e-world: coming soon to a company near you

Collaboration between manufacturers and trading partners is inevitable.

By -- Modern Materials Handling, 8/1/2000

While the Internet is transforming the way consumers buy products, manufacturers have been slow to adapt to new economy business practices.

"Most manufacturing plants aren't ready for e-world," said Andy Chatha, president of ARC Advisory Group (Dedham, Mass.), at ARC's eighth annual manufacturing forum in Boston.

"They haven't made the investments necessary to integrate their information systems, optimize their processes, and collaborate with their supply chain partners. Integration, optimization, and collaboration are the keys to e-manufacturing success."

Traditional manufacturing begins with product design and ends with a sale. e-manufacturing, however, begins with an order. Manufacturers then turn to electronic marketplaces to procure raw materials and collaborate across the Internet with their established trading partners for critical component parts.

"That's why collaboration is going to be so important in the future," says Chatha. "You can't survive in e-world without the help of your trading partners."

Companies making this transition, however, still need to support their traditional businesses, says Rich Sherman, vice president, visioneering, EXE Technologies (Dallas, Texas).

"We've seen a lot of noise and hype about the Internet in the last year," says Sherman. "But in the end, e-commerce is still about profits. We have to design information systems that close the gap between fantasy and a practical business system."

Sherman expects an increase in warehousing strategies like postponement, order assembly, and cross docking to meet the needs of manufacturers and distributors operating at Internet speed.