During the 1970’s and early 80’s many of us believed that supply chains would seamlessly communicate with each other via Electronic Data Interchange (EDI). Unfortunately, due to multiple standards, clunky translation software, expensive teams of technicians and the requirement for rooms full of super computers this eNirvana turned in to a debacle.
Large hubs demanded suppliers’ trade with them electronically, often forcing them to take archaic software that sat on a standalone PC. Periodically, the supplier would check the PC for new orders, print them out and manually rekey them in to their own computer systems.
This eNirvana (every buzz word back then remotely related to EDI started with an e) spurned a myriad of software and value added network suppliers who quickly got fat from their spoils. IT Directors professed the world of Supply Chain Management was now electronic and Financial Directors rejoiced at the resultant business benefits and cost savings.
Through the 1990’s things were still progressing well until one very well respected and high profile technology executive questioned the validity of Electronic Data Interchange (EDI). Why were there so many sub-standards, why were the costs prohibitive, why was it restricted to just one or two documents, why weren’t any suppliers integrating the messages and how come it took so long to go-live.
It came as no surprise to some of us though when this same respected individual proclaimed to have the answer. A software product and data set so ahead of its time that it made EDI look prehistoric. Call it middleware if you will, that threw caution to the wind and embraced a new phenomenon called XML.
The panacea of business to business (B2B) collaboration was we were led to believe now called XML and that it would solve all of the drawbacks associated with EDI.
The bandwagon was rolling and many jumped starry eyed on to the shirt tails of our new saviour, who many likened to Obi-Wan Kenobi. The more cynical (or should that be sane) individuals and companies saw fundamental flaws in this new approach. Flaws that explain why a single Global messaging standard, be it XML or EDI will never work. You see, not one messaging standard or technology will ever become the de facto method for B2B communication, period. From a technological standpoint, what is needed is akin to a universal spoken language convertor, something that in real time allows people from France, Spain, China, Japan, England and Germany to hold a flowing conversation with each other in their native tongues.
Because of this, there are now a new and emerging range of companies that quietly over the last few years have developed the answer to our prayers and are able to demonstrate universal business translators. Translators that sit within a supply chain, taking XML, EDI, flat-files and many other electronic file formats and in real-time converting these in to a format that is understood by the computer systems of connected parties. SAP can now talk to Infor, SAGE can communicate with Epicor and CODA can interpret Microsoft Navision. Now whilst this may have been technically possible with predecessors, none of us would argue that costs, timescales, speed and overheads would have grounded the project before it even began.
People have finally accepted that no one B2B language will rule the World, failed supply chain projects litter news desks and archaic technology has been banished to the broom cupboard. Dare I say it but eNirvana has finally arrived and it’s a fascinating to see how the landscape has evolved over the last few years to bring us to this point.
A handful of software companies that dared to buck the “one size fits all” trend are now leading the universal business to business translation market. Their solutions are delivered on-demand via low, fixed cost pricing models, managed and hosted on behalf of customers and operate in real-time. The killer blow though is their ability to enable supply chains to collaborate, synchronise and integrate, immaterial of their Mother tongue. Viva la supply chain!
Perceptant is a recognised expert in Supply Chain Management & Electronic Data Interchange (EDI) and has been linking supply chains for over 20 years. For a limited period companies can get a free review of their supply chain by visiting the Perceptant online B2B Collaboration and Integration Forum, which can be found on their homepage.
Tuesday, 9 February 2010
Logistic & FMCG Companies: How to Profit from a 21st Century Supply Chian
Major retailers are under tremendous pressure to go green and reduce their carbon footprint. To achieve this, they first turned to initiatives close at hand, including the reduction of energy consumption at the store level, product packaging resizing and the more efficient construction of new stores.
Some would argue however that their supply chains represent the biggest source of carbon reduction and as close to home initiatives begin to dry up, retailers are now turning their attentions towards suppliers.
FMCG companies for example are being placed under tighter and tighter scrutiny to deliver on-time, with full loads that aren’t rejected. This can have a major impact on sustainability, as full loads mean fewer lorries on our roads, fewer rejections equal less waste and on-time deliveries reduce bottlenecks and returns.
As if suppliers weren’t being squeezed enough, now comes a whole raft of new initiatives that, unless automated, will place margins under greater and greater pressure.
Nevertheless, supply chain’s can fight back, to not only deliver the carbon reductions retailers seek, but turn these initiatives in to an opportunity to improve profitability.
Picture, if you will, a supplier faced with a mandate from a major retailer to reduce its carbon footprint by 25%. That’s not a 25% reduction in its own internal footprint but the footprint it creates in trading with the retailer. Understandably, all eyes turn to logistics and product returns as two major areas that can achieve this. But how and at what cost?
The answer lies in the redesign and integration of business processes between the supplier and its hauliers that, if done correctly, can not only help them deliver major improvements in carbon footprint but also improve cash-flow and reduce costs.
For example, by exchanging delivery requests, load plans and despatch advices in real-time, suppliers and their logistics providers can increase the number of full loads and decrease the number of incorrectly timed deliveries. Furthermore, by equipping drivers with simple mobile-phone based text messaging (SMS) or Apple iPhone applications, proof of delivery (POD) messages can be sent back to the supplier’s computer system immediately the goods are received. This not only allows the supplier to invoice more quickly (sometimes by weeks) but also has a dramatic impact on reducing invoice queries.
In summary, there are many such initiatives that if implemented can help suppliers and their hauliers drive improvements to margins, cash-flow and customer service, whilst in tandem delivering the sustainability returns their customers demand.
Perceptant is a recognised expert in Efficient Logistics, Supply Chain Management & Electronic Data Interchange (EDI) and has been helping companies seamlessly collaborate for over 20 years. For a limited period, organisations can have a free review of their logistical supply chain by visiting the Perceptant’s Solutions Forum, which can be found on their homepage.
Some would argue however that their supply chains represent the biggest source of carbon reduction and as close to home initiatives begin to dry up, retailers are now turning their attentions towards suppliers.
FMCG companies for example are being placed under tighter and tighter scrutiny to deliver on-time, with full loads that aren’t rejected. This can have a major impact on sustainability, as full loads mean fewer lorries on our roads, fewer rejections equal less waste and on-time deliveries reduce bottlenecks and returns.
As if suppliers weren’t being squeezed enough, now comes a whole raft of new initiatives that, unless automated, will place margins under greater and greater pressure.
Nevertheless, supply chain’s can fight back, to not only deliver the carbon reductions retailers seek, but turn these initiatives in to an opportunity to improve profitability.
Picture, if you will, a supplier faced with a mandate from a major retailer to reduce its carbon footprint by 25%. That’s not a 25% reduction in its own internal footprint but the footprint it creates in trading with the retailer. Understandably, all eyes turn to logistics and product returns as two major areas that can achieve this. But how and at what cost?
The answer lies in the redesign and integration of business processes between the supplier and its hauliers that, if done correctly, can not only help them deliver major improvements in carbon footprint but also improve cash-flow and reduce costs.
For example, by exchanging delivery requests, load plans and despatch advices in real-time, suppliers and their logistics providers can increase the number of full loads and decrease the number of incorrectly timed deliveries. Furthermore, by equipping drivers with simple mobile-phone based text messaging (SMS) or Apple iPhone applications, proof of delivery (POD) messages can be sent back to the supplier’s computer system immediately the goods are received. This not only allows the supplier to invoice more quickly (sometimes by weeks) but also has a dramatic impact on reducing invoice queries.
In summary, there are many such initiatives that if implemented can help suppliers and their hauliers drive improvements to margins, cash-flow and customer service, whilst in tandem delivering the sustainability returns their customers demand.
Perceptant is a recognised expert in Efficient Logistics, Supply Chain Management & Electronic Data Interchange (EDI) and has been helping companies seamlessly collaborate for over 20 years. For a limited period, organisations can have a free review of their logistical supply chain by visiting the Perceptant’s Solutions Forum, which can be found on their homepage.
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