Supply Chain Projects Update

Part 3: Initiatives in heavy equipment manufacturing, biotech, the restaurant business, 3PLs and more

Tempe, AZ  March 6, 2002  With leading indicators showing that the U.S. economy is  and here you can insert the adverb of your choice: "hopefully," "maybe," "probably," "definitely"  on its way to recovery, it is no surprise that manufacturers and service companies are continuing to pursue projects to streamline their supply chains. This week iSourceOnline is bringing you briefs on initiatives underway in a variety of companies and industries.

Today's roundup highlights projects underway in the heavy equipment manufacturing and biotech industries (enterprise planning and asset lifecycle management), New York City's largest drug store chain (B2B integration), the restaurant business (purchasing and supply chain management) and the logistics field (supply chain execution).

·        Japanese heavy equipment maker Komatsu has implemented Baan's iBaan enterprise system within its manufacturing operation, linking about 5,000 users at nine sites in eight countries in an effort to centralize control of the company's global planning, procurement, manufacturing, sales, logistics and accounting systems. The hoped-for result? Improved flexibility and accelerated responses to the changing business environment.

The project at Komatsu, the world's number two manufacturer of construction equipment after Caterpillar, is the Japanese manufacturing industry's most comprehensive implementation of an enterprise system to date, according to Baan. The solution provider claims that its system has helped Komatsu to complete its global supply chain, allowing the company to access all data from each base in real time and helping to reduce inventory and lead-time.

"Since establishing a local overseas subsidiary in 1967, Komatsu has grown into a global operation with 28 construction and mining equipment plants worldwide," explained Kiyoto Abe, general manager of information technology department for the e-KOMATSU division at Komatsu. "With the intensifying global competition, Komatsu has actively constructed a global supply chain based on the iBaan enterprise system that addresses the challenges of cross-sourcing  where products are efficiently exchanged among the various production bases  and [that] enables more timely and accurate adjustments to drastic changes in the business environment."

Previously, technology consultancy Aberdeen Group had cited Komatsu's implementation of the iBaan B2B Server solution in its "Best Practices in e-Procurement" report, in the direct procurement category.

·        Genzyme Corp., a biotechnology and health care products company, has tapped an asset lifecycle management (ALM) solution from Datastream Systems to manage manufacturing, utility and support equipment and to ensure compliance with the Food and Drug Administration's electronic record keeping and electronic signature regulations.

Genzyme will use the Datastream 7i solution with the goal of reducing operating costs and improving operational efficiency, as well as to assist in complying with the FDA's 21 CFR 11 regulations. Initially, Genzyme will implement the Datastream 7i software at two U.S.-based locations, along with its new facility in Waterford, Ireland. Genzyme will use the software to manage thousands of pieces of equipment, ranging from research tools and instruments to manufacturing equipment.

Datastream 7i offers the ability to transfer and track assets across facilities, gain a greater understanding of how resources are deployed, cut maintenance costs between sites and gain a company-wide perspective of assets, according to the solution provider. Additionally, Datastream said its solution's Web architecture makes it a cost-effective enterprise solution since it can be deployed at a single location and utilized at all facilities across an enterprise.

"We selected Datastream because they were the only asset lifecycle management provider that could meet three critical needs: ensuring 21 CFR 11 compliancy, offering a Web-architected solution and meeting our implementation timelines," said Scott Morris, maintenance manager at Genzyme.

·        Duane Reade, the largest drug store chain in the New York City area, has implemented a B2B integration portal that is letting the company electronically exchange purchase orders, invoices, advance shipping notices and other acknowledgements with more than 200 of its suppliers. The company is using solution provider eB2B Commerce's Trade Gateway to connect with its small and midsize suppliers. Duane Reade has also used eB2B's professional services group to establish about 65 direct electronic date interchange (EDI) connections with larger suppliers.

Suppliers linked to the Trade Gateway can use Web-based forms or direct downloads to a computer system to exchange information with the drug store chain. The resulting transactions are received, translated and communicated to Duane Reade via EDI. The result, according to eB2B, is a reduction in manual effort and an increase in accuracy and efficiency, leading to lower costs.

"We are seeing immediate return on our investment by reducing our operating costs and improving our operational efficiency in a short period of time," said John Henry, Duane Reade's chief financial officer. "We are committed to delivering additional supply chain initiatives to help achieve our long term financial and customer service goals."

·        Restaurant chain Applebee's International is expanding its use of supply chain solutions from software company Instill. Applebee's has been using Instill's Procurement, Contract Management and Data & Analysis solutions for its corporate stores since October 2000 and is now looking to include all of its franchisee's into Instill's Data & Analysis system.

Instill currently tracks and analyzes direct goods purchases for 333 Applebee's units. Once Instill's system is fully rolled out, Applebee's expects to gain insight into purchases for up to 1,000 more units.

"With system-wide data available for the first time, we will be able to further drive down costs and improve quality for our franchisee population and our corporate stores," explained David Parsley, senior vice president of purchasing and distribution for Applebee's.

Applebee's has been implementing an aggressive expansion drive, opening more than 100 new restaurants per year for the last nine years. Accordingly, the company is actively developing a supply chain infrastructure to support and sustain this growth.

·        Third party logistics (3PL) provider Langham is set to deploy a supply chain execution system in a bid to gain a competitive edge in the $60 billion 3PL industry by increasing shipping and inventory accuracy to close to 100 percent, improving labor productivity and providing customers with more accurate information regarding their inventory and shipments. Langham is using Manhattan Associates' PkMS Pronto, a Windows-based supply chain execution system designed specifically for small- to medium-size companies. Langham is scheduled to go live with the system in its 306,000-square-foot, Indianapolis distribution center this month.

Over the last three years, Langham has experienced significant growth as they evolved from an air freight forwarder to a full service fulfillment provider, offering customers such as Quaker Oats Co., Firestone Industrial Products and Eli Lilly freight management; domestic and international surface, air and expedited transportation; warehousing; fulfillment; reverse logistics; and other distribution services. The increased supply chain demands that resulted from this growth prompted Langham to implement PkMS Pronto.

"As our customer base increased, we needed to upgrade our systems to maintain our high levels of service," said John Langham, vice president of Langham. "With PkMS Pronto, we will be able to maximize the use of space, labor, equipment and systems resources, as well as maximize customer service."

Manhattan Associates says that with PkMS Pronto's configurability, Langham can meet the unique requirements of its customers and serve as the customer's "own" distribution center. For example, using PkMS Pronto, Langham will be able to customize packing lists with customer logos. Further, customers can check the current status of orders and inventory balances in real-time using any Web browser.