Regain Control over Your Ecosystem

How business visibility is key to major savings


Visibility supports the orchestration of the next-generation supply chain by gathering data in the design, the supply and the demand chains. By combining information from all three areas, it not only provides a comprehensive status of what the ecosystem is up to, but allows understanding of how it performs and where improvements can be made. From that perspective it is a critical component required to develop an integrated and agile ecosystem capable of taking advantage of opportunities in the marketplace while reacting quickly to unexpected events.

Now that we have identified the three components of visibility — data collection, event management, and analysis and reporting — let's take a look at each of them separately and discuss what is required to address the needs described.

Information/Data Collection

To gain an understanding of what happens in a design, supply or demand chain it is critical to find and acquire the appropriate information. Information can be found within the enterprise, with the enterprise's partners or even in public sources. Being able to collect that information and present it in the appropriate way is critical for gaining the understanding for which we are looking.

A first source of information is the enterprise's back-end systems, in particular the enterprise resource planning (ERP) environment. Identifying the appropriate information items and making them available is an important task in developing business visibility. It requires gaining a clear understanding of what indicators the company is looking for, and what elements announce a problem or best describe a trend. The usage of standard reference models, such as the Supply Chain Operational Reference (SCOR) and its key performance indicators, can facilitate this task. In companies that run on a single ERP system identifying those elements is not too complex, but many larger companies have multiple, often independent ERP environments. They may even be from different vendors as the company grew through acquisitions or as IT decisions were left to the individual business units. In those cases it is of the utmost importance to create a standardized set of processes and vocabulary. Many companies actually start their route to business visibility by integrating their multiple ERP systems to coordinate the activities between business units, identifying waste and reducing costs in the process. In other words, in large enterprises business visibility may have to start in-house.

To complement the internal information, companies are collecting information from their supplier and distribution partners. This can be done in a variety of ways, from partners entering information using secure Web sites to automatic transfer of information between company systems, often referred to as business-to-business. Communication and message standards such as electronic data interchange (EDI), RosettaNet and ebXML, for example, facilitate the transfer of information between enterprises.

An important decision to make is whether the relationship between the partners limits itself to transfer of information, or whether the partners take advantage of the integration of their information systems to increase their collaboration. Does information or collaboration come first? This typically depends on the relationship between the companies and the degree of integration of their business processes. If a level of collaboration exists and it implies transactions are electronically exchanged between companies, the gathering of information for business visibility can easily be added. Once again, and we cannot repeat it enough, making sure both parties understand the information in a similar way by standardizing the processes and vocabulary is critical to ensure relevant information is received by the partners.

Over the last couple of years radio frequency identification (RFID) has become popular. The "Wal-Mart mandate" is surely an element driving that trend. Many companies have started experimenting with the technology and have experienced its capabilities and limitations. The latest technological improvements, referred to as "Gen 2" or generation two, will make the technology more reliable and easier to use across country boundaries, which is obviously critical for any multi-national or global supply chain.

In 2005, 58 million tags were used to track products through the supply chain. Unfortunately many companies limited the use of those tags to "slap and ship," where they put the tags onto their products as required by Wal-Mart and various other retailers but did not take advantage of the technology for their own use.

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