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« Battery Ventures Acquires HighJump | Main | A Supply Chain Management Wikipedia ? »


JB Perrin

Dear Sir,

I always read your posts with interest.

As a prior user, participant vendor, sometime panellist and commentator of the supply chain technology arena, I agree that fundamental change is starting to sweep through the market. However, such change has been also been 'predicted' regularly over the past 15 years - so far to little effect!

Why then, might it be true now? Perhaps because some of the following fundamentals are at work in a market that has become very dynamic. e.g.

- Supply chains 'are' now networks

- Ubiquitous data communications via low cost bandwidth

- Information technology available even in the smallest organisations

- The recognition of the true cost and inflexibility of ERP systems

Many of the incumbent vendors have also been slow to grasp the implications of the impact of the so called Web 2.0 evolution. The ability to develop applications built for the world wide web, that are also inherently collaborative and able to integrate with other similar systems very easily, is profound. This, combined with the growing acceptance of business software delivered 'as a service' (SaaS), raises some interesting questions for customers.

Given that supply chains should become more efficient with greater visibility, the requirement to capture, comprehend and then share data with all relevant parties is obviously easier in a collaborative environment. Unfortunately, many of the existing tools seek to enforce the imposition of standard processes which may only suit some of the participants in any community. What is required, is a 'process agnostic' environment which supports the free flow of data and gives the participants the ability to determine who they share data with on an equal basis. This is similar to the principles exhibited by social networks.

In these environments, ERP solutions are simply nodes. Significant repositories for their owners, but of much less significance in a distributed network where a small supplier in one supply chain, may well be a much larger company than the chain master and a very significant player in others.

Attempting to replicate the functionality of ERP, WMS, TMS and other specific systems within a supply chain visibility application is inappropriate. By the same token, seeking to extend the functionality of these systems to provide supply chain visibility is also unsatisfactory, as they will reflect the bias of their original designs.

The answer may be found by focussing on identifying where the money sits in any supply chain, (usually the value of any inventory moving through it) and also the mechanism for moving that inventory - the orders. Monitoring orders and inventory and allowing the participants to view and update their status as they move through the chain is very powerful, seemingly trivial, but fiendishly difficult to achieve.

Providing such a solution as a service may be the best way forward, as it should have the ability to evolve in line with users expectations. The frequent release cycles that characterise Web 2.0 solutions should also encourage participation and feedback from the users.

To return to my initial comment, despite the frequent, unfulfilled, claims of change about to transform the industry, this time it may well turn out to be true. However many of the existing incumbents may find it's not just the competition that has changed, but the rules themselves.

With the Olympic games in progress, it's appropriate to recall the ancient Chinese curse "May you live in interesting times". For many companies they are about to discover how interesting things can be.


JB Perrin

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