BitLogistics - vision tag

Supply Chain Initiatives Require an Iterative Approach

Sat, 17 Nov 2007 10:35:00 GMT

In a world where things are getting smaller, why are big IT projects still getting approved?

Simple trust, simple truth

Thu, 11 Oct 2007 17:43:24 GMT

The key determinant is trust. Developing trust can only be done in stages and is established, over time, by starting with simple tasks.

This certainly goes against the prevailing opinion held by many of the supply chain software vendors. They hold that everybody should plug into a single planning engine or adopt a common process. Many of these exercises are very complex and so are hardly appropriate for building trust. They are also very expensive due to the implementation and configuration time scales. Is it any wonder that supply chain collaboration based on this approach has only involved a couple of first tier partners?

Also the premise that everybody can effectively plug into a single instance of an application is hampered by another misconception. Suppliers often work with a number of manufacturers, each having their own unique processes. It is unrealistic to assume that they can all use the same work flow. Also, suppliers would find it impossible to configure their process flows to each individual customer, as it would go against their need to consolidate operational processes in support of high volume throughput. The more customers they gained, the greater the problem becomes.

A more effective approach is to begin sharing the information that is readily available to trading partners via more traditional methods, such as phone and fax. If this information is made available through a more accessible mechanism such as the Web, it need not require lengthy integration exercises. By ensuring that clear benefits are accrued to the participants at an early stage, a strong basis for trust and information sharing is established.

Over time, companies will begin to align their processes to support increasing collaboration between themselves and their trading partners. This will eventually reach the point where interoperability becomes straightforward and this is when the collaborative community actually becomes an applications ‘platform’. On such a platform all manner of complimentary applications and services can be provided, each providing additional value and new opportunities.

The evolution of collaborative platforms such as described above, will resemble the emergence of the telephone networks. Interconnection generated an explosion in demand, but more importantly, provided a platform that now supports all manner of services beyond the imagination of the original designers. The extent of their ambition ran to expecting that ‘every town in America will have a telephone!’. Collaborative supply chain platforms should also be charged on a similar basis to phone bills, i.e. by a transactional or subscription based monthly fee.

An effective supply chain collaboration solution should therefore be available to all members of the community as a service via the web, rather than requiring the installation of dedicated servers with each trading partner. In essence, available through any phone or network socket.

So are such services available today? What might they look like?

Sustainable competitive advantage

Fri, 21 Sep 2007 12:58:33 GMT

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.