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On November 28, 2023, Tom Moore, a distinguished contributor to Supply Chain Brief (SCB), delved into the common pitfalls leading to supply chain project failures. Moore echoes the concerns raised by Joe Peppard, a seasoned professor at University College Dublin, in an insightful article titled “Why do supply chain projects often fail?” published in the Wall Street Journal. The subtitle of Peppard’s piece poignantly captures the prevalent issue: “Too Often, Investments in Technology Fail to Achieve Promised Results.”
Peppard identifies four critical causes for these failures, each contributing to the challenges faced by businesses engaged in supply chain transformations. The “illusion of control” stems from hierarchical structures that may obscure decision-making processes during projects, leading to unexpected outcomes. “Conflicts of interest” emerge between the IT department’s focus on deadlines and budgets and the business units’ emphasis on long-term value creation, resulting in misaligned priorities.
Additionally, Peppard notes the “IT amnesia” syndrome, where successful project knowledge is often forgotten as team members move on to new endeavors, leading to challenges when updates or changes are required. Companies’ tendency to treat technology investments as expenses rather than assets also contributes to failures, as they miss opportunities to manage and maximize the value derived from these investments actively.
Expanding on Peppard’s insights, Moore highlights specific reasons for supply chain failures. The allure of the “safe option,” often justified by fitting with existing architecture, can hinder innovation. Overlooking smaller vendors, who may bring transformative solutions, and clinging to sunk costs instead of adapting further contribute to project setbacks.
Peppard proposes actions to address these challenges, urging companies to search for value rather than mere funding, own and manage digital systems as productive assets, eliminate conflicts of interest, restructure IT, and conduct regular result audits.
Moore draws essential lessons for the supply chain, emphasizing the value of “loss analysis” to optimize space and reduce costs. Bold decision-making, meticulous measurement and analysis, resisting undue IT influence, and fostering collaborative vendor engagement with hypercare are recommended practical steps.
In conclusion, Moore underlines the dynamic nature of supply chain software and warns that failure to adapt can be fatal. The article provides a comprehensive roadmap to safeguard supply chain projects from common pitfalls, offering practical insights to maximize their chances of success.