Only 4 per cent of firms have an e-supply chain, and 62 per cent do
not see the acquisition of e-business technology by their
competitors as a threat, says a new survey
Earlier this year the Softworld Supply Chain showcase organisation
and InterBiz, Computer Associates' e-business applications
division, conduced a survey into web-enablement of supply chains.
Results were startling. While 64 per cent of companies profess
to have an e-business strategy, and 35 per cent claim to operate a
web-enabled supply chain, only 4 per cent actually have an e-supply
chain. A surprising 62 per cent did not see the acquisition of
e-business technology by their competitors as a threat.
The greatest restriction to optimising e-business operations was
lack of understanding, but nearly half the respondents are
assigning strategic e-business development and implementation
responsibilities to the IT department. Only 17 per cent of those
responsible for adopting e-business were board level executives.
That has to change.
Speaking at the Softworld event, Alan Waller, senior logistics
partner at PricewaterhouseCoopers, and visiting professor at
Cranfield Centre for Logistics and Transportation, says: 'The most
significant change driving the supply chain will continue to be
increasing pressures from the customer. Add complexities of
increasingly global supply chains, and the disruptive nature of IT
on traditional business models, and we begin to appreciate the
challenge of supply chain management from now on.'
Waller argues virtual supply chains will replace linear supply
chains and new skills, including making better use of systems and
internet technology, will be critical to business success. Getting
the manufacturing discipline connected is a key part of that.
Business velocity and customer pressure carry on increasing.
Real-time information delivers value to users everywhere in the
supply chain, and integrated systems maximise returns. In sum,
integrated supply chains deliver.
Richard Waller, InterBiz marketing manager, says: 'There's much
talking and thinking, but little doing. The goal is the connected
enterprise with everything connected together and an ability to
transact in real-time. There needs to be an understanding of the
industry, with no stock holding, and full knowledge of delivery
schedules. Companies need to plan collaboratively, and there should
be sharing up and down the supply chain for planning purposes.'
It used to be that everyone was spouting 'knowledge is power'.
That's now old hat. Today's mantra is 'shared knowledge is power'.
The current king in this emerging sector of the internet based
supply chain is Cisco Systems.
Dick Gillespie, Cisco's vp enterprise UK, says: 'The secret to
our success in the supply chain world is to turn the organisation
inside out and share information. Electronic data interchange, EDI,
automated paper processes, and there was an order-invoice
situation. With us now, suppliers look into our system and make
decisions on what they see. Sometimes there is no invoice or order.
That calls for a leap of faith for most organisations. It certainly
makes us agile.'
Philip Padfield, Ironside Technologies EMEA vp, says: 'We have a
telephone test we like to apply. If the e-commerce option is not
quicker than the telephone, don't touch it. Note the average
in-bound sales telephone call takes between three and five minutes,
after which the customer has all the information he/she needs. The
e-commerce system must equal or better that. E-commerce solutions
should incorporate ease of use, speed, security, scaleability, and
flexibility as essentials.'
Padfield lists the features companies should look for when
investing in an e-commerce system: it must be easy, fast, secure,
interface directly into the order management system, be scaleable
and flexible, change and customise in-house as the company grows -
and it must provide more information than a phone call.
IDC highlighted Ironside as a 'supplier worth watching' in the
internet commerce sell-side procurement applications space.
Certainly, from the time IDC prepared the report to earlier this
year, Ironside's customer base had jumped nearly 50 per cent (to
125).
Colin Tankard, Aventail's md, says: 'Many companies who want to
set up online supply chain management and create better integration
with legacy applications lack in-house resources. That's why we've
set up as an ESP - extranet service provider - to jump start
business-to-business deployment with a minimum of resources and
risk.'
Raking the market ground, it's possible to collect a few
examples of what's happening out there (Cisco, note, has to be the
leader - after all it's selling a lot of the kit the internet is
based on):
- Ford's global suppliers can have immediate online access to the
company's legacy based purchasing systems to receive orders via the
web. Ford is utilising OpenConnect's i-WARE solution to improve its
supply chain communication. The i-WARE three-phase strategy
includes browser based access to host applications,
rejuvenation/extension of these applications to trusted business
partners, and integration of multiple applications for new
e-commerce projects.
- Another OpenConnect customer is office automation company
Pitney Bowes, which uses an extranet built by Integra to not only
solve supply chain requirements, but also to add investment in
customer services.
- E-business solution provider i2 has acquired IBM's software for
planning, retail merchandising and replenishment, including Inforem
and Makoro for merchandise planning. It marks a key stage in the
i2, IBM and Ariba alliance for delivering end-to-end
business-to-business e-commerce and collaboration. Meanwhile i2 and
Siemens IT Service have an alliance to develop procurement
management services.
- Aventail's Tankard points to a user wanting to connect 800
supplier organisations and give varying levels of access to web,
groupware, cad, and mainframe applications, as well as to FTP and
database servers. It also wanted to utilise its Baan management
software. Aventail's extranet product included support for SecurID
authenitcation, tiered access control, traversing of any firewall,
and proxied traffic so there were no direct connections to
application servers.
- Paul Vogt, European product marketing manager, Zebra, points to
work done with courier specialist UPS in a system which tracks all
goods online, identifying packages that enter and leave an
organisation.
- Biomni (50/50 Computacentre/Computasoft joint venture) manages
Europe's largest e-trading community - supporting over 1,500 buyers
in the public and private sectors and 350-plus suppliers.
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Business of the future
'Convergence of globalisation and e-nabling technology will lead
to the emergence of new business models and networks,' says John
Boardman, chairman of Global Informatics 2000, an international
three-day conference set for Edinburgh this December. 'We'll bring
together those who'll exploit that technology and those who can
deliver it.'
Day one will concentrate on 'enabling the extended enterprise',
day two on 'managing multi-media', and day three on 'facing the
global future' - where there'll be sessions on 'web-enabled supply
chains', 'change management', and 'consequences on the mobile
web'.
The conference will seek to answer the question, 'what will the
typical business of 2010 look like?' Will there be a typical
business? Forget not the predictions of internet guru Henry Blodget
who proclaimed '75 per cent of cyberspace companies will be
bankrupt within five years - and 75 per cent will never make enough
to sell themselves'. Sobering stuff.
Dr James Bellini, first British member of US futurology
think-tank the Hudson Institute, speaking at a Software
AG-sponsored e-business forum last autumn, says: 'The successful
company of 2025 will have no headquarters, no chief executive
officer, own no IT, and have one-tenth the fixed assets it has
today.'
The winning business formula will comprise information as a key
strategic resource, a global data infrastructure, an integrated
knowledge chain to customers (who will design products), a drive
towards zero costs (inventory and supply chain costs reduced
through efficient data management) and intelligent service
(one-to-one marketing).
Dr Erwin Konigs, Software AG chairman and ceo, says: 'There's a
need to build totally-automated supply chains, with all-hours
availability, customers telling companies what they want, and days
and weeks hitherto consumed in trading wrenched down to
minutes.'