Global Logistics Visionary
Some of the more interesting thinkers in the Logistics arena are using the web to highlight significant trends. One of the best of these is crafted by Michael Stolarczyk, now residing back in the United States after spending several years building businesses in Europe (and elsewhere).
Take a look at http://blogonlog.blogspot.com/
SAP's New Business Model - Designed for an On-Demand world
The announcement last week by SAP of their new Business ByDesign solution is very significant and I thought I'd spend some time explaining why this will be important.
On-line order status history
VisibleLogistics keeps track of historical status updates
In my previous post, I showed the form for entering order status updates in VisibleLogistics. After you update the status, the order details page shows the new status:
Apart from the way that this is highlighted on the web page, perhaps, this is something you could also store in a simple spreadsheet that you might use to keep track of orders. The advantage of software like VisibleLogistics that uses a proper database, however, is that it is straightforward to do things like keep a complete history.
This is what you see when you select an order's status history tab: all of an order's status updates, which probably shows an order's progression through the supply chain, depending on what you and your business partners choose to enter.
This is the kind of thing that you do not usually need, but when you do it is invaluable to be able to check back and see what happened when.
Sustainable competitive advantage
Speed of connection and community member management will be critical requirements and the ability to resolve the differences in reference and identification, essential
If we accept that the central nervous system orchestrates and manages all of the necessary operations in the human body, we need a counterpart for a collaborative supply chain community. In order to do this what features would such a mechanism need?
In essence it would need to exhibit a high degree of ‘connectivity’, so that it could accept or transfer data from any point in the network. It should recognise that the network may extend from raw material through to final delivery, including the related service parts, return and repair cycles. The community administration mechanisms should be capable of accommodating any number of trading partners; at whatever tier level they may be participating.
It should support and monitor the activities and operations of any number of specific functional applications such as manufacturing, warehousing and transportation across the whole community. As such it needs to be ‘process agnostic’, as the purpose should be to support a variety of existing work flows, rather than enforce conformance to one.
It should also provide mechanisms to resolve differences in nomenclature and frame taxonomies, so as to enable the transparent identification of products and components as they pass across the network.
The assignment of access rights and related attributes for new community members should be a swift process, which does not interfere with existing operations. It should also support the development of many communities simultaneously, as well as the growth of sub-communities within existing ones.
Security should be comprehensive, but not ‘intrusive’, at all levels of the community operations. It should also be possible to introduce new applications either alongside, or as replacements for, any existing ones. Event management mechanisms should be embedded within the ‘infrastructure’ of the network and be capable of instantaneous reconfiguration from any point.
Finally, it would make sense to provide this collaborative ‘nervous system’ as a network service via the Internet, rather than as a single instance in one organisation. This is because trading partners usually participate in many communities rather than just one.
But what is it that will initiate the ‘collaboration’ between community members?
As previously stated, issues such as trust become paramount. Almost all companies will not allow ad-hoc instructions or queries to impact their information systems. If they have spent considerable periods of time and money fine-tuning their IT infrastructure, a rogue instruction could have immense impact.
As a result, human intervention is necessary at many points where data is passed between corporate boundaries. The intolerance of EDI (electronic data interchange) transfers, only serve to illustrate how delicate information exchanges can be. However, with the advent of XML, the precision and control of data interchange improves dramatically.
Simple status update notifications
Keeping people informed with three clicks in VisibleLogistics
In my previous post, I described how VisibleLogistics lets you share share order details on the web. Putting information on-line where your business partners can see it is useful, but only the start. Instead of using web and e-mail separately, VisibleLogistics combines the two so you enter information once, and get notifications to keep people up-to-date as well as a web page to refer back to.
For example, suppose you just shipped an order. VisibleLogistics gives you a simple form to update an order's status.
All you have to do is select an update status option (one click), select a new status (two clicks) and then save changes (three clicks). VisibleLogistics then generates and sends an e-mail notification to the other parties on the order, just like the order created e-mail notification I described before. This e-mail notifies the buyer, for example, that the order has been shipped and provides a link to the web page that shows the order details.
Note that the status update form shown above lets you enter some additional text, e.g. ‘dispatched by mail’, that is included in the status update, in case you want to add more information than just choose a status. You can also choose a different date or time, in case ‘now’ is not when the order actually shipped.
Not only is this a very quick and easy way to record the order's status, compared to updating a spreadsheet, say, but you save more time because you do not have to e-mail your customer to tell them that their order has shipped. That would take a lot more than three clicks.
The collaborative nervous system
Any collaborative supply chain network needs a platform that can exhibit agility and adaptability in the face of constant change; in effect, it should resemble a human central nervous system
Many supply chain management solutions are still only focussed on a specific activity, such as improving the planning process, or highlighting unplanned 'events' or 'exceptions'. They are still usually deployed as 'point' solutions in specific instances; as such they require an implementation exercise. This in itself is fine, but it is not really acceptable as an effective solution in a dynamic, fast moving flexible world.
If we look at the parties involved in advanced manufacturing operations, they comprise designers, specialists in planning, procurement, manufacturing, supply chain management and customer service. All supported by a network of finance, technology and personnel resources. They probably work for different companies, all of whom have a relationship framed by the 'contract' on which they are engaged.
Because of the disconnect occurring between these parties in the extended enterprise, there are usually high levels of inventory resulting from a lack of clarity regarding order status. Sure, the information is held somewhere, but is it available to the community as a whole? Probably not, and if it were available, who should have the appropriate authority to see it? Also, if it becomes necessary to introduce a new party into the network, how quickly could they be admitted
All of these challenges need to be addressed before a truly collaborative supply chain community can be constructed. The community must also engender and support agility and be adaptable to any external changes or stimuli.
Do we have a model for an adaptable, agile entity such as this? Surprisingly enough we do, it is the homo sapiens or human. Human biology is a very complex mix of specialised organs engaged in manufacture and assembly, supported by highly complex transportation and delivery systems, all managed by a robust and distributed central control system.
Through evolution, we have refined our ability to react quickly to change, adapt to new situations and continue to build and develop communities. If a physical supply chain network could exhibit the same characteristics, it would indeed provide serious competitive advantage.
Order details on the web
VisibleLogistics lets you share order information on-line
In a previous post I described e-mail notifications in VisibleLogistics. While e-mail (or SMS) are good for publishing changes a visibility solution's core functionality is to publish the current situation. In this case, on a web page.
The link between the two, literally, is the URL in the e-mail notification, which links to the order details on the web. Once you are logged in as an order's buyer, carrier or seller, you can see the following, which is part of an order details page.
This is effectively the web page version of the e-mail, with additional information, such as the order lines.
Now this is no big deal - some information from a database on a web page, which is commonplace amongst teenagers who share details of their interests and social lives amongst friends using applications like Facebook. However, even this most basic web application functionality, in this case a simple web interface for creating and editing order information, is unavailable to small businesses who are sharing information with business partners via telephone, fax and e-mail - all of which require someone on the other end to respond with the latest information.
In VisibleLogistics, this is just the start - getting away from maintaining and e-mailing spreadsheets. The next step is to track order status updates…
Obliterated agility
ERP and Supply Chain Planning applications are inappropriate as a basis for community collaboration, as they require rigid adherence to specific internal process flows
In many companies the genesis of supply chain collaboration was the introduction of Enterprise Resource Planning or ERP systems. Assuming the organisation was wealthy and healthy enough to stand the pain of the implementation, it emerged with tightly coupled processes that spanned the enterprise. These synchronised operations linked various departments, so that the impact of actions in one area could immediately be seen in other, related areas. This aided decision-making, resource management and financial planning.
Unfortunately it also obliterated agility, as any deviations from the underlying process flows, required reconfiguration of the ERP system and this was not something to be done in haste. Nonetheless, successful implementations have delivered clear benefits, which is probably the only remaining incentive for those enterprises still trying to finish theirs.
Whilst this approach was useful in bringing together large corporations with several autonomous divisions or departments, it did little to enhance collaboration with external trading partners and suppliers. The need for collaboration became apparent as many organisations ‘restructured’, ‘downsized’ and ‘outsourced’ their operations through the late 1990’s. It was of little use to have efficient internal processes, if key operational processes were now ‘external’ and run by someone else.
Specific systems were also developed to support the activities of supply chain planning and optimisation. The theory being that sophisticated software could support the planners who had to balance the demands of the manufacturing operations, against the supply available from the sourcing teams. These activities also extended into areas such as transportation and inventory management. In many cases, extravagant claims were made regarding the potential savings that would result from the use of such systems. However, they all depended upon having clearly defined boundaries of implementation and complex, deep integration with any other related systems. This last factor increased the cost of implementation dramatically and as with ERP, severely limited agility and adaptability.
The constraints of these systems have been recognised for a couple of years now and as a result, a number of solutions have emerged to either enhance or compliment them. Most of these have been in the area of collaborative planning and manufacturing and have also begun to support the concept of the ‘extended enterprise’.
At this point, life begins to get very interesting.