Supply chain collaboration makes a comeback
By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 12/15/2005
During the Internet boom, two of the hottest ideas going were supply chain collaboration and electronic marketplaces/exchanges that brought together buyers and sellers.
Both appeared to blow up when the technology boom went bust.
While the terms aren’t thrown around today like they once were, a look at supply chain management solutions being offered by Sterling Commerce (800-299-4031), Click Commerce (312-482-9006), and Mitrix (866-648-7491) reveal that the ideas are still very much alive.
Each of the above providers has integrated traditional supply chain execution functionality, like warehouse and transportation management and supply chain visibility. Also included here are broader supply chain management and communication solutions like electronic data interchange (EDI), distributed order management and service parts planning.
For instance, last year, Sterling bought Yantra and Click bought Optum, two leaders in supply chain execution. Mitrix, a solution developed in-house and then commercialized by Mitsui, also has inventory and warehouse management functionality in its suite.
“What they’re trying to do is build a platform for multi-enterprise collaborative commerce,” says Greg Aimi, director of supply chain research at AMR Research (617-542-6600).
That’s a niche that isn’t serviced by enterprise resource planning (ERP) and traditional supply chain execution systems, which are meant to run a single company. “As we move towards demand-driven, agile supply networks with contract manufacturers and third-party logistics providers, they believe there’s a need for a platform to integrate those networks,” Aimi says.
The vendors agree with Aimi’s characterization.“We’re able to tie together the entire life cycle of a product for a customer,” says Steve Cole, ClickCommerce’s senior vice president of product management. “That’s the ability to create demand, deliver on those orders and service the product afterwards.”
“We’re helping customers synchronize and collaborate with their trading communities,” adds Scott Pulsipher, vice president of product management for Sterling Commerce. “That includes a network foundation for partner relationships, the management of the business processes you want to collaborate on and finally the core applications that enable that collaboration.”
The target for these solutions are complex supply chains with a network of suppliers and trading partners and complex products with long use cycles. Many of these solutions are also offered as an on-demand solution that users can subscribe to and pay for based on their actual use, rather than license the product.
“The on-demand model allows us to make available best practices in supply chain management to companies that could not previously afford them,” says Ed Lewis, president and CEO of Mitrix.
If that combination of connection and collaboration tied to an on-demand model sounds like the rebirth of the electronic exchange with a supply chain execution twist, you’re not far off the mark, according to Aimi. “What we’re seeing is a much more practical approach to the market,” he says. “What they’ve discovered is that the value in an exchange isn’t in running an auction to source material at the lowest possible price. It’s in creating a trading community where multiple companies act in a synchronized way.”
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