Supply Chain Smarts

Fed up with spending big bucks for systems that don't deliver an enterprise view of information, companies are turning to supply chain intelligence solutions to improve corporate performance.

Now that its corporate customers have become real-time enterprises, commodities trader Gardner Smith can find out in an instant what its Singapore debtors are doing or the volume of recent purchase orders from South Africa or the US. It can compare customers across different businesses and different countries and see at a glance where money is leaking out of a deal or the supply chain.

And because Gardner Smith updates its data warehouse hourly and processes all transactions in real time, CFO Glen McMillan can log on to the company reporting portal in Crystal Enterprise to perform up-to-the-minute checks on individual customer profitability, to learn the global picture on suppliers or see at a glance where the costs are in the supply chain, not to mention the prevailing business drivers. "It's very, very powerful stuff," McMillan says. "The benefits are enormous. Now that we've got everyone online, we can sit here and look into the data warehouse at the latest sales and purchase orders. That gives us then our risk profiles and starts to give us our real bang for our buck."

Gardner Smith is just one of a growing band of organisations striving to leverage CRM, data warehousing and B2B technology - together grouped as supply chain intelligence (SCI) solutions - to move up the value chain.

Despite spending up big over the past 10 to 15 years on systems to drive corporate performance, many executives have found they have managed to standardise the input of information without delivering one iota on the promise of an enterprise view of information. They have systems in place to manage day-to-day operations, but the gap between high-level strategic objectives and the day-to-day activities of the production line remains vast.

"What has been missing for a lot of these companies is the use of supply chain intelligence as a way of guiding this new capability that they now have, in a way that gives them better company performance by achieving better supply chain performance," says Jim Lawton, vice president of product management at US supply chain firm Optiant. "For a lot of companies - especially in markets where a product has become increasingly commoditised - having a higher-performing supply chain can help them drive certainly the bottom line target numbers, but revenue as well."

Until recently organisations wanting to do more sophisticated things with their supply chain needed a set of highly skilled and mathematically oriented folks capable of building models using spreadsheets that would often take several months to create. Those models were inevitably very specific to the supply chain and products being modelled at that particular point in time, and usually by the time the spreadsheet was populated the supply chain around which it was built had changed.

"A couple of our customers have spent a couple of million dollars creating these very elaborate spreadsheets but they were inflexible and they required literally an army to maintain," Lawton says. "What we've really seen is that one of the things that has enabled the technology to take off in the last couple of years is that the [SCI] products are much more mature, and can be used by a planner or buyer."

There's considerable enthusiasm among some business sectors for the use of data warehousing and business intelligence (BI) to optimise supply chain operations. A recent survey by Cutter Consortium found 31 per cent of surveyed organisations were currently applying data warehousing and BI to analyse supply chain-related data, with another 36 per cent planning to implement supply chain intelligence over the next six to 18 months. For these groups, plan analytics is a top priority, followed by source analytics, deliver analytics and then so-called "make" analytics, which involves analysing actual production versus planning and measuring the accuracy of the production plan for a certain period of time or operation.

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