Supply Chain Management Articles and Reports

Supply Chain Management Software-as-a-Service

IBM — A Faster, Leaner, More Efficient Global Supply Chain

IBM aims to practice what it preaches. The
company's early support of fully automated
processes—such as order management, service
requests and OEM manufacturing work
orders—has served to improve customer
satisfaction and operational efficiencies. And
over the years the company has remained committed
to continuous improvement through the intelligent
application of new technologies, becoming a model
for a fully automated enterprise using the most
advanced Supply Chain solutions and practices.

IBM defines the next level of business process
efficiency as an on-demand model: "An enterprise
whose business processes can respond with speed
to any customer demand, market opportunity or
external threat." This model requires seamless
end-to-end business process integration of
internal IBM systems while extending into key
partners, suppliers and customers.

THE CHALLENGE

With one of the largest and most complex supply
chains in the world, IBM spends $41 billion
annually on orders for more than two billion
component parts a year, working with 33,000
suppliers and 45,000 business partners.

"IBM has long focused on creating and building an
integrated, end-to-end supply chain," says Kevin
O'Connell, IBM's director of manufacturing and
Procurement processes. "Now we wanted to bump it
up to new levels of collaboration. To achieve our
on-demand goals, we needed to extend integration
of business processes across a multi-tiered
Supply Chain and into customer and partner
systems as well."

Published with Permission from Dan Kaplan, SMC Data

In today’s competitive business reality, companies must lower their operating costs and increase productivity just to survive. Yet, many companies are reluctant to upgrade their computer system, remembering their past experiences and not wanting to incur new expenses.

The tools and technologies exist but a fear of change prevents some Manufacturers, Distributors and Retailers from making the cultural change that’s needed to use a new Technology to improve how their business operates. What they fail to realize is that having aging software will result in higher operating costs company-wide and excess inventory in the warehouse – meaning a decrease in bottom line profits.

Ingersoll-Rand (IR) wanted to improve service productivity, increase spare parts sales and boost customer satisfaction. Through an Enigma solution, IR delivers and dynamically updates its maintenance manuals, parts catalogs and service bulletins IR dealers now work with the latest service information to improve service decision-making.

Over the past 20 years, the distribution-related business
functions have grown from being responsible primarily for physical distribution;
i.e., warehousing and transportation; to logistics, which encompasses customer
service and finished goods inventory planning and management as well as physical
distribution. Now, as a result of the emergence of a global customer-driven
marketplace and the need to improve material and product flow, it has progressed
to supply chain management. As each of these growth steps has occurred, more
functions have been brought under the logistics function umbrella: customer
service, forecasting, finished goods inventory planning and management,
sourcing, supply chain partnerships, and even production planning.

JDA Software, a leader in the retail software with more than 4,800 customers will acquire Manugistics, a leading supply chain software vendor with over 800 customers. While JDA started by focusing on POS and retail optimization software, Manugistics grew by focusing on manufacturing. Forecasting, demand management, pricing, transportation management, supply, raw material inventory management and supply management are some of the functions from Manugistics. Retail portfolio management, channel clustering, assortment planning, shelf space management, inventory positioning, replenishment management, vendor managed replenishment, retail network planning, performance intelligence, warehouse replenishment are some of the functions from JDA Software. For quite some time both of them were trying to break into each others market. So merger will give both companies access to more customers. There are already more than some 100 customers using both the applications. So it is a strategic acquisition for JDA. JDA has a track record of successfully acquiring and integrating companies. See below for a list of acquisitions in the past.

Supply Chain Management is a powerful management tool to win over competition. Well designed Supply Chain for different products will look different. Supply Chain for supplying pasta will be different from Supply Chain for selling fashion jewelry or rushing airline spare parts. Supply Chain for producing and delivering pasta will be designed for productivity and efficiency. Supply Chain for airline spare parts or offshore drilling equipment will give utmost importance to timely delivery and availability at any cost. Nature of the product, customer expectation, production method and parts used are some of the factors to be considered when designing a fitting supply chain. Demand and supply side uncertainty are the key determining factor when designing a Supply Chain for a product. Well designed Supply Chain that suits a product or category is a competitive advantage.

At the height of congestion in 2004, 83 ships were stuck in the ports of Los Angeles and Long Beach waiting to be unloaded. Even worse, it took six to eight days to unload the docked ships. Most of ever increasing East Asian trade flows through west coast ports. With the twin ports of Los Angeles and Long Beach accounting for 62% of goods flowing through west coast, any disruptions in operation sends a serious ripple effect in supply chain. Seattle, Tacoma, and Oakland are other major sea ports in the west coast. Total shutdown of all the ports from Alaska to California following the strike by union of in 200s is any evidence required to emphasize the criticality of these ports. Oakland and ports further away absorb some traffic and offer some cushion effect to LA and LB ports. Increase in capacity of west coast ports through capital investments and operational reforms are not adequate enough to keep up with the increasing demand. Major ports experienced some severe congestion in 2003. Shippers are Learning to rely less on west coast ports and building backups. Supply Chain managers are finding new ways to address this Supply Chain risk. Change in landscape of Logistics can be noticed through the following: