Speed wins at Owens and Minor
"If you want to have more flexible, adaptive business processes, move your IT applications to SOA," says Meta Group analyst Janelle Hill in a new article in Intelligent Enterprise that profiles some SOA success stories.
One of the companies profiled in Michael Voelker's excellent piece is Glen Allen, VA-based Owens & Minor, a respected distributor of medical and surgical supplies. Under the leadership of CIO David Guzman, the company has embarked on a four-year initiative to transform its IT infrastructure based on SOA principles. Legacy apps -- based on 20-30 year old technology -- simply cannot be cost-effectively customized or re-coded to meet the company's high demands in areas such as supply chain management.
Rather than ripping and replacing existing apps to install a new ERP platform, the company has implemented "application modernization" software from Relativity that "analyzes legacy code, identifies underlying business rules and helps rearchitect the software as network services." Now, the services are up and running on BEA application servers.
"In the course of the SOA project, Owens & Minor recognized that it was creating not only a modern enterprise architecture, but also a multitiered, component-based environment that would improve processes," writes Voelker. With that in mind, the company adopted a BPM suite from Fuego to help it orchestrate such components, design processes, produce code for integration and monitor automated processes.
One process the company transformed was the "debit memo process," which enabled the company to locate expired products in its warehouses and return them to manufacturers for credit. The company's existing supply chain system was slow and demanded a great deal of manual activity to execute the process. However, the new approach enabled the company to automate the workflow to a much greater degree.
"Tapping legacy services, Owens & Minor was able to compose a new debit memo process in less than a month. The Fuego process engine receives the inventory report and relies on a rules engine coded with each manufacturer's return policy to create a prioritized pick list for warehouse staff," the article explains. "The process engine automatically generates e-mails to manufacturers to obtain return authorizations, create shipping requests, notify accounts payable and track credit notices. Warehouse employees need only pull recommended returns and handle the physical shipments...the new process has already improved management of expiration dates, prioritizing product pulls and enabling the company to return more products within allowed time periods."
Owens & Minor now forecasts annual savings of $650,000, "half attributable to better inventory accuracy and half to productivity savings and improved cash flow." Leveraging SOA and BPM, the company can now automate processes in a few weeks that once would have taken as much as nine months. As Guzman puts it: "Speed is key."