Having visibility into your procurement and fulfillment processes is like reading the wall chart in the optometrist's office. The big E at the top of the chart - that's your warehouse or distribution center. Nearly anyone can make out the "big E" facilities without even squinting. But those fuzzy little letters and numbers on the seemingly faraway bottom row, the O that might be a G, the 8 that might be a 3 - those are your suppliers, customers, and third party logistics providers (3PLs). To bring them into focus, you'll need high-powered lenses. You'll need, in fact, wireless and XML (extensible markup language)-enabled applications for Web-based communicating and alerting across a multi-enterprise, potentially global supply chain.
XML Removes Enterprise Blinders
The key to integrating information from multiple enterprises is XML. Because XML enables data and formats from different applications to be delivered and read via the Web, it offers constant visibility into procurement and fulfillment processes across the supply chain. XML provides access to more data, including more recent data, than is typically transmitted via EDI (electronic data interchange) documents, such as purchase orders and invoices. Since EDI is a batch solution, there can be significant delays between data transmission and retrieval. "The difference between EDI and XML is similar to using the postal service versus using the telephone," says David Landau, director of product management for Manhattan Associates (Atlanta). "Using EDI to communicate with my suppliers, I may not hear anything until I get an advance shipping notice. But, looking at my suppliers' XML documents, I can determine, at any moment, which factory will handle a particular item on my order, when it will go into production, and how many shipments it will take to fulfill the complete order."
XML can also be used to integrate data generated by the various department-specific applications within a company. Richard J. Sherman, chief marketing officer for V3 Systems, Inc. (Charlotte, NC), advises IT purchasing decision makers to consider only applications designed for XML-enabled interoperability. When applications can talk to each other via XML, significant events generated in one enterprise operation are less likely to be inadvertently ignored by another. "A market forecasting and planning tool may project a demand that stirs the marketing department to action," Sherman says. "However, the resulting campaign may generate orders that production and distribution aren't prepared for. XML provides a relatively unstructured way to send event-based alerts, in real time, to all departments that could be affected."
Wireless Sharpens The View From Afar
For both Sherman and Landau, wireless mobile computing enhances companies' ability to respond effectively and efficiently to real-time alerts. Sherman points, in particular, to the impact of decreasing costs of personal handheld computers, coupled with advances in connectivity and bandwidth. "With wireless devices, you can bring instantaneous alert notification to any level of the supply chain. That capability moves things closer to true integration of planning and execution," Sherman says. Landau agrees, noting that, with alerts coming to them via mobile devices, managers don't have to sit in front of workstations in order to monitor what's happening in the supply chain. "Integration with your suppliers' WMS gives managers the opportunity to reroute inventory whenever they're alerted that there's going to be a delay or shortage," Landau says. "Or, managers out on the warehouse floor can quickly reassign labor if they're alerted to heavier demands in picking than in receiving."
The pressure to respond quickly to alerts is heightened by suppliers and customers expecting increasingly faster turnaround. They don't want to incur the expense of maintaining inventory beyond their immediate needs. And, they want to respond to the market demands of today, not yesterday, and certainly not of last month or last year. That's why the time between the appearance of a market trend and the fulfillment of orders that reflect the trend is becoming more and more compressed. Consequently, forecasts based on historical trends or anticipated spikes may be out of sync with actual customer ordering behavior. In addition, warehouse and distribution activities may be slow to respond to changing market conditions. Without real-time visibility into activities and needs across a multi-enterprise network, your supply chain planning and execution processes may be woefully misaligned. As Sherman puts it, "Companies have invested millions in supply chain planning systems that are almost always wrong."