Kevin Parker: Current trends in supply chain management
By Kevin Parker, editorial director -- Manufacturing Business Technology, 9/1/2007 12:00:00 AM
The Sterling Commerce Customer Connection 2007 event was dedicated—at least unofficially—to the proposition that “you can't plan your way out of complexity.”
This change in supply chain emphasis from planning to execution is an industry-wide phenomenon and not particular to Sterling, an AT&T company, which released its Sterling Commerce Sales and Fulfillment Suite at the event.
The suite delivers the kind of “sitting on top of ERPs” visibility typically associated with advance planning systems, but couples that with sales and execution elements—distributed sales and order management, multi-channel fulfillment, and warehouse and transportation management.
It wasn't so many years ago that some were saying the power of in-memory models could be applied to optimize planning for every single SKU in a supply chain. Planning and scheduling are among the most classic of computing problems, and advanced planning is applied to benefit in many manufacturing industries.
But in its most radical form this approach to supply chain management was overtaken by events, literally. In other words, even given more frequent planning refreshes, the emphasis has shifted to enabling collaborative, flexible response to unanticipated events.
“In a demand-driven environment,” says Greg Aimi, a senior analyst with AMR Research, “you still do 30-, 60- and 90-day plans. You do more refreshes, but there can still be considerable latency in the system, even for the Dells of the world. Supply chains that stretch 12,000 miles present lead-time and material availability challenges.”
Bob Irwin, Sterling Commerce president and CEO, says groundwork for the selling and fulfillment solution began in 2003 with a meeting of the company's executive team.
As a pioneer in electronic data interchange (EDI) and secure file transfer technology, Sterling's management saw its core competencies as including, says Irwin, “handling complex transactions, disparate systems, and supply chain communications for retail, manufacturing, logistics, and distribution.”
From that “picture-drawing” effort sprang three key acquisitions of software providers Yantra, Nistevo, and Comergent to assemble and integrate, based on similar SOA-based infrastructure, a portfolio of supply chain applications.
“Of course,” says Irwin, “most typically, users start with one module and then add others over time based on their current needs.”
Ken Ramatour, a product director with Sterling Commerce, says that one place to start is order management because that becomes the orchestrator for the end-to-end process, “Supply chain innovation comes from having a strong decision engine configured to the users' business process, and from our ability to deal with volume, the life-blood of a retailer. Integration is important, but it's really the resulting visibility that enables innovation.”
A decade ago, few anticipated that manufacturers would soon outsource production globally, and that midsize companies would pursue optimized multi-plant production. Companies blithely proceeded to buy multiple ERP systems or implemented multiple instances of the same type ERP system in widely disparate ways. That's why solutions for visibility into the real-time state of the supply chain, acting as a bridge from sales to fulfillment, will be applied to this heterogeneous legacy environment.
