Company networks are developing, competition is hard and markets are changing rapidly. For companies, the situation offers possibilities as well as many threats. Previously, less was enough. If the company had a good product, production did not have such hard pressure to be more efficient than competitors´ production or vice versa. It was enough to focus on core competence.
Many years ago, the discussion started about how networks are competing against other networks. It’s still real and true. I’m yet to see a truly open and developing network with the right kind of open-book dialogue, efficient workflows and readiness for changing situations. Hopefully, it has been born somewhere. Usually, when we are speaking about the competition of networks we are really speaking only about products, production and logistical chains.
Art projects are much closer to real networking than the manufacturing business. Projects are projects without agreement on the next one and every person is focusing on their own best knowledge. It seems that nobody is just making hours.
If we really want to compare networks, we have to see the whole picture, not only parts of it. Production, products and logistics have of course a big role, but the effectiveness of information sharing and managing also have a remarkable role in the logistical chain. Many networks have developed direct information chains and some companies even give rights to subcontractors to sign into the ERP or PDM to find the information needed. But that is not a safe way and not even an efficient way to manage the information. If the volumes are high, EDI-contacts and direct connections between ERPs are good.
If companies are working with projects like European companies usually are, volumes per item are not very high and changes are common during the project as the product is developing. New kind of information sharing is needed. Technically it is not a difficult problem. Mostly, we are speaking about ways of working, how individual employees are doing their job and what kind of tools they have for it.
We have found some rules during the implementation of Supplier Web – as we call and use the Jakamo system in our company with our network:
- Sourcing is much more than ordering goods. Usually, in a complex and multilevel network, ordering takes only some hours of purchaser’s working day and time is mostly spent on managing information. Benefits should be counted in many companies, not always the costs of direct ordering.
- Actions should be done only once in the network. Optimization of workflow should always be analysed by the whole network, not only company to company. Costs and claims should be analysed not only in one company but also in the whole logistical chain and network.
- Rules on information sharing have to be clear. There are many ways to share depending on the employee’s age and background. During 2020 there will be all: X, Y, Z and TV-generations working. The youngest and oldest people have totally different expectations about working and ways of information sharing.
- New software needs to replace at least one, preferably many, of old systems or lists, which are manually handled by. Especially in bigger companies, white-collar people have such a large software infrastructure to be updated that the need for a new tool has to be very clear before implementing.
- It is important to remember the usability of the software. Systems should help people. Unfortunately, it is often the opposite way.
- For employees, including me, it is hard to implement new ways of working even though we are all using new applications naturally in our personal life. Is hierarchical decision making the main problem for development in companies and between the companies?
In the end, earnings are the only things that count in business. There is no company or network, which would operate over a long period without clear benefit and revenue logic. Still, every move in the chain should be calculated as a network cost, not only for trying to invoice the next customer in the chain. The real development of the network is needed and there is a need for a place to share – and we have found it.
The blog post was presented originally in the Jakamo Official Blog on 12 September 2014.