Seven Steps to a Smarter Supply Chain

Today's business leaders wisely leverage the speed and power of integrated supply chains to compress cycle times, reduce costs, improve customer satisfaction and increase revenue. You already know that it's critical for e-business success to define a community standard and platform for communication. Now that you've developed your supply chain, how do you make it "smarter"?

Today's business leaders wisely leverage the speed and power of integrated supply chains to compress cycle times, reduce costs, improve customer satisfaction and increase revenue. You already know that it's critical for e-business success to define a community standard and platform for communication. Now that you've developed your supply chain, how do you make it "smarter"?

Smart Step #1 Achieve Internal Integration

Smart Step #2 Provide External Integration

Smart Step #3 Become an Extended Supply Chain

Smart Step #4 Plan for Shared Visibility

Smart Step #5 Plan for Proactive Monitoring

Smart Step #6 Build Capabilities for Enterprise Intelligent Response

Smart Step #7 Plan for Community-based Intelligent Response

Smart Step #1 Achieve Internal Integration

Leverage your existing IT investments. You must be able to connect with your internal systems as well as enabling external interfaces. It is vital to bridge the gap between ERP, SCP, SCE CRM e-commerce and your legacy systems. Once you're integrated internally, you can begin to integrate external partners to connect their disparate systems, platforms, applications and communication formats. Internal integration is the foundation for establishing relationships and agreements with trading partners.

Smart Step #2 Provide External Integration

Establish collaborative links to your trading partners as well as your online marketplaces. Use industry- and/or standards-based processes to enable better interoperability with your partners and customers. Remember that trading communities enable more business transactions in less time. Create additional channels for finding and establishing new customers and suppliers. The goal is collaborative trading execution.

Smart Step #3 Become an Extended Supply Chain

The linear supply chain has been replaced with the more circular extended supply chain -- vendors, customers, suppliers and all trading partners banded together to create a public or private trading community. In order to expand your old linear chain into a "smart" extended supply chain, maximize revenues from your existing channels and identify new channel opportunities. Reduce your costs through expanded logistics possibilities and consider new supplier options. Increase company awareness of outsourcing options. The goal is an extended supply chain that spans geographies, involves multiple logistics service providers and incorporates activities that add value.

Smart Step #4 Plan for Shared Visibility

One of the challenges of maximizing your supply chain inventory is synchronizing across internal and external warehouses and inventory pools. Create a plan for monitoring and managing inventory positions and activities across multiple locations along your extended supply chain. By sharing visibility into the extended supply chain you can 1) lower inventory carrying costs, 2) improve service levels, 3) reduce operating costs and 4) improve asset use.

Smart Step #5 Plan for Proactive Monitoring

Visibility alone isn't enough to manage information effectively across your supply chain; you need the ability to look several links down the chain and spot potential events before they happen. The volume of information and the speed at which you need it require an exception-based method for managing information. Smart supply chain participants work as a community to define the business rules exceptions that need to be monitored. They then implement a system to allow them to receive alerts and respond to unexpected issues.

Smart Step #6 Build Capabilities for Enterprise Intelligent Response

An intelligent response capability means real time, event-driven, exception-based monitoring and management of the entire supply chain - whether this is one enterprise or hundreds of trading partners. By applying optimization and/or decision support tools, intelligent response allows you to respond to an exception with profiled alternatives or possible solutions to these unexpected supply chain events. This enables an automatic resolution or an exception alert with alternatives for electronic execution of the remedy. Remember, early notification means early response and resolution.

Smart Step #7 Plan for Community-based Intelligent Response

Having a community-based intelligent response capability provides optimal solutions to problems within a community rather than solely within an individual enterprise. Use the data collected along your extended supply chain to leverage community-based knowledge of inventory, transportation and item characteristics to provide real time response and decision scenarios for supply chain failures. This allows you to monitor actual vs. planned events across the extended supply chain to identify, interpret and respond to exceptions. Community-wide monitoring and management enables rapidly evolving collaborative processes and distributed business rules.