As a result, Ericsson has cut inventories in half and boosted supplier performance by 25 percent. Martha disagrees about the strict necessity of ERP for companies bent on supply-chain integration. He says the internet has made it possible to sidestep that investment, at least initially, by opening up new avenues to providers of decision support and electronic procurement software. On the other hand, supply-chain optimization software is essential to building relationships with suppliers and customers, he says. People Over Kilobytes Notwithstanding a wealth of technological solutions, the human factor is still the most important element in achieving the highest levels of supply-chain integration.
Software is readily available to manage every imaginable link in the supply chain.
Tenn. Mariotti says executives must break through the trust barrier to share proprietary information that once was jealously guarded, either by the company at large or its individual departments. Seventy to 80 percent of partnerships are marriages of convenience. But businesses must identify a core group of supply-chain partners who are privy to all relevant knowledge about goods and shipments. Often that will include a third party that has essentially taken over a client's logistics-management function, and can't be kept at arm's length if the relationship is to work. No extended supply chain can function without clear-cut performance measures that are shared by all partners, says Stanford University Professor Hau Lee.