through web-based user interfaces, may appear to have what a facility needs. However, the nature of web-based applications may result in slower processing capabilities compared to older technologies.
Therefore, Operations and IT decision-makers should not overlook older technologies for their lack of visual appeal. They may perform key functions faster than newer, more visually appealing systems.
When Selecting Supply Chain Technology, Exercise Caution, and Choose the Right Partner
Opportunities for failure line the pathway toward better, more efficient supply chain technology. A misstep can have disastrous consequences, increase total cost of ownership, and leave your company with permanent scars on brand value.
The key to maximizing your investment and reaping the benefits of new systems begins with selecting supply chain technology carefully and avoiding these pitfalls.