Unchaining supply chains

We don't want to our supply chains to merely cut production and distribution costs anymore -- that's so 20th Century. Visibility, real time, and intelligence are where the supply-chain action is at these days.

AberdeenGroup just released the results of a study that shows that close to half of the companies it surveyed are looking to SOA and Web services to solve the more vexing issues around supply-chain management.

John Fontanella, author of the study, concludes that most companies -- even those with large ERP installations -- are saddled with a patchwork of applications and systems for their supply-chain functions. These range from best-of-breed applications, on-demand services, and enterprise resource planning (ERP) systems to simple desktop applications. "After years of billion-dollar supply chain technology investments, enterprise users aren’t much better off than they were a decade ago. Something has to change in the way we design and integrate our processes and software to make them more effective and efficient."

Seventy-five percent of companies in the survey say these jury-rigged supply-chain systems limit the amount of services they can offer customers. Sixty-one percent said that they are forced to employ manual application workarounds to meet supply-chain management requirements.

SOA to the rescue?  According to Fontanella, SOA represents "the next big breakthrough in software design and deployment, leading to cheaper and faster integration and more flexible business processes. For the first time, business users will be able to summon applications to support a business process rather than launch a business process constrained by the application...  They will also be able to integrate with partners without today’s high costs and complexity."

To address these challenges, about 45 percent of the companies surveyed have SOA or Web services projects involving the supply chain underway. Almost 20 percent of respondents plan to launch similar projects in the next 12 months.

How can SOA deliver on this promise? Through composite applications. By providing the flexibility to adapt to differing trading partner demands. Standards-based, composite applications could link warehouse services with order management, inventory planning, and transportation business services to create a fulfillment process appropriate to the customer. "Business services could be added to enable cross-docking, multi-channel fulfillment, and value-added services to be available when required," Fontanella adds. "Data within legacy systems can also be exposed to processes, giving them new life in the SOA world."

Fontanella goes on to make this interesting point that often gets lost in discussions on SOA:  The major vendors -- ERP giants included -- have been redesigning and rebuilding their own applications using Web services and SOA standards and building blocks. These composite applications are now part of the vendors' own development efforts, but they ultimately will be released into the open market as well.