Why Your Supply Chain Legacy Systems are Like Cement Overshoes: 6 Steps to Modernize Them

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Posted Jul 26, 2017 9:00:00 AM by Greg Henry & filed under enterprise mobility solutions

Legacy systems are a tough nut to crack.

Especially in your supply chain, where system outages and downtimes can disrupt your entire operation. That’s why many retail companies see their supply chains running smoothly – or smoothly enough – and decide to postpone modernization. In their eyes, the advantages to be gained from newer, more efficient systems might be worth the investment, but they’re not worth the hassle or the risk.

For the extremely risk averse, they won’t ever be worth it… until they are.

And then, of course, it’s too late.

At that point, one of the following situations has occurred:

  • A failure of obsolete equipment that can’t easily be replaced
  • A failure of obsolete software that is no longer supported and requires expensive custom programming to fix
  • A business need to implement mission critical new systems or equipment that would give it a competitive advantage… but you can’t because they’re incompatible with legacy systems

Any of those sound familiar?

SupplyChain247 offers three tongue-in-cheek but illustrative questions to identify when you might need to upgrade your automated storage and retrieval systems (AS/RS):

  1. Has your “go to” source for finding critical AS/RS parts become a search on eBay or Craigslist?
  2. Is the person responsible for servicing your AS/RS a long-time member of AARP?
  3. Is your AS/RS a better candidate for the History Channel’s “American Restoration” than it would be for a material handling technology video on YouTube?

You don’t want the problems listed above to become your problems. But how do you escape the clutches of your legacy supply chain systems? How can you kick off those “cement overshoes” before they slow you down so much you can’t compete?

Here are six steps to modernize for companies dependent on legacy supply chain systems:

1.      “Rethink the process”

According to Digitalist Magazine, rethinking your process should be the first step of modernizing. Don’t do it just to implement new software or machinery. Engage your leadership – and your end-users – to think outside the box. Research best practices in your industry. How could a modern supply chain system revolutionize the way your company does business?

2.      Simplify

The worst thing you can do is replace your already complicated supply chain systems with even more complicated cloud-based systems. A new system should provide greater flexibility without compounding end-user frustrations. Implementing a series of unrelated cloud solutions without any real synergies or interoperability would defeat the purpose. You want to think big and think global… but at the same time, keep it as simple as possible. How can you streamline all the routine, everyday operations of your supply chain?  Find a way to simplify those processes, and you’ll have all the support you need for modernization – from both ends of the org chart.

3.      Deliver business value from the start

Identify parts of your supply chain that could move to the cloud easily, or with minimal integration. Find a few low-hanging “wins” to provide momentum and showcase the advantages of a cloud-based solution. Even if the bulk of your operations remain in legacy systems, transitioning more pieces to the cloud means less reliance on those legacy systems. As your people start to see the advantages of modernization, they’ll start clamoring for more. To advance this mindset, Supply Chain World recommends looking for interim projects that can deliver business value in as little as six to nine months.

4.      Run a cost-based analysis of your options

Let’s face it, legacy systems are expensive to operate and even more expensive to maintain. Moving to cloud-based architecture can free up significant chunks of your IT budget and labor – which could be put to more effective and innovative use. In addition, the efficiency gains of cloud-based systems will vary depending on the applications and processes involved, but almost invariably point to reduced costs and higher productivity. And then there are competitive factors to consider, too: if a new streamlined system could save your suppliers money, how would that effect your price negotiations?

5.      Expand your networks

One of the most important steps you can take towards modernization is to expand your internal networking capabilities. As your employees become used to interacting through cloud-based mediums – such as email, file sharing, online collaborations, virtual meeting spaces, and even business-related social media – their experiences can fuel a new round of innovation. Interconnectedness and interoperability become more meaningful and easier to accomplish once more robust networking is in place. Digitalist Magazine identifies “managing your entire workforce” and “engaging customers through multiple channels” as just two of the many advantages of expanding your business networks.

6.      Employ modern data mining and reporting tools

Another valuable “first step” towards supply chain modernization is to implement cloud-based reporting and decision-making software. These may require some integration work, but allowing your decision-makers to access business intelligence from anywhere at any time can offer huge benefits for your organization. From there, it’s also easy to see how real-time data and artificial intelligence solutions could take your business to the next level… providing more impetus to your journey from legacy systems to the cloud.

Bit by bit

As you can see, moving your supply chain to the cloud doesn’t have to mean mass disruptions or momentum-killing investments. You can start small and plot your route strategically. Or you can think big and go all in. Either way, DecisionPoint has the integrated solutions know-how, experience, and capacity to help you modernize your legacy supply chain systems. Contact us today and we’ll help you discover the best path to the cloud for your retail needs.

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