Time and transparency: Tickets to profitability in the supply chain

Today, spiralling transaction volumes are placing increasing pressures on companies to improve the management of order-related transactions in the supply chain in order to enhance profitability.

Annette Hieber, sales and marketing director at Bytes Business Solutions, looks at the challenges facing companies in their quest for fast, efficient, real-time collaboration between trading partners.

The emphasis on e-business and e-commerce in the 1990s resulted in significant progress towards the removal of many of the barriers to inter-company trade. During the decade, the rise in acceptance of enterprise resource planning (ERP) software played a key role in enabling companies to adopt standard internal processes and establish technology platforms to assist them in automating many tasks.

Towards the end of the period, companies were actively looking for ways to work together more productively and profitably in the "supply chain". Initiatives emerged aimed at removing transactional differences and improving "go-to-market" collaboration.

These activities were fuelled by the fall of trade barriers around the world and new initiatives designed to boost trade on a global basis.

However, even the most efficient business-to-business (B2B) companies soon realised that, in the global marketplace, a temporary "out of stock" situation carries a heavy financial penalty, as do production lines operating over capacity, and excessive inventory holdings.

With competitive pressure reaching an all-time high at the turn of the century, the need to streamline operations and identify opportunities for cost cutting within every business process and at every transition point in the supply chain, became vitally important.

While many organisations critically examined their internal systems and processes for opportunities to eliminate costs and gain strategic competitive advantage, very few were looking outside of their companies` walls to find the chinks in their armour.

This was obvious because internal processes are typically easier to address and therefore have a higher rate of success. Ownership, responsibility and accountability are more easily defined.

Although there may be interdepartmental barriers, these are more easily toppled when compared to inter-company barriers. And there are often fewer concerns about security when sharing privileged information internally than there are when information is to be shared externally.

However, for today`s companies looking to external sources for success, it is important to note that value chains are only as strong as the weakest link and it is therefore necessary to fully integrate internal and external projects in order to achieve a meaningful return on investment (ROI).

Without a thoroughly integrated internal/external infrastructure, B2B initiatives are destined to provide little value in the best-case scenario, or no value in the worst.

The first step is a solution that enables information to flow effortlessly throughout the organisation, independent of how many legacy or packaged applications may be in place. This information infrastructure must provide an online, real-time link between disparate applications both within the organisation and to those of business partners and customers.

The objectives of such solutions should be to:

* Enable the dynamic, guaranteed delivery of information across these applications and systems in the shortest possible time.

* Simplify and standardise on-going integration strategies with an agile platform that delivers flexibility in terms of unleashing the flow of information across all systems.

* Accelerate the deployment of appropriate business intelligence systems to speed time-to-market through a graphical development environment, common business process templates and front-office and back-office connectivity adapters.

* Centralise management and monitoring of the distributed integration environment through strategically enabled management consoles for both partners and customers.

* Ensure support of current and future processing demands through a distributed and optimised integration architecture designed for rapid growth, high throughput and data integrity.

To fully achieve success, companies in the supply chain must rise up out of their fiefdoms of information and their departmental approaches.

Business and process integrity can only be secured by providing clarity of view into an organisation`s internal and external processes - with real-time monitoring and management.

This will afford all members of the supply chain the opportunity to improve process understanding and adapt to change by elevating the business logic into the process layer and incorporating human participation.

In order to provide transparency to the business users a graphical interface should be provided for rapidly modelling, documenting and implementing business processes as activities, decision gates and sub-processes.

An emphasis on transparency should also motivate organisations to monitor all aspects of their business and trading communities. This will have spin-off benefits allowing them to react in real-time to business events such as increased customer demand, inventory shortages and quality problems.

While the challenges to any B2B initiative may seem daunting, the successful combination of process-driven e-business integration and the ability to leverage existing IT investments bring together two basic tenets of competitive strategy.

Unique e-enabled business processes allow companies to differentiate themselves from their competitors providing strategic competitive advantage, while the leveraged investment in existing systems further generates operational efficiency.

In conclusion, it is important to note that constructing business processes that transcend the barriers of the enterprise and tightly link both suppliers and customers provides an advantage that is not easily imitated.