Supply Chains: The Next Generation

It's crystal ball time. Here's a look at what the analysts, practitioners and solution providers are predicting for the supply chain in the years ahead, as well as their advice for building your own next-generation supply chain.



Cleaning house implies cleaning your data. That doesn't mean you have to be operating at 100 percent efficiency, says Eric Black, director of consulting, e-procurement and visibility initiatives at DigiTerra, an enterprise application integrator. It means you have to make sure that whatever data or information you're opening up to your suppliers and customers is correct.


Planning for e-Business


Third, be ready for e-business. Cronin, from Ability, says this means more than merely having an Internet presence. It also means understanding how e-commerce fits your business. Newton adds that e-business means getting out of the mindset that all the information you have is proprietary to yourself. You have to realize that there are operational efficiencies to be had from sharing the information, he says.


Once you have a clear picture of how your company can benefit from going e,' you can begin to plan for transacting business over the Internet. Focus first on a limited number of processes that you want to automate, advises Eric Levin, vice president of marketing at online sourcing software provider Frictionless Commerce. While it's important to have everything tied together in the end, there are great gains to be had by breaking down major processes, understanding them and automating them, Levin says. Start with indirect procurement, strategic sourcing, supply chain collaboration and forecasting, or some other process, then identify software that will meet today's needs and also let you link to other processes further down the road. One advantage of this approach is that it helps you avoid falling into the trap of waiting for software that can solve all your problems in one fell swoop. A second benefit, says Joe Brucia, e-procurement practice leader at Technology Solutions Co. (TSC), an e-business consulting and systems integration firm, is that you can implement a smaller solution more quickly and therefore have a better chance of generating a quicker return on the investment.


The same strategy applies to your supply base. Pick a few key suppliers and start passing data to them, Newton says: It doesn't have to be full, lights-out, system-to-system communication. Just start passing data, exchanging sales forecasts or inventory positions or order-status information. Once a basic level of electronic connectivity is achieved, advises Jim Frome, executive vice president and chief strategy officer of SPS Commerce, the company needs to develop a roadmap for how to add increasingly complex transactions that foster more collaborative electronic relationships with all of its suppliers.


On the customer-facing side of your business, Michael Mohrman, global ERP/SCM executive at IBM Global Midmarket Business, recommends working with one or two customers that are indicative of the complexity of your business. This has to be done with a few companies that you know exceptionally well, Mohrman says, customers that will derive as much value out of the process as your own enterprise. In fact, Black, from DigiTerra, says it may make sense to start working with customers rather than suppliers because the former may more readily see the shared benefit. For example, suppliers might be unwilling to share how quickly they will be able to meet your demand, but a customer might be willing to share forecasts so you will be better able to meet that customer's demand.


So as Flum and the Budd Co. pick a supply chain model of the future - the Utopian model, the Federated model, or neither - their opportunity for success will be based on their commitment to the process and support from the right partners. Regardless, hooking yourself into a to-the-future time machine is exciting stuff. But take some Dramamine before you take off.


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Planning for Success


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