System Stand-In Can Make or Break Supply Chain Visibility

System stand-in is a term I use frequently when describing why a particular supply chain visibility software does something that might be done by a separate system. For example, why would a visibility software offer the ability for new purchase or sales orders to be created over the web when those are obviously not visibility activities at all? The answer is system stand-in: the ability for the visibility software to substitute when other software is not present in the supply chain partner’s IT landscape.

What is System Stand-In?

Imagine you need to take pictures while traveling. You have two options: bring a heavy but high quality camera, or user the convenient but low quality camera on your phone. System stand-in is the camera on your smartphone: it’s a function that could be sold as a point solution if you needed it at high quality or scale, but often comes bundled with another solution if you only need it to be “good enough”. System stand-in is common for supply chain visibility software. Every major vendor offers some scope of functions that are not meant for core visibility processes but rather to fill in for supply chain partners who lack their own point solution in a given function. Here are common system stand-in capabilities found in visibility software solutions:

  • Order creation, update, acceptance, and rejection
  • Shipment creation, update, and receipt
  • Item master management, including BOM explosion
  • Invoice creation
  • Inventory management (increment-decrement, declare, status-change, etc.)

In each of the cases above there are pure-play dedicated enterprise software solutions that a larger business would use, and where a visibility solution would plug in to exchange data. The system-stand-in capability is there only to cover situations where a supply chain participant does not have their own point solution and where the visibility software is heavily reliant on that process’s data.

System Stand-in Over Time

I think the example of a camera on your smartphone is a good parallel for what we can expect in the supply chain visibility software space. Software solutions tend to add features over time, I kind of unfortunate cope bloat that probably suffocates more products than it shields from competitive ravages. System stand-in seems to be growing more than its receding:

  1. ERP providers are offering visibility stand-in, where a business only gets a little bit of visibility extended off the edge of their ERP solution.
  2. Supply chain point solutions are extending their scope to offer system stand-in for their nearest neighbors. There are TMS systems that also do visibility, visibility that does order management, order management that does light transport planning, inventory optimization that extends towards order management, and so forth.
  3. Marketplaces and service providers offering supply chain functional stand-in, such as Amazon offering inventory and invoicing functionality, Haier offering inbound visibility and ordering to its resellers, Avaya offering transport visibility to its customers, and so forth.

What this means is that supply chain managers can expect more and more system overlap between targeted point solutions and their nearby business function neighbors. At times, it may even be difficult to discern what is system stand-in from what is the core process the software seeks to support.

Why Does System Stand-In Matter for Visibility Solutions?

System stand-in is important because it often becomes a major determiner of visibility solution success. Consider a supply chain visibility solution that tries to create a virtual inventory pool from which a retailer can make available-to-promise decisions behind the scenes in its web-shop. This solution is extremely dependent on the underlying inventory data coming from logistics providers (for inventory in transit) and warehouses or suppliers (for inventory at rest). Said another way: the solution is very vulnerable to a lack of good inventory data from other systems. The visibility software vendor community has mostly addressed this issue by adding features which allow a company that manages inventory at rest or in-transit to directly update inventory details in the visibility system when they lack their own. Without system stand-in, visibility solutions are overly dependent on the sophistication of supply chain partners, particularly their existing IT infrastructure.

Naturally, there are good reasons why larger business operations prefer to use their own point solutions. Point solutions for something like managing inventory at a warehouse provide much better overall results for that purpose when compared with visibility system stand-in. This means system stand-in is also important for a second reason: it becomes a major point of rollout negotiation. Imagine a retailer that purchases a visibility software solution and now asks its suppliers to create packing lists electronically for it. The supplier may lack their own system to do this, hence they need system stand-in from the visibility solution. Yet, they will likely resist being tasked with using the visibility system to create packing lists because this is at a minimum a change initiative (people tend to resist change out of all proportion to the burden it poses) but also because the visibility solution is naturally not centrally focused on making their job easier. This point is subtle but critical: system stand-in functions are by definition secondary for a visibility solution. Hence, they will never be as well polished or suited to the users as they would like them to be. In the example given above, the supplier is neither the one paying for the visibility software solution nor the core business need being solved. From the software vendor’s perspective, the supplier needs to be satisfied but not delighted.

The last reason why system stand-in is critical is that most supply chain visibility solutions create value through completeness of the visibility. Again using the example described above, the retailer gets an inventory turn lift from enabling available to promise in its web-cart. But that requires that all inventory be evaluated. If pools or segments of the retailer’s inventory are invisible, we can be sure they will never be sold via the e-commerce channel. Most visibility solutions operate this way: the difference between 100% and 90% correct visibility is huge in terms of process streamlining and trust in the visibility system’s reports or alerts.

All this leads to increasing the need to carefully evaluate system stand-in functionality when selecting or adjusting a visibility solution. Supply chain partners with weak IT landscapes cannot simply be skipped, because visibility solutions derive most of their value by their completeness. The visibility software vendor will not place their emphasis on system stand-in functions, and the software buyer also won’t have this as their primary business goal (otherwise they would go buy a point solution). Nonetheless it can cripple a solution rollout if it’s too unwieldy or if true technical or process gaps exist. This trifecta of trends leads system stand-in to be an important, if often under-emphasized, aspect of visibility software selection.

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