During our induction into the IBM family, one of our new colleagues told an anecdote about a firm that outsourced its mobile application development. Managing the relationship of outsourced work with what is being developed in house is a challenge similar to what manufacturers face with their supply chains. While this is a topic the folks at IBM having been talking about for a while, it’s new to me.The implications however are both clear and profound.
Lessons from Supply Chain Masters
Consider the lessons that Toyota learned through its Lean efforts. Being Lean, and working in small batch sizes does not work unless suppliers are also able to react quickly, producing small batches of exactly the parts needed for the vehicles that were in demand. Liker’s book The Toyota Way recounts their work with Trim Masters where seats are ordered when a car begins its four hour trip down the assembly line. With Toyota’s help Trim Masters was able to produce the seats and deliver them just in time to meet up with the rest of the car a few hours later.
Or consider Walmart’s famous supply chain agility. While maintaining very low costs, Walmart is also able to react very quickly to changing market dynamics to rarely need to put items on clearance.
Applying Supply Chain Lessons to Software
Software companies that would decide to make a change and release it hours later are few and far between. However, we serve businesses that increasingly expect to be able to change plans often to exploit immediate or transient market opportunities. Speed of innovation is key.