Survey confirms need for automation in domestic and international supply chains
By Staff -- Manufacturing Business Technology, 10/1/2006 6:00:00 AM
For the vast majority of manufacturers, global supply chains are only half as automated as domestic supply chains, with the largest manufacturers possessing the largest gaps in automation between domestic and international. The primary reasons for the disparity—noted in Boston-based AberdeenGroup's Global Supply Chain Benchmark Report—aren't all that surprising.
"In managing domestic supply chains," says Beth Enslow, senior VP of research for AberdeenGroup, "the issues are mostly related to transportation management and warehousing. Internationally, there are many more factors to consider, like third- and fourth-party logistics providers, customs brokers, and free-trade zones with unique documentation requirements."
Homegrown logistics and transportation management applications are no match for such complexity. "Underinvestment in advanced supply chain capabilities is causing real financial concern," Enslow reports. "Up to 90 percent of companies are unable to access the data they need to handle basic budgeting, planning, and cash management."
To take control, manufacturers are embracing global trade management platforms, and applications for inventory and shipment tracking, risk management, trade compliance, supplier collaboration, and supply chain costing. Several solutions offer collaborative portals that enable far-flung importers, exporters, and logistics suppliers to share documents and data.
For instance, GT Nexus calls itself the "world's only industry-backed, on-demand global logistics portal," with 40,000 users in 77 countries; while trade "content" is at the heart of Management Dynamics' logistics contract management, supply chain event management, and trade compliance solutions.
According to Nathan Pieri, VP of marketing for Management Dynamics, companies must first master the many steps of global trade; then look to streamline and automate end-to-end processes—from purchase order to payment—to compress cash-to-cash cycles. "That's where the real value lies," he says.
JPMorgan Chase Vastera emphasizes the link between the financial and physical supply chains. Says Bernie Hart, global product head, "Companies are looking for 'general contractors' that can connect all the people, processes, and information involved in global trade."
Major ERP and supply chain players—including Oracle and i2—have expanded their offerings in this space. Other vendors include Sockeye Solutions, Mitrix, and Descartes.
Enslow says best-of-breed solutions go beyond the infrastructure and software required to automate data sharing. "It's not just a matter of ensuring all the correct documentation is available," she says. "It's about having the tools to restructure manufacturing and distribution networks to reduce total landed costs, and synchronize supply and demand."
