Make your supplier chain more visible

Supply Chain Visibility - the route to higher manufacturing efficiency by Scott Storey, Commercial Director, ediTRACK.

Supply Chain Visibility - the route to higher manufacturing efficiency by Scott Storey, Commercial Director, ediTRACK In today's manufacturing environment, supply chain visibility is rapidly becoming a big issue.

Indeed, according to new research*, the Supply Chain Process Management (SCPM) market, which exceeded $125 million in 2000, will more than quadruple over the next four years, growing at a Cumulative Average Growth Rate (CAGR) of just under 33 percent.

And, given the benefits of such solutions, this is no surprise, Because, according to Steve Banker, Director of Supply Chain Solutions at the US-based ARC Advisory Group (which provides strategic planning and technology assessment services to leading manufacturing companies, utilities, and global logistics providers) these benefits include the ability to reduce inventory, as well as the elimination of sources of order fulfillment variance, the automation of processes (with an attendant reduction in headcount), and the reduction of costly returns.

With such benefits, a growth rate of 33% might even be conservative.

After all, SCPM appears to offer the same kind of robust payback offered by Supply Chain Planning (SCP), a market which grew at about a 40 percent CAGR over the first six-to-seven years of its existence - when it offered a payback in less than one year for a high percentage of customers.

"If subsequent ROI research shows that the payback period is in fact similar to or better than SCP," says Banker, "then a growth rate of closer to 40 percent would be warranted." In practice, of course, actual market growth will depend heavily on the emergence of viable software solutions, precisely geared to delivering market requirements.

As yet, though, most solutions are adapted from ERP or SCM systems.

And, as such, are usually inherently unable to fully meet the needs of SCPM - i.e total visibility.

Why should this be the case? Well, the problem essentially lies with the design philosophy which underpins the traditional SCM solution.

Typically, these solutions are based on the use of a single point of contact - usually a person, or team of people - dedicated to tracking the progress of goods (or other service) by maintaining constant contact with all elements in the chain.

This can be both inefficient and unreliable, and usually restricts visibility to a small number of defined points.

While it is relatively easy to be aware of what's held at a particular point (a stocking centre, for example), it is a much more difficult task to stay abreast, at all times, of exactly what is happening in all parts of the chain.

Currently, there are very few SCM solutions which offer this, and those that do carry a very high ticket price.

But things are beginning to change.

Take, for example, our own product - ediTRACK.

Originally developed for SCM applications, ediTRACK is fundamentally different to conventional SCM solutions, because it is designed to disperse the process across the supply chain, using information which has been entered into the system at a number of critical points defined by the business process.

This fundamental design philosophy - the identification and analysis of business processes - provides the basis of a co-operative software application which allows everyone involved in the process to build a database which tracks how they work together.

This means information is then visible, in a secure environment, to all parties defined as relevant.

The result is a system which uses the latest Internet technology to integrate the functionality of Supply Chain Management, ERP, Groupware and Workflow, to provide a level of visibility of complex business processes which is unattainable through other system approaches.

And, because ediTRACK uses Internet standards, such as XML and SMTP, it can be easily and cost-effectively deployed on almost any system, anywhere.

In fact, ediTRACK is already proven in the retail sector, with companies such as Matalan, Homebase and Coats Viyella.

In fact, ASDA has used the product to achieve 97% availability of its pasta products - a range which is not only of key importance to the company, but which has a particularly complex supply chain - and it expects to achieve 98% very soon.

Of course, as with any system, ediTRACK is only as good as the data which is entered into it.

But as long as this is done efficiently, the benefits are massive - management decisions can be based on real-time snapshots of the process which takes into account all information relating to it, even across multiple databases and legacy applications.

ediTRACK lends itself naturally to SCPM applications.

And it is an approach which, ultimately, will drive the widescale adoption of SCPM solutions.

When it happens, the manufacturing sector will make enormous steps forward, through improved Supply Chain Visibility.

This will provide alerting, alert resolution logic, and extended supply chain visibility into inventory in motion (incoming raw materials and outbound finished goods), inventory at rest (inside a factory and inventory in Distribution Centers), and a real-time view of Key Performance Indicators (KPI).

The benefits are summarised by ARC's Steve Banker: "This type of solution improves customer satisfaction by helping companies to drive strong performance on the perfect order metric, which is an order delivered on time, in the quantities ordered, with no unauthorized substitutions, with the correct Value Added Services executed, and with the correct billing".

Back to top