Moving to "Multi-company Process Management"

Septet of electronics companies pursue shared vision, common platform to address inter-enterprise process challenges

Septet of electronics companies pursue shared vision, common platform to address inter-enterprise process challenges

Redwood City, CA — June 25, 2003 — Seven of the world's leading electronics companies have come together to present their trading partners with a shared vision for addressing inter-enterprise process challenges by adopting a common platform to gain end-to-end synchronization over their buy- and sell-side forecast, order and inventory supply chain processes.

The companies — including Hitachi, IBM, LG Electronics, Matsushita Electric (Panasonic), Seagate, Solectron and Wistron — have detailed for their trading partners the importance of managing their inter-company processes, a strategic imperative they consider a necessity to reduce inventory costs, improve operational efficiency and speed time-to-market across their complex multi-tier supply chains.

Electronics companies increasingly rely on partners for design and manufacturing activities, and with this trend, combined with increased global sourcing, the requirement to effectively manage inter-company processes has emerged as a critical, executive-level issue.

The septet of electronics companies unveiled their common vision to address inter-company process challenges with "multi-company process management," an approach that leverages a common platform to gain end-to-end synchronization over their buy- and sell-side forecast, order and inventory supply chain processes. This approach can also be extended to additional inter-company process areas, such as product lifecycle management and quality management.

Key characteristics of the multi-company process management vision include:

  • support for the full range of inter-company process areas, spanning multiple companies across multiple tiers of the supply chain;

  • the enablement of a closed-loop, positive response process between companies, including exception management and resolution management;

  • a flexible integrated architecture — secure, based on open standards and globally available — enabling rapid deployment in response to dynamic changes

  • deployable by all trading partners, regardless of their size and technology capabilities, with a low entry cost and fast time-to-value for all companies involved in the end-to-end process.

The electronics companies believe that such multi-tier, inter-company process capabilities enable them to gain greater control over, and improve the responsiveness of, their extended supply chains while reducing operating costs and maximizing revenues.

Industry analyst firm Meta Group considers multi-company process management to be a key trend addressed by "process integration networks" — solutions that span inter-company process areas. Meta considers process integration networks to be the next evolutionary step in e-business.

"Business process integration networks are now emerging from behind the private exchange veil with superior low-cost and low-risk alternatives to in-sourcing business process integration," said Joanne Friedman, a vice president at Meta Group. "As these new offerings mature, they will provide enterprises with the ability to rapidly adapt and react to changing market conditions with little or no cost incurred."

Other industry analysts also see a trend emerging toward multi-company process management, described by a variety of terms, including B2B collaborative commerce solutions, Web services networks and Web services grids — all of which are characterized by enabling the management of multi-enterprise interactions within a value chain and making collaboration among multiple trading partners possible.

Realizing the Vision

The seven electronics companies have elected to work with solution provider E2open, which was launched three years ago to build and operate an open, industry platform with the goal of reducing the investment and time necessary to synchronize processes and integrate information across supply chains. To date, the seven have used E2open solutions to support more than 1,500 trading partners, executing an array of business processes, from buy-side procurement and supply chain planning to sell-side channel order management.

For example, Hitachi engaged with E2open on a supply chain project involving both buy- and sell-sides of the organization and touching almost 200 suppliers, with a goal of creating a single supply chain hub for all supplier and customer transactions, while IBM, in production with both buy- and sell-side projects with E2open, views the solution provider as a component of its on-demand supply chain strategy.

LG Electronics is in production using E2open with its monitor division, with deployment in its PC division to follow shortly. LGE is also using E2open for server-to-server connections with buy-side trading partners. In addition, Seagate has deployed E2open on both the buy- and sell-side, with a supply chain deployment spanning ten countries and more than160 suppliers and handling in excess of 66 million parts per day to achieve greater supply chain synchronization and product demand visibility.

Matsushita Electric is in production with three projects to improve customer responsiveness and satisfaction: Matsushita Electric Industrial of Japan, the parent of Panasonic, is live with a RosettaNet sell-side solution with customers; Panasonic Industrial Company (U.S.) is using E2open as a gateway to third-party logistics suppliers; and Panasonic Industrial Sales Taiwan is using E2open's Web services gateway platform to integrate with customers;

"At Panasonic, we are integrating our crucial business processes via E2open to speed responsiveness, assure the availability of supply and enable multi-tier supply chain synchronization for key customers," said Yasutomo Fukui, general manager of the Corporate Information Systems Planning Group at Matsushita Electric Industrial. "Today's competitive business environment requires us to be closer to our customers than ever before. E2open helps us to meet this challenge."

Solectron is in production with E2open collaboration applications and integration platform software, connecting 18 sites to more than 1,200 trading partners worldwide and managing more than 700,000 supply-chain transactions per month to provide a unified view into Solectron and increase customer satisfaction.

Finally, Wistron is using E2open as a B2B gateway to key OEM customers to help reduce the time necessary to fulfill customer demand. "At Wistron, our goal is to provide the best, most responsive design and manufacturing services for our customers," said Frachard Lung, Wistron CIO. "E2open has improved our ability to integrate our business processes with customers, helping us to more proactively respond to customer requests."