Is collaboration dead?
Bob Trebilcock -- Modern Materials Handling, 3/11/2004
Supply chain collaboration was one of the most talked about concepts during the Internet boom.An ad for an enterprise resource planning (ERP) company's collaborative solution summed up the times: Collaborate or die!
Today, few consultants mention the C word. The ERP supplier that created the ad has been swallowed up by a competitor. All of which begs the question: Is collaboration dead?
Hardly, says Bill Swanton, vice president, AMR Research. "Collaboration has not gone away," says Swanton. "At a minimum, companies with very tight and persistent relationships with their customers and suppliers are giving visibility to more real-time information about what's coming off the shelves or the factories for better decisions." Swanton says.
But instead of calling this collaboration, AMR refers to this approach as the demand driven supply network. It is especially important to companies that rely on contract manufacturers, third-party logistics providers (3PLs), vendor-managed inventory, in-line parts sequencing, and collaborative planning forecasting and replenishment (CPFR).
The reasons are simple. "The easy cost-cutting measures have already been done within the four walls of many companies," says Chris Heim, president of HighJump Software. "The next significant gains are going to come from working with your suppliers."
Supply chain execution and planning software enables that kind of collaboration. "With a collaborative application, a user can automatically send an order to a supplier; receive back an acknowledgement of that order; provide the information to print compliant shipping labels; receive an advance shipment notification; and receive an acknowledgment that an order was shipped," says Heim.
Seagate, a manufacturer of hard drives for Dell, HP, and other major computer makers, uses a collaborative planning system (Manugistics) to pick up changes in demand to manage vendor managed inventory programs for its customers. "Seagate's system is in constant communication with account managers who are onsite at a customer's warehouse to pick up real-time demand," explains Dan Rudolph, director, solutions strategy for Manugistics. "That information is then fed into the company’s planning and forecasting systems."
Lucent is an example of collaboration on the execution side of its business. Lucent's warehouse management system (Optum) enables electronic communication between Lucent's network of suppliers, third-party distribution centers, and installers to synchronize the delivery of component parts for an order. If a delivery date changes, the system adjusts delivery schedules then automatically notifies all parties impacted by the change. "Before Lucent began using the system, parts were onsite when they were needed about 30% of the time," says Mary Haigis, chief marketing officer for Optum.
In both cases, collaboration is very much alive and kicking.
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