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Chain Reaction

Chain Reaction

CIO revisits one of the IT industry's greatest cause celebres: David Murray's notorious speech at the 2002 IT World Congress in Adelaide. Sue Bushell examines the impact that re-engineered global supply chains have had in Australia.

The Stories Continue

What were we thinking?

What were we thinking?

What was I thinking?

Back in May, I celebrated CIO's 100th issue by introducing a continuing series - CIO Retrospectives: Seminal Issues & Technologies - where CIO writers revisit seminal events, issues and technologies we've covered over the years.

If you're a new reader, or need a bit of a reminder regarding the "how's" and "why's" of this particular exercise, here's our premise. The writers are to kick off with "What were we thinking" - that is, why we all believed the selected story was important and the pervasive mind-set at the time among users, observers and (occasionally) vendors. Then, in some instances at least, the writer looks back and casts a jaded eye - that is, "What were we thinking?" - over the topic. Thus far, we've covered a number of issues, including the likes of Y2K, "IT Doesn't Matter", the skills crisis (or lack thereof), and security and privacy. This month CIO revisits one of the IT industry's greatest cause celebres: David Murray's notorious speech at the 2002 IT World Congress in Adelaide. In Part II, Sue Bushell examines the impact that re-engineered global supply chains have had in Australia. As always, I'm happy to entertain your suggestions for other "seminal" technologies or issues we should cover. LK linda_kennedy@idg.com

Whither goeth the collaborative supply chain?

They were not factoring in RFID, and the security nightmares conjured up by 19 fanatics on September 11, 2001 were at least 21 months in the future, but even before the start of this century canny companies were committing to a fundamental re-engineering of their supply chains.

They did not have a lot of choice, really - the evolution and massive uptake of Internet technologies was forcing their hand. By the time I wrote "The Power of Positive Linking" (published in CIO in April 2000) it was clear organizations would not just be competing with other organizations in the new competitive landscape. "Rather than competing business versus business, there's a growing trend towards supply chains competing against other supply chains," BHP IT product manager supply chain solutions Steve Maxwell told me then.

Maxwell and others like him were focused on imposing order on a plenitude of de facto enterprise Internet programs that had sprung up in departments and business units, in the hope of delivering new, low-cost, integrated business solutions to the company and external markets. The vision was impressive, although the outcome was far from certain: the hope was that the trading portal design would maximize reuse and prove to be in harmony with the speedy and less costly introduction of new Internet trading applications.

The name of the game was exploiting the potential of e-commerce and IT&T systems to help players throughout the supply chain continuum increase their competitive advantage, and it was already clear it was an imperative more and more organizations were realizing they could no longer afford to ignore.

Improved supply chain management had already proved a boon to individual enterprises seeking to extend their competitive advantage, but as I said then, "in the words of the song: 'You ain't seen nothin' yet'."

Many companies at the time were labouring to build "supply chain communities" to leverage and build on the core competencies of each member partner. But it was already clear things would get tricky as organizations sought to consolidate competitive advantage in a supply chain versus supply chain world, where they would not only have to compete with each other but also against extensive webs of suppliers. The risks involved in falling behind were clearly real, and the need for Australian companies to move on supply chain management was great. The elephant in the living room, of course, was all those small businesses, with no IT competencies of their own, hanging off the end of the line and threatening to drag the whole system down. Elephants in rooms often get ignored, but this one was starting to trumpet its calls for attention most deafeningly.

And I could see a few other threats to the smooth running of such efforts: like vested interests, empire building, interoperability problems, vendor intransigence and bucket loads of player scepticism.

By 2001 it was clear far-reaching connectivity was a long way off. Instead, what was emerging were "islands of connectivity" brought into being as the result of pressure from a major buyer or supplier, or through the efforts of new intermediaries like "portal/exchanges". Business processes were becoming linked within and between organizations, but levels of interaction were being driven by considerations of security and value. "The concept of linking supply chains is simple," Tradehub manager of business development and infrastructure Dr Robert Starling told an IES conference that year. "However, the simple model is being complicated by the move from orderly - or at least perceived as orderly - supply chains to dynamic supply webs, which are changing as buyers 'flit' between suppliers offering the best terms.

"Patterns in use of the Internet for trading are evolving. Organizations are like the pieces of a jigsaw puzzle - some are coalescing to form trading groups or islands [with] others remaining on the side and watching as parts of the 'connected world' are linking and merging. These early alignments are forming, breaking apart and reforming as the benefits of connectivity are being tried and tested," Starling said at the time.

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