The Supply Chain of the 21st Century

There is great value in harnessing the power of supply chain ecosystems to drive growth and efficiency in a business. Applying ecosystem principles helps businesses create and master this "chain of chains" that envelops the multi-enterprise scope of the...


There is no right or wrong to the position a member takes. Certainly there will be consequences over time to lack of adoption, but usually adoption occurs even if it is not efficient in the case of the laggards. The interesting reality of an ecosystem environment is that due to the mutual dependency between the members, the ultimate distance, or advantage, between the industry leaders that drive the mandates and the main pack is surprisingly small. Usually, the industry leader has innovated to the point of slightly over-building a capability (more capability than it actually needs to optimize). The "main pack" usually adapts to just slightly less full optimization and equilibrium is struck. The outliers are the laggards.

To date, the technology and process innovations have not created sufficient simplicity to provide higher adoptions to the "spirit" of the initiatives. Adoption rates of laggards are significantly up from where they were 20 years ago. For the foreseeable future, laggards will likely continue to embrace basic compliance.

Case in Point: The Role of Data Synchronization in Driving Ecosystem Innovation

Regardless of the type of supply chain, data synchronization at a global level is a critical underpinning for maintaining an effective multi-enterprise ecosystem environment. Data synchronization is a process, based on standards, by which companies and their supply chain partners integrate, cleanse and synchronize the business information they use to effectively execute within the ecosystem.

Data synchronization consists of three components: internal data synchronization, external data synchronization and operational synchronization.

Internal data synchronization ensures that item and partner data is consistent throughout the organization across departments and databases. This is done inside the enterprise.

External data synchronization ensures trading partners compare separate versions of data to detect and resolve exceptions and to come to an agreement on what the "true" data should be in order to update systems accordingly. This is done in the multi-enterprise environment.

Once internal and external synchronization take place,

operational data synchronization involves agreeing on the method and timing needed to keep the data in sync on a day-to-day basis with trading partners — even as it changes. This is the multi-enterprise execution result of effective synchronization preparation.

Data synchronization is a foundational element to moving the multi-enterprise supply chain ecosystem beyond the base levels of core transaction and collaboration. While the transaction is the ultimate "life-blood of the ecosystem," data determines the "blood type." An ecosystem that effectively harmonizes internal, external and operational synchronization can achieve the multi-enterprise collaboration required to experience leaps in efficiency and effectiveness in the ecosystem. Multi-enterprise collaboration enables companies to increase their trust in each other and to move toward mutual extension and innovation approaches to the supply chain, including co-mingled processes, composite applications and shared systems of record.

The Value of the Ecosystem View

The ecosystem view is not new, but it is not prevalent. After all, why should companies care that much about recognizing their environment multi-enterprise supply chain ecosystem? There are several good reasons, applying just the value of data synchronization in a multi-enterprise ecosystem environment. For example, according to A.T. Kearney's "Data Synchronization Proof of Concept: Case Studies from Leading Manufacturers and Retailers," a retailer can reasonably achieve:

* A 3 to 5 percent reduction in out-of-stock conditions by increasing its visibility and operational synchronization between itself and its suppliers.

* As much as 30,000 hours of annual labor savings in dealing with shelf-tag and scan errors.

* A 5 to 10 percent reduction in time spent in sales and accounting dealing with invoice disputes.

Ecosystem-level Solutions

There are a number of companies offering various products for data synchronization. The multi-enterprise environment of today will require the business achieve new levels of adaptation and flexibility. These include:

* Adaptation to multiple community styles, standards and synchronization methods — Good examples today would be the aggregation of synchronization at a single vendor point with adaptation to UCCNet and EPC Global for both data registry and RFID.

* Adaptive integration to the back-office — Look for a vendor that can provide multi-source to multi-destination integration from back-office systems, secure data infrastructure and a dynamic supply chain community. This becomes a non-negotiable to achieve long-term value in the current complex environment.

  • Enhance Your Experience.

    When you register for SDCExec.com you stay connected to the pulse of the industry by signing up for topic-based e-newsletters and information. Registering also allows you to quickly comment on content and request more infomation.

Already have an account? Click here to Log in.

Enhance Your Experience.

When you register for SDCExec.com you stay connected to the pulse of the industry by signing up for topic-based e-newsletters and information. Registering also allows you to quickly comment on content and request more infomation.

OR

Complete the registration form.

Required
Required
Required
Required
Required
Required
Required
Required
Required
Required
Required