Near the start of the holiday weekend, more Feedback on our First Thoughts' piece on “Xbox Live is the Future of Supply Chain," which argued that the network version of the popular gaming system showed the model for how technology would support real-time supply chain visibility and collaboration in the future.
That includes our Feedback of the Week from KOH Niak Wu of the Singapore Institute of Manufacturing Technology, who says this type of approach might finally kill the Bullwhip Effect. Also a note from Microsoft’s own Paul Manikas, who says Microsoft’s business tools incorporate many of the features we cited in Xbox already.
Feedback of the Week: On Xbox Live:
The first thing that springs to mind is the bullwhip effect. As we know, a major cause of the bullwhip is information latency, i.e., each upstream entity in the supply chain sees a slight increase in demands -- highly prominent in a forecast-driven environment. This is what I like to call perceived demand -- massaged demand information or rather suppositions on demand based entirely on forecasted data spiraling upstream. The mere notion that real-time data is communicated throughout the entire XBox Live network seems to me that the crux of supply chain visibility (and thus a weakened bullwhip effect) can be achieved. Of course, the usage of RFID technology aims to achieve such transparency throughout the supply chain too, but with a rather tethering reach.
With such information ubiquity achieved simply by purchasing an XBox, perhaps a possible future step would be to integrate RFID systems with the XBox, thus achieving complete, not to mention real-time, visibility of the supply chain.
KOH Niak Wu
Singapore Institute of Manufacturing Technology
More On Xbox Live:
Interesting notion of using Xbox Live to facilitate communication and collaboration across an extended supply chain.
In fact, Microsoft offers the real-time communication capabilities that you highlighted (web conferencing, instant messaging, presence) at the enterprise level with our Office Communications Server (OCS). We have combined OCS with Sharepoint and our Business Intelligence and database management tools to create a solution that specifically addresses supply chain collaboration and visibility. The BI tools monitor incoming data and flag alerts or exceptions. The user can drill down into the data to analyze the root cause. Then using OCS, he can determine whether a resource is available and start up a communication using phone, video or instant messaging. The solution removes the latency of finding and then fixing problems, before they ripple through your supply chain.
Industry Market Development Manager, High Tech & Electronics Industry
There are far too many communication barriers through voices. Facebook applications are the future of business communication as they allow incredible scope and flexibility and help remove cultural and language barriers and also time barriers. Huge amounts of data in all mediums including video can be passed on.
I’m not familiar with Xbox Live, but online, live gaming has been going on for many years.
At first glance, I’m thinking that the analogy, though intriguing, is pretty flawed, in that in a game, most players are focused on the one ‘episode,' and in supply chain, we are likely conducting many, many ‘episodes’ or transactions simultaneously; in some cases, across lots of time zones.
Further, managing relationships across an extensive number of touch points at various levels of authority….there is a lot of opportunity for misunderstanding in the communications. Nevertheless, if there were a ‘lead’ monitoring the whole network from ‘above’ with alert capability, yet only costing a penny a case (or less), that would be impressive! Likely some Global 3PL’s already claim this ability to do it for super high-value channels.
Maybe I need to loosen up the ‘blinders’ a notch or two!
Thomas W. Miralia
Of course this is a very doable, probably paradigm. In fact, you get your transportation folks also on board, manufacturing, customs, even competitors involved. YES - competitors. Hey, maybe an item you need, they have, but is not selling. You suddenly have an alternative source of supply.
Wow - re: tight control of available resources and, in this case, inventory. Add to all that a global perspective and partners. Now can we finally call it more accurately than a Global economy. Or Global supply chain.
We have only scratched the surface on the possibilities. The human thought lies well ahead of the technology. NOT the inverse. So, yes, the Xbox possibilities do bring to life that which we have already demanded the need for. Now we need more innovators to adapt it.
This really is a good article and, with a son that lives on Xbox Live, I can certainly relate. We have at least started this form of communication, but I don’t think people use it to the degree it could be used. It's called instant messaging. To have instant and continuous communication with people near and far, we would all have to look like those people walking down the street, driving, and sitting in trains with devices in their ears looking like they are talking to themselves.
If you work for a big company, there are already far too many meetings and analysis paralysis is the norm. IM can get you in touch with whomever you want (time difference notwithstanding as the same issue would exist with Xbox-type communication), you can share files and bring in others…..with no Xbox Live subscription required.
We’re not there as you suggest, but we’re closer than many people think.
Global Logistics Manager
I loved your article, I couldn’t agree with you more!
We need to start thinking outside the box and really pay attention to these new ways of living that are emerging around us.
There is so much that we could do by adding some creativity to how we use the tools that are already available to us.
Azucena Y. Tamez
Cardinal Health Inc.
I work in the supply chain field and play Xbox live. You could not be any more right. The Xbox live service is like no other. Is it possible to see that type of networking in the supply chain field? I am not so sure, not because of technological restraints, but the current culture within the supply chain field. I cannot speak for all individuals, but at the age of 26, I am always the youngest at the table (by quite a few years). I do not have any issues with the older generation members, but being the first generation to see the transition from pen to mouse, I feel I am more open to significant changes similar to what the Xbox live service has brought to the video game industry.
On your piece on X-Box live, it is an interesting connection and vision, but I have a somewhat different point of view. I think from a data and trend visibility point of view, there are enough tools out there to seamlessly share data. What is important in supply chain interactions is management by exception. My concern with real time communications is getting overwhelmed with too much contact, especially in a situation where there are many vendors, and reacting too quickly and dynamically before a trend has really occurred. I believe daily communications and exception-based communications is adequate and there are enough systems such as instant messaging, VOIP, video conferencing to make that pretty inexpensive and quick. So, in short, great idea, but to me, a virtual community for supply chain is overkill. Sorry to be a contrarian.
SVP SCM and IS
Harman Consumer Group
Your enthusiasm for connecting the supply chain participants is phenomenal – the Xbox metaphor is good and fun. The real metaphor that business owners, leaders, fiduciaries need to see is the trillions of wasted capacity, inventory, lost sales, etc., because most business leaders think their supply chain is “just fine.”
My experience is Xbox live combined with more of an asynchronous (loosely coupled) sharing of commitments, purchases and FYI activity is the correct approach. Inter-enterprise commitments of $ just cannot happen in real time – communication can, but the important part is after the communication, what is the commitment? We have used a series of spreadsheet working surfaces along with a number of asynchronous messaging/reconciliation tools back to structured planning data storage in S&OP and logistics tracking pretty successfully for years.
Today, the cycle times of inter-enterprise supply chain planning commitments can literally be months… just shortening the commitments and demand and supply netting to weeks cleans up a lot of the challenges. Probably takes out 30% of working capital for most firms and improves delivery commitment services levels by many % points. If there is 2 trillion in waste in today’s average supply chains, that is $600 Billion in value while opening up phenomenal new business models and solutions?
An example would be lower prices for consumers/business buyers who buy with longer lead time for delivery vs. high prices for product “off the shelf!"