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Webinar presentation on the 3 W's of Supply Chain Visibility and Demand Management presented to the New England Electronic Commerce User Group on April 29, 2009
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problems – markets - responsible
The 3 W’s of Visibility and Demand Management
DevelopmentCorporate
problems – markets - responsibleAfter All These Years Has Your Team Forgotten How to Win?Some Definitions
vis·i·bil·i·ty (vĭz'ə-bĭl'ĭ-tē) n. pl. vis·i·bil·i·ties
•The fact, state, or degree of being visible. •The greatest distance under given weather conditions to which it is possible to see without instrumental assistance.
•The capability of being easily observed: an executive with high visibility. •The capability of providing a clear, unobstructed view:
The American Heritage® Dictionary of the English Language, Fourth EditionCopyright © 2006 by Houghton Mifflin Company.
de⋅mand man·age·ment (mān'ĭj-mənt)
•The term is used to describe the activities of demand forecasting, planning and order fulfillment.
Wikipedia
problems – markets - responsibleAfter All These Years Has Your Team Forgotten How to Win?Aberdeen Says . . .
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
In-house developed software - 50%
Module in our ERP system - 44%
Transportation carrier tracking system - 36%
Visibility system from an electronic messaging vendor (EDI VAN) -…
Visibility system from a freight forwarder - 29%
Visibility system from a 3PL - 26%
Supplier collaboration portal or hub - 23%
Other - 22%
On-premises (license) commercial visibility system - 21%
Commercial transportation management system (TMS) - 20%
On-demand (hosted) commercial visibility system - 15%
Cargo portal - 14%
Supply Chain Visibility On-DemandViktoriya Sadlovska, January 16, 2009
problems – markets - responsibleAfter All These Years Has Your Team Forgotten How to Win?Solution Taxonomy
Behind the Firewall Software Solutions(ERP Module, EDI Translator, B2B Integration Engine,
BPM, Business Intelligence, etc.)
EDI VAN Basic Visibility Services(Descartes, EasyLink, HP-EDS, GXS, Inovis, Kleinschmidt,
Loren Data, SoftShare, Sterling, etc.)
Integrated Order Life Cycle Management Solutions(GXS Order Life Cycle Visibility, Inovis Actionable Intelligence,
Sterling Supply Chain Visibility On Demand, etc.)
B2B SaaS Applications(Descartes Delivery Management Suite, E2Open, Inovis
Chargeback Avoidance, Sterling Order Management, etc.)
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Solution Building Blocks
problems – markets - responsibleAfter All These Years Has Your Team Forgotten How to Win?Behind the Firewall Solutions
Supply Chain Visibility On-DemandViktoriya Sadlovska, January 16, 2009
Behind the Firewall Solutions
Software solutions, running inside your data centers, either internally developed or purchased from a vendor,
that provide visibility and other business process services
Pros• Leverages existing investments
• ERP, BI, B2Bi, BPM, etc.
• Typically a strong fit with your requirements
• Most commonly used solutionin today’s marketplace
Cons• Visibility limited to the ‘edge’ ofyour enterprise
• Often have to re-invent the EDItransactional data cube ‘wheel’
• Applications may impose architectural limitations onyour vision
problems – markets - responsibleAfter All These Years Has Your Team Forgotten How to Win?Behind the Firewall SolutionsEDI VAN Basic Visibility Solutions
Web based tracking, analytics, and visibility solutions that are provided as a core / optional service of a modern
EDI VAN service provider
Pros• Tightly integrated with EDI VAN processing / operations
• Don’t have to ‘re-invent’ the wheel
• You don’t have to develop, maintain, or evolve
Cons• Visibility limited to the ‘edge’ ofyour enterprise & VAN provider
• Restricted to what your VAN offers
• Many organizations have multiple VAN relationships – can’t guarantee one common approach
problems – markets - responsibleAfter All These Years Has Your Team Forgotten How to Win?Behind the Firewall SolutionsIntegrated Order Lifecycle Management
SaaS application built on top of EDI VAN that automates the processing, analysis, and reporting of order lifecycle
events
Pros• Tightly integrated with EDI VAN processing / operations
• Typically provides capabilities for ‘web only’ partners
• Traditional SaaS benefits• Subscription pricing, no software
to install, no hardware to manage, no upgrades to manage, etc.
Cons• Limited ability to truly customizeto meet your requirements
• Getting full participation from allof your trading partners
• Multiple EDI VANs could meanonly partial coverage of tradingcommunity
problems – markets - responsibleB2B SaaS Applications
SaaS/ Cloud Computing applications built to replace traditional licensed software applications
(Order Management, Transportation Management, Inventory Management, Warehouse
Management, Production Scheduling, Supplier On-boarding, etc.)
Pros• State of the art functionality
• Vendors investing in SaaS/Cloud Computing
• Traditional SaaS benefits
• Lower barriers for full trading community participation
Cons• Limited ability to truly customizeto meet your unique requirements
• Mission critical applications’ performance is in somebody else’s hands
• Not a true source of competitive differentiation
problems – markets - responsibleAfter All These Years Has Your Team Forgotten How to Win?Challenge:Not all TPs Are On The Same Network
• Reality of today’s B2Bcommunities
• 5‘hops’ from you to your trading partner• Your ERP to Your Translator• Your Translator to Your VAN mailbox• Your VAN’s Interconnect to TP’s VAN• TP VAN mailbox to TP’s Translator• TP’s Translator to TP’s ERP
Challenge:Mandates Don’t Work Like They Used To
“It would be really nice if you could either directly integrate with my application via XML and our web services, use our cool new web portal, or get a mailbox on our VAN”
Does this chart look uncomfortably familiar?
What Are The Benefits of Visibility?
• On Demand Reporting / Drilldown• “I can find the answer faster”• “Everyone can see the status of everything all the time”
• Alerts• “Tell me when something goes wrong”
• Remediation• “I can fix it before it causes trouble or costs me money”• “Some simple things can get fixed by the system
automatically”
• Problem Avoidance• “I can see consistent patterns of problems I can fix”
Does this chart look uncomfortably familiar?
What Are The Benefits of Demand Management?
• Modern functionality• “Best practices of 2009 versus 1993”• “Web services integration is so much better than RPC calls”
• SaaS Economic & Operational Benefits• “I like paying by the drink instead of buying a pallet’s
worth of stuff I’ll never finish drinking”• “I’ll never do another point level release upgrade that
costs me $750,000 and 6 months to complete”• “I like not waking up in the middle of the night to fix a
production problem affecting the UK operations”
• Higher trading community participation• “The web portal helps automate the 20% of my
community that still uses fax, email, and snail mail”
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Visibility / Demand Management Market Landscape
Some Thought Leaders to Check Out
• Benoit L’Heureux• Frank Kenney• Dwight Klappich
• Bruce Richardson• Dennis Gaughan• Janet Sherlock
• Ray Wang • Ken Vollmer
• Steve Banker • Adrian Gonzalez
DevelopmentCorporate
DevelopmentCorporate is a strategic corporate development advisory firm for enterprise and mid-market technology companies. We assist management teams, board of directors, and investors in updating their merger, acquisition, and divestiture strategies and then we provide tactical support for the implementation of those strategies. We also provide support for strategic initiatives such market assessments, competitive intelligence updates, product/service portfolio analysis, etc.
Email: [email protected]: Musings of a Reformed Private Equity Operator
www.developmentcorporate.com Twitter: @Devcorporate