Supply Chain Brain

Supply Chain e-Business

— April, 2001

A Slew of Services

By Michael Lear-Olimpi, Contributing Editor

Supply-chain managers have many options in today’s e-commerce environment. Some are routine, others are developing — but they’re all features that can help keep product moving and the bottom line firm.

The speed-of-light e-commerce world is far ahead of the sluggish bricks-and-mortar realm in many ways. Supply-chain managers, for instance, can point their browsers nearly anywhere and package, insure, ship and track goods. They can procure and produce, replenish and return, collaborate and consolidate. They can secure customs-brokerage services, freight payment, shipment arrival times, road and weather conditions through which planes, trains, ships and trucks must travel — all from one place, and with an alacrity unimagined at the unwired loading dock, jetway, marine terminal or warehouse.

And the array of services they demand — from risk-management to auctions to call-center support to logistics functions — are being offered by a plethora of web-based companies.One element of that one-stop shopping, however, stands out.

“They want visibility of their supply chain,” says Donald Maltby, president of Hub Group Inc.’s e-commerce division, Hub Online.

Hub (www.hubgroup.com) is the Lombard, Illinois, company that offers a variety of intermodal and other transportation services. Offerings include shipment tracking, price quotes and order tendering. Carriers get automatic load tenders over the Internet. Maltby says that in the near future, HubOnline users will be able to see and retrieve documents. Carriers will also have access to Hub’s considerable load-matching services are on the way, according to the Web site.

“As for tracking capability, you need it with a predictive type of modeling — not just tracking capability for the sake of it,” Maltby adds. “We’ve put traffic predictability into the equation. We can predict when a truck will be in a slot.”

Customers also want such features as exception-based alerts — which units are in distress — based on their individual business rules, Maltby says. Portability and ability to manipulate information are important, too.

“Customers want to be able to download the information so that they can get reports,” Maltby says. “Reporting is part of it. This is all a web-enabled product. A customer can come onto our site and get it.”

Insurance — being able to enhance coverages on loads — and other financial options, such as payment, and security are also important services.

Dino Moler, the new president and chief executive officer of Remington, Indiana, based GoLogistics.com (www.gologistics.com), agrees.

“I want visibility of my environment,” he says of what he would seek as a customer of an electronic logistics network.



	“We see the supply chain shifting earlier in the product value chain.” — John Bruggeman, Alventive

GoLogistics.com is an internet marketplace — primarily an exchange powered by Ariba — that connects shippers via software with less-than-truckload (LTL) carriers to place loads over 5,000 pounds by buying excess capacity as needed. The service precertifies carriers and provides shippers with information on carriers that will help save money. GoLogistics says in its web-site descriptions that the exchange also helps LTL operators cut empty line haulage with visibility to freight that until such web exchanges operated moved by truckload, private fleets or on specialty carriers.

But users want to do more than match loads. Here’s what e-services Moler says he’d want if he were a customer Windows shopping in the internet marketplace.

“Settlement, claims processing,” Moler, who was previously with ICON Transportation Co., NTE and Ryder, says. “And I’d want the ability to participate without a lot of effort. I’d want trustworthiness. I’d also want that high visibility of my environment, and of a many-to-many-model — with an algorithm narrowing my choices.”

New models
John Bruggeman, vice president of marketing at Alventive, based in Santa Clara, Calif., notes that communication is also a key e-business service that customers want.
“They want to be able to select collaborators, track collaboration and set up message capability,” Bruggeman says.

Alventive (www.alventive.com) is a new twist in supply-chain visibility. Executives there use the term c-commerce, or collaborative commerce, which the company says on its attractive, user-friendly web is the “next generation of e-commerce.” The company’s products allow partners to participate in the design and marketing of commodities.

“We see the supply chain shifting earlier in the product value chain,” Bruggeman says. “They ask, ‘How can I own a greater part of the product-marketing phase?’”

Answer: In part, through a network like Alventive, in which engineers and other players in the supply chain can see problems before they materialize in products or facilities.

“Now the supply chain is getting involved at the design stage,” Bruggeman notes. “Seventy to 80 percent of product costs are fixed at the point of product definition. Now there are collaborative design solutions that let relevant parties get involved before the product is fixed.”

He uses the semiconductor industry as an example. Manufacturers have access to personal-computer (PC) board selection. Purchasing is available for chip selection. Engineers can change blueprints, suppliers can suggest better parts and customers can comment on designs before prototypes hit the market. It adds up to shorter design cycles, fewer changes and mistakes and smoother delivery to market. All told, those elements mean savings, and profits.

“Everyone just looks at their browser to view a PC board,” he says. “Alventive breaks down the barrier that prohibits organizations from participating in the design process.”

Metreo (www.metreo.com), Palo Alto, Calif., is another player offering communications clarity and speed to supply-chain partners, particularly in procurement, which is a major area of e-commerce.

“Many of the first-generation e-business solutions have either focused on the buy side (creating and distributing an electronic purchase order) or driving efficiency in the production of materials,” President and CEO Daphne Carmeli says. “However, this is not enough for suppliers.”

Instead, she says, suppliers — typically margin based-businesses — must respond quickly to quotes and orders. They also must be able to make a profit on each deal.
“We can all agree that the old saying ‘We’ll make it up at the end of the quarter’ is just that — an old saying,” Carmeli says.

To help improve suppliers’ margins, Metreo offers its enterprise software, Metreo SR2 Supplier Response. The package tells suppliers when and how to respond to quotes. It also orders. This methodology helps ensure that buyers will accept the most profitable offers. According to the company’s web site, Metreo’s answer to supply-chain challenges can route inbound requests, and evaluate, rank and score them against variables. It then recommends price trades and sales options that help keep suppliers’ bottom line firm.

This type of information sharing is coming into its own, says Karen Peterson, an analyst with Gartner Group, Stamford, Conn. Peterson points out, too, that although transportation exchanges and marketplaces are relatively mature, some multifaceted electronic supply-chain relationships are developing.

“Companies are kind of experimenting with how much information to share, how do they share it, what’s the best way to share that information,” Peterson says. “But it’s all around sharing information. Before, I went in and called someone, or maybe I had EDI and maybe I shared processes with my trading partners. We’re starting to see some pilots, especially in high-tech, even down to the component level.”

Peterson points out that some network collaboration processes include finance, “but that’s younger — it’s not yet mature.”

Demand planning is being offered as an e-service, Peterson says, along with financial functions, but she says that those offerings are younger than offerings in transportation. The high-tech industry, she says, such as the semiconductor market, is trying pilot exchanges and collaborative networks.