The Ripple Effect: How One Error Can Destroy a Supply Chain

supply chain

At one time, companies had to rely solely on their employees to enter and manage data. The employees were responsible for managing the supply chain. At the time, this worked because businesses operated on a much smaller scale than they do today. Now, businesses handle hundreds, if not thousands, of orders a day, with many of those orders being shipped overseas. If companies rely on employees to enter and manage the data, they could end up with serious errors. These errors could create a ripple effect and end up hurting large amounts of data.

This is especially problematic if the error occurs in the master data. For instance, if errors occur when entering new customers into the database, those errors could affect every piece of data for that customer. For example, if an employee entered the wrong payment terms in the master file, those payment terms would automatically attach to every invoice the customer received. The terms would also appear on purchase orders and contracts. If the company failed to catch the error, slow payments could hurt their bottom line. Then, if they tried to fix it later, they could end up with a dispute on their hands. This ripple effect could hurt them for years to come and could even damage their relationship with their customers, especially if they have to fight to change data that is on contracts and other forms.

Supply chain management systems that provide a seamless exchange of data can eliminate this problem. Additionally, software can handle mass uploads of data so employees do not have to enter the information manually. By the time the upload is finished, all of the master files will have complete and correct data so purchase orders, invoices, and everything else will be correct.

Companies that fail to automate the process can expect to have serious errors. They cannot count on their customers to report the errors so they will have to pay employees to spend more time double-checking their work. Even if more hours are dedicated to the act of double-checking work, the possibility of human error still exists. Because of that, more and more companies are turning to automated supply chain management systems. Integrated supply chain management systems eliminate stress and human error. That, in turn, helps companies make more money and it improves their relationships with their customers. That is very important if companies plan to stay in business for the long term.

Charlie Alsmiller

Throughout his career, Charlie Alsmiller has focused on customer problems in difficult industries such as Energy and Telecommunications. Prior to starting Appterra in 2005, Alsmiller was VP of Global Operations for Allegro Development, a leading provider of software for the energy sector. He has also served as president of OmniSpace Technologies, a leading SaaS provider that he founded in 1999. He spent over 10 years in the consulting world with Price Waterhouse and Deloitte Consulting, where he participated in a wide variety of projects for very high profile clients. Mr. Alsmiller holds a BBA from Baylor University in Management and Information Systems and a MBA from the University of Dallas in International Business. Specialties: Technology ventures, Enterprise Software, Contract Negotiation, International Operations, Private Equity, Product Management, Strategic Alliances, Software Implementation, Software Development

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