B2B Integration

It’s Not Easy—Green Banking Continues to Grow

green banking

“It’s not easy being green.”  When this tune started floating around my head for this post, I thought Kermit the Frog had first sung these words about twenty years ago. Imagine my surprise when I checked Wikipedia and found out the song is over forty years old. And what was once a frog’s simple lament about growing comfortable in his own somewhat hunter green skin, has over the years been co-opted by the green movement as a reminder of the difficulties of living green with Kermit’s blessing of course.   So for the purposes of this post, I’m going to focus on the environmental Kermit, my earliest exposure to and hero of the green movement. Kermit the Frog and the Ad Council anti-pollution ad that featured the Crying Native American guy made a big impression on me and I’m not the only one. For many people of my generation, these impressions spurred us to action both then and now. I’ve been an avid recycler for more than a decade but I remember organizing a neighborhood clean-up when I was still watching the Frog on a daily basis. Somehow I think some of the banking decision makers who are helping to implement green initiatives have these same cultural references working in their subconscious too. This fact might help to explain why, despite the economic upheaval, so many financial institutions and banks are moving forward with their green initiatives. Citi announced the opening of a 305,000-square-foot facility to house its computer systems and components in Georgetown, Texas. This facility will employ about 50 people and is only the first step that Citi is taking toward more environmentally friendly data centers. Other organizations are taking similar steps to help eliminate paper waste and reduce their carbon footprint. While it would be great to think that the focus on eco-friendly is only driven by altruism, the truth is that it makes good business sense as well. Let’s take a look at my own employer, which recently formed an alliance with Verizon Business targeting transactions among vendors, partners and customers, and the companies said that by automating annual business-to-business transactions worldwide, estimated at about 40 billion transactions, companies would cut 2.3 billion pounds of CO2, or the equivalent of removing about 200,000 cars of the road for a year. According to the Aberdeen Group, a company that processes 500,000 invoices per year can cut manual process costs by 60 percent or more if automation is implemented. For financial institutions that support wholesale clients, this green trend toward cost savings and streamlined operations can translate into additional capital to fund new growth. Good business return and good press are compelling reasons for any company to go green. More and more banks are “Finding New Opportunity in Green Banking.” And I’d like to think that the little green frog is playing a part in these decisions. What about you? Did Kermit influence you to take some green action? If not Kermit, then who and what type of action are you taking?

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OFTP2, the next big thing in Automotive?

Over the last few years there have been a number of new communications protocols that have been developed but for some reason they all seem to have varying degrees of success with getting any sort of market penetration. At Odette 2008, OFTP version 2 (OFTP2) was discussed in a number of presentations, but will this have anymore luck in the market? In previous posts we discussed the failure of AS3 to get to market. AS3 was touted, quite widely, as the natural successor to AS2, but as discussed it has failed, so far at least, to get widespread market penetration and I know our customers rarely ask if we can provide support for this protocol. So what is next, AS4?, well actually yes…..this was discussed in one of the sessions at Odette, and it looks as if this will become the new standard to be used across the European aerospace industry. Odette thought that it would be interesting for their members to understand what was going on in other industry sectors. So given the similarities between the aerospace and automotive supply chains, Odette invited Dassault Aviation and Boost to present on the work they are doing in the aerospace sector. Boost, the aerospace equivalent of Odette, are driving two standards for this industry, ebXML as the document standard and AS4 as the communications protocol. Now as with AS2 adoption being driven by Walmart in the retail sector, it looks like Boost has got widespread agreement from the likes of Airbus, Dassault and EADS to use AS4 in all aspects of their supply chain communications. So it is early days yet but with this level of industry wide backing it looks like AS4 could be as successful as AS2. So what is happening in the automotive industry at the moment, well, as with AS4 being the shining light of the aerospace industry, OFTP2 is seen as the next big thing to help communications across the automotive supply chains, particularly in Europe. OFTP2 was initially discussed at the Odette show in Munich 2 years ago and it had a number of key features that would almost guarantee high adoption levels in the automotive industry. It uses the internet for file / document transfer, it uses a combination of digital certificates and file encryption to ensure that files are secured during transmission and more importantly it would allow the exchange or transfer of very large files easily and efficiently. Two years later, and at the Odette show in Strasbourg there were a couple of sessions where OEMs presented their experiences of using the new communications protocol. However a number of OEMs had successfully tested OFTP2 but no one has yet to put it into full production. The aim of OFTP2 was to try and develop a single, global standard that could be used for batch file transfer across the internet. There are currently eight software products that have been fully OFTP2 certified. In France, PSA is currently in production testing, in particular to link with their plants in Eastern Europe. In Germany, BMW are also in production testing, meanwhile Daimler and VW are currently in the initial pilot project phase. In Sweden, Volvo and Scania will be starting pilot projects in 2009 and finally in Japan two trading partners will start testing OFTP2 before the end of this year. During the OFTP2 testing process a number of issues have been highlighted which could explain the relatively slow roll out of this protocol. For example In order to encrypt and compress the large files, companies have had to upgrade their computers to be able to do these tasks in a timely manner, the exchange of certificates needs to be better managed and integration of OFTP2 with internal OEM security procedures has been a complicated process. This is especially important when trying to exchange sensitive data on a car design for example. This session did highlight a benchmark test that had been carried out for transferring a 100Mb file.  Via ISDN over a 64kb/s line took 300 minutes. Via ENX over a 2MB/s line the file took 13.6 minutes and finally with OFTP2 over an 8Mb line across the internet took only 2.3 minutes. This is a significant improvement, but of course there are a number of issues, as highlighted above, which need to be addressed first before this rate of transfer can be achieved. ENX has been used as a private network by the European automotive industry for many years and this organization were not convinced that OFTP2 would be successful, partly due to the fact that it may take business away form them. Odette on the other hand see OFTP2 as being complimentary to ENX, in the same way that web portals could be considered complimentary to EDI. It remains to be seen how successful OFTP2 will become but it certainly has the technical features to be one of the better communication protocols on the market. As with AS2 being successful via the ‘Walmart effect’ and AS4 potentially being a success due to the ‘Airbus effect’, hopefully with major European OEM adoption, OFTP2 can become a success as well. Time will tell I guess and hopefully by the time of next year’s Odette show we will hear about some live implementations of OFTP2 and with the help of other industry associations such as AIAG in North America and JAMA in Japan, OFTP2 could easily become the new global communications standard for the automotive industry.

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The Long Tail Phenomenon in B2B – For Better or Worse?

Someone recently asked me – Is the long tail phenomenon in B2B making e-commerce better or worse?  There is no question that the exponential rise in the number of standards… read more → The post The Long Tail Phenomenon in B2B – For Better or Worse? appeared first on All About B2B.

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Green Coffee XML and the Long Tail


The Green Coffee Association’s XML standard offers an excellent example of the Long Tail of B2B Standards. The standard automates a highly specialized set of business processes within a niche industry subsector. Tremendous benefits can be derived from market participants as a result of the flexibility offered from the wide variety of tendering, payment, pricing and performance management terms that can be modeled in the XML.  Such benefits would not be practically achievable with a more generalized standard such as EDI.  Benefits of Green Coffee XML Lower Days Sales Outstanding (DSOs) for sellers of coffee bean products are achieved by creating an electronic audit trail of commercial transactions that reduces the likelihood of post-shipment quality and invoicing disputes Improved Order Fulfillment rates are accomplished by routing contracts directly from buyer procurement applications to seller order management systems thereby obviating the need for error-prone, human interactions Reduced Total Landed Costs for transportation are realized by standardizing and digitizing the import and export processes that often delay shipments at international borders and result in unexpected penalties or fines Challenges of Green Coffee XML Specialized e-commerce standards such as Green Coffee XML offer unparalleled levels of automation and efficiency within a particular market sub-segment. However, such niche XML standards create challenges for market participants whose core business utilizes a different e-commerce framework. Green Coffee XML offers an all-inclusive solution for the agricultural businesses that grow the coffee beans and the specialized brokers who act as middlemen in sales transactions. However, the standards complicate e-commerce scenarios for other market participants such as consumer products manufacturers, food service retailers, government trade ministries, transportation providers, commercial insurer and banking institutions. Consumer Products Manufacturers Brand owners such as Kraft and P&G who purchase large quantities of green coffee beans can benefit from the GCA standards during procurement processes. However, Green Coffee XML is not the only standard utilized by consumer products manufacturers. Other non-coffee suppliers of ingredients, raw materials or packaging materials are adopting the GUSI XML standards. Retail customers expect their suppliers to exchange information in the EDI document standard via AS2 Internet transmission protocols. Furthermore, retailers expect product branding, pricing, packaging, promotion, taxation and regulatory data to be transmitted using the Global Data Synchronization (GDS) standards. A wealth of information about coffee bean quality can be exchanged using GCA XML, but the data must be transformed into GDS XML formats for distribution to downstream retailers. Banking Institutions Financial institutions provide risk mitigation and working capital solutions to coffee buyers and sellers. Examples include letters of credit and post-export supply chain finance. Cost effective and timely processing of such services requires electronic communication with the buyer and seller. Consequently, banks engaged in coffee-related transactions must either embrace the GCA XML standards or develop a process for mapping data to and from their own preferred standards. Financial institutions utilize the SWIFT FIN MT standards for international trade processing. Additionally, a new set of Trade Services Utility (TSU) standards are being developed for supply chain finance. Transportation Vendors Ocean, rail and ground freight carriers as well as third party logistics providers offer a variety of transportation, warehousing, freight forwarding and customs clearing services to buyers and sellers of coffee products. The cost-effective and timely processing of coffee-related shipments necessitates electronic communications between buyers, sellers and government trade ministries. Consequently, transportation vendors engaged in coffee-related shipments must either embrace the GCA XML standards or develop a process for mapping data to and from their own preferred standards.  Transportation providers utilize higher volumes of EDI than any other e-commerce standard. However, due to the broad range of industries serviced by logistics providers, a myriad of standards including AS2, RosettaNet, Odette, STAR and OAG are being embraced by transportation vendors.  The emerging multi-standard model in the transportation industry is customer-friendly, but costly and complex for the carriers who must manage highly customized e-commerce infrastructures.  Similar challenges exist for other trading partners involved in coffee-related transactions: Government Trade Ministries They are charged with monitoring the import and export of coffee products across their borders. Imports and exports must be properly classified to ensure the appropriate taxation of goods. Incomplete or inaccurate documentation will result in delayed processing and financial penalties to either the buyer or supplier. To expedite trade processing, governments support electronic interfaces with importers and exporters of goods. However, government ministries focus e-commerce capabilities on broader, industry-neutral standards such as EDI or ebXML. Such an approach creates challenges for long tail standards adopters such as Green Coffee bean buyers and sellers. Commercial Insurers They offer policies that compensate the buyer or seller of a coffee-related transaction for losses, damages or theft that occurs during the transportation of goods from origin to destination. Such losses might occur from inclement weather, collisions, stranding, pirates or acts of war. Damages might be caused by seawater, fire, smoke or chemical contact with the coffee goods. Insurers require documentation of the shipment contents and value in order to underwrite a marine coverage policy.  To expedite the processing of the policy, insurers offer electronic interfaces to submit documents such as shipment advices, bills of lading and packing lists. Similarly, insurers can distribute insurance certificates electronically to a buyer, seller, shipper or banker facilitating the trade. Insurers utilize specialized standards to support underwriting, policy rating, claims processing and customer billing processes. For example, the ACORD standards offer a highly specialized set of transactions designed to orchestrate insurance transactions. Both ANSI X12 EDI and EDIFACT offer insurance document sets as well. Varying standards between insurers and their customers creates challenges for all parties. Green Coffee XML offers tremendous return on investment and unparalleled levels of efficiency for producers and brokers of coffee. However, the value proposition becomes substantially diluted for other market participants with core businesses that utilize alternative e-commerce frameworks. Consequently, there are tradeoffs to be considered when evaluating whether to adopt specialized, industry sub-sector level e-commerce standards or to rely on less robust, but more highly adopted standards such as EDI.  As cross-industry trade continues to grow, there will be an increasing level of tension between competing e-commerce frameworks.

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What can Dominos Pizza Teach us About Supply Chain Visibility?

supply chain visibility

Last weekend we had some friends over to visit our house and rather than cooking we decided to place an order for pizza delivery from Dominos. Ordering a pizza today is amazingly convenient. We didn’t even have to pick up the phone. Instead we placed the pizza delivery order online using the Dominos web site and a credit card. The fact that you can order a pizza online should probably come as little surprise in today’s increasingly Internet-centric world. What did surprise me, however, was the new Domino’s Pizza Tracker site that provides you a step-by-step update on the status of your order. Using the phone number that you used to place the order you can login to a graphical interface that monitors the progress of your delivery. The web site also displays the street address of your delivery, the complete contents of your purchase and the exact time of your order. The tracker shows five different steps throughout the food preparation and delivery process: Order placement Food preparation Baking Boxing and packaging Delivery en route My tracker even told me the name of the driver who was coming to our house! All that was missing was a link to the driver’s MySpace page so you could learn more about he or she before they arrived…. Dominos launched this new tracker service on January 30th. I am not sure exactly how it works, but the system somehow ties the local operations systems in each store to the B2C web site on a real time basis. One thing I will bet on is that it doesn’t use RFID. The tracker site is one of the more customer friendly web experiences that I have seen in recent years. In fact, there is even a survey that consumers can fill out after the delivery to comment on their experience. So as I ate my pizza I started thinking about the idea of providing customers real time visibility into the status of their orders. And I began to relate this to some of the customer visits I have conducted recently with multi-national corporations in the automotive, high tech and retail industries. One thing that I am consistently surprised by is how little visibility many of the largest companies have to inventory moving through their supply chains. Most of the order management portals large manufacturers provide their customers don’t come anywhere close to the supply chain visibility that Dominos offers its consumers. So I ask you – if the average Dominos franchise with an employee base of 10 and annual revenues of $580K can notify me of the exact time that a pizza is boxed and taken out the door for delivery, why can’t a multi-billion dollar manufacturer of airplane parts be able to tell their customers when a $50M shipment of goods has arrived at a port and cleared US customs? The good news is that many manufacturing leaders seem to be recognizing the challenges associated with lack of supply chain visibility. We have seen a recent surge in interest amongst large manufacturers seeking to provide their key distributors and customers with better visibility to outbound shipments. The highest concentration of demand seems to be with industrial goods manufacturers who are seeking better quality data on ocean freight traversing long distance trans-Pacific routes. Consumer products companies are slightly ahead of their peers in the automotive, high tech, aerospace and industrial machinery sectors when it comes to supply chain visibility. In the industrial sector, it is not uncommon to find that neither buyer nor supplier has visibility to the location and status of shipments of goods once they leave the manufacturing plant. Interestingly, this situation applies even to high value goods including consumer electronics such as high definition plasma televisions, kitchen appliances such as refrigerators and computing equipment such as robotic tape backup libraries. Not only are these expensive goods targets for theft and counterfeiting, but many of them can be easily damaged without proper handling. Due to the value of the goods, suppliers often purchase cargo insurance to protect against these types of threats. Also due to the value of the goods, many suppliers seek out third party financing for their inventory in transit. The financing frees up working capital that would otherwise be tied up in long distance supply chains. So the point here is that we have multi-million dollar shipments of industrial goods insured and financed by third parties and no one other than the transportation provider holding the actual inventory seems to know the location at any point in time. Should industrial manufacturers hire pizza delivery persons to help them?  That is probably unnecessary. But they should consider investing further in transportation management applications, particularly in logistics visibility suites that offer customers insights into the status of inbound freight.

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The Long Tail of B2B Standards

B2B standards

In July 2006 Chris Anderson published a book called The Long Tail which illustrated how new Internet business models from pioneers such as amazon.com, Netflix and Apple have enabled an entirely new economic model for the media and entertainment industry. Even if you have not read the book, you are probably familiar with the concept.  Traditional mass market economics have led to product strategies focused on developing the few blockbuster “hits” that appeal to the mass market.  Niche products with smaller target markets were generally not stocked in stores, played on radio stations or featured in movie theatres due to the lack of a profitable distribution model. Chris Anderson states that in the traditional brick and mortar retail model, selection was limited by the “tyranny of the lowest-common-denominator.”  In other words, historically selection was driven by economics rather than actual end-user demand.  For example: “Wal-Mart must sell at least 100,000 copies of a CD to cover its retail overhead and make a sufficient profit; less than 1 percent of CDs do that kind of volume.” “An average movie theatre will not show a film unless it can attract at least 1500 people over a two-week run, that’s essentially the rent for a screen.” In The Long Tail Anderson proposes that entertainment industry is shifting away from the traditional mass-market model towards a broader market of niche-oriented, micro-segments. The change is made possible by the unlimited selection of books, movies and music available through Internet channels. Chris explained that the Long Tail phenomenon is not limited to just the Media & Entertainment sector, but can also be observed in the retail market with eBay; the manufacturing industry with KitchenAid; the advertising sector with Google and the software segment with Salesforce.com. The Long Tail Concept Applied to B2B I believe that a long tail effect also has developed in the B2B standards community. During the early history of B2B in the 1980s and 1990s, EDI was the dominant standard. There were several variants of EDI utilized in different geographies, most notably ANSI X12 in North America and UN/EDIFACT in Europe and Asia. Adoption of B2B was concentrated primarily amongst the largest of companies. And data exchange was limited to the use of third party VANs (value added networks) whose applications only supported EDI. The immaturity of technology and limited market combined to create economics discouraging the development of alternative standards. In many respects, the B2B e-commerce ecosystem suffered from “the tyranny of the lowest-common-denominator effect” throughout the first two decades of standards. In the late 1990s, the Internet began to enjoy widespread adoption. With the Internet, the economics and technology paradigms for B2B fundamentally changed. Documents could be exchanged using Internet protocols such as SMTP, FTP and HTTP liberating B2B from the traditional private networking models. XML was created offering unparalleled flexibility to model new transaction types and business processes. New groups of non-profit organizations (Dot Orgs) were formed with the goal of developing a successor to EDI.  Together these Dot Orgs have introduced dozens of new XML-based standards designed to meet the specialized needs of industry subsectors. Examples of the new standards include PIDX in the Oil & Gas market, CIDX in the chemicals industry, SPEC2000 in the aerospace sector, RosettaNet in the high tech industry, GUSI in the consumer products sector and papiNet in the forestry market. The new XML standards offer a level industry specialization and technology flexibility not possible with traditional EDI. However, the new XML standards have failed to achieve critical mass. Over 80% of B2B transactions remain EDI-based. There are a number of Darwinian arguments that could be made about EDI’s ability to fend off multiple targeted attempts to eliminate it. XML, with its genetically superior framework, has yet to achieve significant adoption beyond 10% of the target industry segment. As a result, the state of the market for adoption of B2B e-commerce standards can be represented in a long tail diagram. Open Office XML is quickly gaining adoption as Microsoft’s Office 2007 is deployed to more and more desktops. However, all of the other standards remain confined to niches used by only a subset of the targeted community, but each with aspirations of migrating up the tail to become a short head player. I believe that we will see a rapid transformation in the adoption of B2B standards in the coming five years. More and more industries will migrate from using EDI (the lowest-common-denominator, short head) standards towards industry specific XML (the highly specialized, industry-specific long tail) standards. There are four major transformational catalysts that are emerging to offer the potential to change the economics of standards for ever. In upcoming posts I will outline these forces and the evolution of the Long Tail of B2B Standards in greater detail…

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Battle of the Supply Chains

supply chain

One of the industry associations we have been working with recently is the Global Supply Chain Forum sponsored by Stanford University. The forum is comprised of representatives from many of the world’s largest manufacturing companies as well as some of Stanford’s leading faculty such as supply chain thought leader Dr. Hau Lee. Dr. Lee has introduced a number of revolutionary ideas over the past few years, but there is one particular insight that stands out in my mind: “Instead of company-to-company competition, we are now in an era of supply chain-to-supply chain competition.” This is a concept that I think becomes more and more critical every day that goes by. To illustrate my point, let us examine the high tech industry as an example. More specifically, consider the sub-sector of high tech that manufactures computers and related peripherals. This is a relatively young sector that was first started back in the 1960s and 1970s. However, during its short history the supply chain model has undergone a radical transformation. Mainframe Value Chain When the first mainframes were introduced a single vendor often functioned as the sole source for all computing needs. OEMs such as IBM and Honeywell manufactured not only the finished mainframe product, but most of the components as well including the memory, storage (DASD) and processors. The operating system, database and even some applications were developed by the same vendor who manufactured the hardware. If the mainframe broke or needed an upgrade, the hardware OEM provided the repair and service. 2008 PC Value Chain Contrast the mainframe model to the complex, multi-tiered value chain in today’s computer industry. I work on an “IBM Thinkpad.” However, while the logo on my laptop says IBM, the manufacturer of the machine is actually a Chinese company – Lenovo. Although Lenovo is the OEM, it only contributes a small fraction of the content of the laptop. The components inside the laptop are sourced from third party suppliers (Kingston for memory; Seagate for storage; Intel for microprocessors). Also noteworthy is the fact that Lenovo does not typically sell the machine directly to end users. My laptop was purchased through our company’s preferred distributor – CDW. The software on the machine is made by another group of specialized companies. Microsoft publishes the Windows operating system and Office application suite. Other software vendors such as Adobe, Symantec and Apple provide other applications such as document viewing, desktop security and digital music. And when my laptop breaks, who do I call? Not Lenovo, but a third party such as a high tech distributor, third party logistics provider or a contract manufacturer for warranty support and epair. The point here is that the computer industry has migrated from a vertically integrated model to a highly specialized, heavily outsourced model. This type of highly outsourced model in which OEMs outsource much of the manufacturing and supply chain management to suppliers is growing more common in all discrete manufacturing sectors. Examples can be found not only in high tech, but also aerospace, automotive, consumer products and industrial equipment. Supply Chain versus Supply Chain The key take-away from the discussion above is that OEM manufacturers are increasingly dependent upon a community of outsourcing partners to achieve success. Factors that can go wrong (and do go wrong) are, in many cases, completely out of the control of the OEM. In these new value chain models, companies are actually not competing with other companies, but instead their supply chains are competing with other supply chains. This crucial concept, first introduced by Dr. Lee, is critical for channel masters in today’s supply chain to understand. However, while it may seem obvious, the majority of today’s leading retailers and manufacturers continue to structure models that prioritize the near-term financial performance of their own company above the overall long-term competitiveness of their supply chains. The term “partner” continues to be utilized ever more frequently to describe suppliers in a value chain. However, the approach of most channel masters remains more adversarial than collaborative. The largest exception is, of course, the Japanese manufacturing community which has structured itself around kereitsu relationships between OEMs and key suppliers. Consider the following “company centric” paradigms that are becoming more commonplace in today’s supply chains. Performance Scorecards and Penalties – Retailers and manufacturing OEMs have instituted elaborate chargeback mechanisms that penalize suppliers for problems arising during routine order fulfillment. Not only are these penalties designed with the goal of optimizing the buyer’s business processes, but each retailer and manufacturer has different measurement criteria. As a result, suppliers are forced to comply with terms such as delivering during tightly monitored 2-hour receiving windows and labeling of pallets with customer-specific serialized barcodes and text. While these processes simplify receiving for the buyer, they add cost and complexity for the supplier and friction to the overall relationship. Open Account – Large buyers are moving from their traditional letter of credit processes with overseas suppliers towards open account models. The goal of the migration is to reduce banking fees for the buyer, but in many cases the side-effects to suppliers are significant. Without a bank-guaranteed letter of credit to use as collateral for short term financing, suppliers struggle to fund raw materials purchases, manufacturing plant payrolls and other operating expenses. Extended Payment Terms – In an effort to hold on to cash longer, buyers are extending payment terms with suppliers to periods of 60 or 90 days. Extended terms create a cash flow issue for suppliers who must now seek out short term loans to fund their operations. For smaller suppliers with lower credit ratings, these expensive short term loans compromise profit margins and increase the overall cost of goods sold. Vendor Managed Inventory – More and more customers are looking for their suppliers (or a third party) to hold title for inventory until the point of consumption or sale to the end-customer. Buyers prefer these types of models as they shift the inventory carrying costs to the supplier’s balance sheet along with the risk of product obsolescence and retail shrinkage. For high volume channels, large suppliers can benefit from the added demand visibility and end-customer insights available through a VMI program. However, for many buyer-supplier relationships the risks and costs are heavily unbalanced in favor of the customer. What do suppliers as valued partners in the relationship receive in exchange for these terms? Buyers will offer appealing terms to suppliers willing to engage in customer centric business processes: Greater share of a customer’s wallet as the supplier becomes the preferred vendor for a particular product line Broader scope of services that may include many value added services that increase the average revenue per unit sold Suppliers must weigh the pros and cons of such arrangements to determine their best strategy.  Often the tradeoff is a choice between revenues and profitability. What are the EDInomics of supply chain to supply chain competition? B2B integration technology can be the key to unlocking the potential of collaborative relationships in a value chain.  B2B can be used to enable a variety of strategies such as multi-echelon demand visibility, collaborative product development and third party supply chain finance. But the technology is rendered ineffective unless the channel master in a relationship has a long-term, supply-chain wide perspective on their activities. Unhealthy suppliers introduce performance drag, cost overhead and higher risks to the overall supply chain.  While these factors may not be visible in the buyer’s next quarterly income statement, they will most certainly define the long term success of the buyer. After all, as Dr. Lee states “The weakest link in the supply chain defines the supply chain.”

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