E.I. du Pont de Nemours and Co., the $27.3 billion chemical manufacturer, ships products to and from every corner of the world, and uses many shipping companies to do it. The problem: Each shipper had its own tracking application. "It was difficult for us to aggregate a global view of our logistics data," said Mark E. Smith, DuPont's global logistics technology manager. The company needed up-to-date costs and shipping information and easier-to-use technology. "We had no single corporate system for people to get that information," he says.
So four years ago, DuPont began implementing a Web-based suite of supply chain applications by transportation software specialist G-Log. New capabilities have been added each year and employees in the Wilmington, Del.–based corporate headquarters can now draw on a centralized system to access timely tracking and billing information on a global basis. More is on the way in the coming year. Smith is looking forward to an upgrade that will include a new application that is expected to cut the amount of time it takes an employee to complete a transaction in the system by 20%.
Companies have always worried about breaks in their supply chains, but probably never more than today. Global competition makes a failure to meet customers' demands a risky proposition that could lose both short-term business as well as a long-term relationship. Add to that the corporate obsession with smart working capital management and cash flow efficiency, and you can see why the priority for creating an automated supply line has risen dramatically.
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But getting a seamless relationship is not that easy and often requires more than one solution. According to research by Boston-based Aberdeen Group, 75% of executives say their supply chain software limits the amount of services they can offer their customers. High on the list of complaints is a lack of internal integration, as well as difficulty communicating with systems at other companies.
Two developments should help: While over the past several years best-of-breed vendors have bitten off discrete segments of chain automation, enterprise software giants Oracle, which bought G-Log in October, and SAP have been gradually pushing into the space and are focused on more than one aspect of supply chain management. But even more significant is the emergence of an integration framework, known as service-oriented architecture (SOA), which should allow disparate software systems to talk to each other without forcing a user to scrap or rebuild its system.
SOA involves building a more open system architecture into a platform that allows for better integration and more flexibility in how business applications are deployed. SAP and Oracle are moving towards SOA-styled platforms for supply chain software upgrades, as are some of the best-of-breed players. "The whole thing is not about more applications, but better ones," says John Fontanella, senior vice president and research director of supply chain services at Aberdeen Group. "This is starting to be available today, and in the next few years, we'll see widespread adoption by software vendors. Users [will then be able to] mix and match capabilities, regardless of what vendor they're from, to suit their specific needs."
SOA frameworks, when adapted to supply chains, also mean that information such as the price a customer is paying for a particular shipment isn't only contained on a hard-to-access supply chain component, but is available via the Web for more global use throughout an enterprise.
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