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Logistics technology

Point solutions: A roadblock to agility in supply chains

Leveraging point solutions tends to create fragmentation in people, process & technology alignment.

by Durga Pratiha | October 8, 2023 | 5 mins read

Leveraging point solutions tends to create fragmentation in people, process & technology alignment.

In the ever-evolving landscape of modern supply chains, the significance of agility cannot be overstated as a pivotal determinant of success. Swiftly adapting to market shifts, meeting customer demands, and overcoming unforeseen disruptions have been identified as the critical elements that can define a company's competitive prowess.  

That being said, the journey towards achieving genuine agility within supply chains is not devoid of obstacles. One of these is the fragmented flow of data that is caused by the prevalent use of point solutions to solve specific issues within supply chain operations. 

In this blog, we’ll be discussing why organizations initially turned to point solutions to solve logistics challenges like lack of visibility, tracking, etc., and how this decision has affected supply chain operations today. We will also walk you through what steps you can take to break down the data silos in your organization.  

Point solutions solved problems that legacy platforms were unable to  

Point solutions are specialized software or systems designed to address a particular business function or operational challenge. They are often developed to handle a specific task efficiently and effectively, without requiring extensive customization or integration with existing systems.  

In the past, many organizations relied solely on legacy platforms to manage their supply chain operations and were often faced with unique challenges that required specialized tools or technologies to solve. Point solutions provided a quick and focused approach to tackle these specific issues, without the complexity and cost associated with replacing their current platform or implementing large-scale enterprise-wide systems. 

Additionally, point solutions were often more accessible and easier to adopt compared to comprehensive enterprise solutions. They offered rapid deployment and a straightforward learning curve, making them attractive for organizations seeking quick fixes to specific pain points. 

However, today, organizations are realizing that relying on numerous disconnected point solutions to solve one problem has created multiple other challenges. Data silos, integration complexities, and lack of interoperability between different systems have become significant hurdles.  

There’s a downside to implementing point solutions 

The lack of alignment across people, processes, and technology within supply chains can create significant challenges and hinder overall efficiency.  

  • Impact on people alignment: There’s a lack of cross-functional visibility that can result in increased lead times, excess inventory, or stockouts. The disparity between multiple point solutions can affect communication and collaboration which in turn leads to misunderstandings and duplicate efforts. 
  • Impact on process alignment: Gaps in information and bottlenecks can cause delays in critical processes like order fulfillment and inventory management. To be efficient, supply chain organizations need streamlined, standard processes that ensure seamless flow of information between various stages. 
  • Impact on technology alignment: Using multiple, disconnected point solutions leads to redundant functionality and inefficient data management. Maintaining and updating these solutions can be complex, costly and increases the risk of system failures. In addition to this, adopting innovative technologies like AI, IoT, and blockchain can be more challenging. 
Break down data silos to enhance supply chain agility 

So far, we’ve talked about how the necessity for point solutions arose, and the challenges organizations are facing today due to the disparate nature of these solutions. In this section, we’ll cover the different steps you can take to break down data silos in your supply chain organizations.  

Step 1: Implement a centralized data platform that enables seamless data sharing and real-time visibility across the entire supply chain. This can be achieved through Enterprise Resource Planning (ERP), Source-to-Contract (S2C) software, and Supply Chain Management (SCM) software that merges data from various functions and makes it accessible to all stakeholders. 

Step 2: Foster a culture of collaboration and open communication among supply chain teams. Regular meetings, cross-functional workshops, and shared KPIs can enhance teamwork and understanding across contrasting functions. 

Step 3: Find opportunities for process standardization and automation to reduce manual interventions and streamline operations. Automated workflows can enhance efficiency, minimize errors, and enable faster decision-making. 

Step 4: Prioritize the adoption of technology solutions that offer interoperability, allowing different systems to communicate and exchange data seamlessly. 

Agility is the key to supply chain success 

The ability for supply chain organizations to swiftly respond to new situations like shifts in demand, lack of supply of raw materials, geopolitical restrictions, regulations, etc. Is essential for a business to be able to maintain a competitive edge. Point solutions, unfortunately, do more harm than good in achieving this. 

The lack of real-time visibility into the entire value chain due to siloed data makes it difficult for decision-makers to identify potential issues and respond to emerging opportunities promptly. Collaboration among different teams and stakeholders is also impeded, hindering innovation, increasing lead times, and disrupting processes. Organizations must take steps to unify their supply chain operations through data integration and embracing integrable supply chain solutions.