Expert Insight: Guest Contribution

By Greg Johnsen ,
EVP Marketing & Co-Founder,

GT Nexus

Date: June 16, 2010

Supply Chain Comment: Supply Chain Intelligence – in a Cloud


Is Cloud Better Enabling The Sharing Of Information?

Remember the telephone game?  You tell a friend, and she tells a friend, who tells another friend, who tells another friend.  Etc.  By the time you get to the end of the chain the message is completely changed.  People, in their handling and passing of the story, introduce errors – and variability.  They don’t repeat exactly what they heard; they take in what they hear, they absorb it, then they repeat their version of it.  Now imagine that someone in the middle of the chain actually gets her own news, relevant to the first piece of news, and wishes to modify that news so her friends up and down the chain can get the newest version?  Well, now the telephone game has to go in reverse – one way, up the chain to “redistribute” v2 of said news item; and then the other way, down the chain. 

 

This is no way to get the news out!  And yet this is exactly the information model that the modern supply chain labors under today.  Enterprise software systems, focused on the transactions and process flows within a single company, were not designed or architected to support the massive information exchange requirements of inter-company commerce.  Think that EDI exchange solves that?  Think again.  It’s just a more efficient version of the telephone game!  You send a file to a partner, who sends his “version” of the information to yet another partner, who sends his version of the information to yet another partner.  And this happens for thousands of information “packets” thousands of times a day, up and down the modern supply chain.

 

Information that was meant to be shared should be put in a place where it can be shared.  That’s exactly what a Cloud supply chain enables.  A purchase order isn’t just “sent” across an electronic “connectivity” platform.  It’s held in the platform; it exists on the platform.  The platform becomes an intercompany transaction system of record, holding and tracking the rapidly evolving versions of this business object – and hundreds of others like it – so that any partner in the network can get to the order quickly and easily, in one place.  It’s in the Cloud.  Orders, SKUs, shipments, invoices, payments, milestones, exceptions, costs – all these are held and managed in the Cloud, in one place, so that partners up and down the value chain can short circuit the vastly inferior and now outdated telephone game. 

 

But to be clear, these cloud based supply chain collaboration and control systems are not going to replace the enterprise software systems (installed or delivered in the cloud) that you’ve been relying on for the better part of three decades.  They’ll extend enterprise IT systems. They’ll be far better and far more intelligent connecting infrastructures than the “thin line” point-to-point EDI networks we know today. They will become vital IT infrastructure, connecting enterprise systems with the systems of trading partners and service providers across the value chain.  They’ll not just pass data; they’ll enrich the data.  They’ll transform it with business process intelligence gained from actual workflow and collaboration conducted on the platform, across the community, across hundreds of inter-company processes that require rich, rapid and massive information sharing at the community level. 

 

Here’s an example.  I’ll go back to the big daddy of business objects – the purchase order.  Your enterprise system for order management is your system of record.  It’s an enterprise software system and it was built to do that.  But your purchase orders, once created, are at some point pushed beyond the “four walls” (by fax, by email, by EDI) to suppliers and to service provider partners who ultimately repurpose the PO and the data within the PO to drive logistics and payment processes that are not captured or managed at all in your enterprise system.  This is valuable, hard-to-get data. For example: data regarding the work status and state of the order itself while it’s being worked and fulfilled – work-in-progress milestones in production, and documents such as vendor bookings and commercial invoices, and packing lists, which are generated from PO data and which relate to the PO.  When your 3PL coordinates with that supplier to fulfill the order, even more data gets generated:  actual shipment dates, equipment conveyance details, forwarder cargo receipts, manifests, carton counts, carrier bookings and shipping instructions. It’s a long chain, with lots and lots of data accumulating, and this is just the first third of the journey.

 

Where does all that data get captured and tracked?  How is it organized and put to use to enrich and enable all the partner systems which it connects?  This is the job of your Cloud supply chain platform.  It’s the organizing information center at the center of your supply chain, and it becomes a new kind of system of record for you and your community:  a transaction system of record for the transactions that happen beyond your “four walls.” 

Agree or disagree with with our guest contributor's perspective? What would you add? Let us know your thoughts for publication in the SCDigest newsletter Feedback section, and on the website. Upon request, comments will be posted with the respondent's name or company withheld.

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About the Author

Greg Johnsen is executive vice president of marketing, and co-founder of GT Nexus. Mr. Johnsen has more than twenty years of sales, marketing and product management experience with Silicon Valley technology companies. He has spent the last ten years focused on supply chain and logistics, working with hundreds of leading companies to drive sustainable improvements in global sourcing, transportation management, inventory control and a range of international operations. Prior to GT Nexus he was with Scopus Technology, an early leader in the customer relationship management software domain. He began his career at Ingres Corporation, a pioneer in relational database technology. Mr. Johnsen has a Bachelor of Arts degree in English from the University of California at Davis.

 

Johnsen Says:


It’s the organizing information center at the center of your supply chain, and it becomes a new kind of system of record for you and your community.


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