EDI

How B2B Automation Helps to Develop Greener Supply Chains

green banking

Developing a greener and more sustainable supply chain has been on the agenda of CEOs for many years and in fact just looking back through my archive of blogs that I have written over the years, the first green related blog that I wrote was in 2007. This was at a time when companies were being made to think more carefully about how they design their supply chains to help reduce carbon emissions. Back then, our company issued supply chain sustainability assessments to demonstrate how much greener a business would become by automating their manual B2B transactions by sending them electronically across our global B2B network, Trading Grid. Even though sustainability has pretty much become engrained within every CEO’s corporate agenda now, I just thought it would be useful to remind you of the benefits of B2B automation. Using a very smart website developed by the Environmental Paper Network, a coalition of over 100 non-profit organizations working towards the sustainable production and consumption of pulp and paper, it is possible to calculate the environmental savings that can be made by removing paper based transactions from a business. Each transaction would use the same size piece of paper, ie an invoice, purchase order etc and each electronic transaction equates to 2 pieces of paper. Rather than having an exhaustive maths lesson on how I derived the figures below, I have merely highlighted the key figures for each of the two scenarios, but I can provide evidence of my calculations if you need it 🙂 Scenario 1 – a manufacturing company currently processes 1 million invoices per year across their European based supply chain. Using the criteria above, this then equates to a total paper weight of 9 metric tons or the equivalent of 228 trees. Now by automating these 1 million paper based transactions via a B2B network such as Trading Grid, it will provide the following reduction in the company’s impact on the environment. Reduction in Net Energy Used The Paper Calculator includes an energy credit for energy that is created by burning paper – or the methane that decomposing paper creates – at the end of its life. The Net Energy takes the total amount of energy required to make the paper over its life cycle, and subtracts this energy credit. If most of the energy used to make the paper is purchased, then the energy credit might make the Net Energy lower than the Purchased Energy. The average U.S. household uses 91 million BTUs of energy in a year. – Scenario 1 saves 375 million BTU’s, the equivalent of about 4 homes/year Reduction in Greenhouse Gas Emissions Greenhouse gases, including carbon dioxide (CO2) from burning fossil fuels and methane from paper decomposing in landfills, contribute to climate change by trapping energy from the sun in the earth’s atmosphere. The unit of measure is CO2 equivalents. The average car emits 11,013 pounds of CO2 in a year. – Scenario 1 saves 55,877 pounds CO2 equiv., the equivalent of about 5 cars/year Reduction in Water Consumption Water Consumption measures the amount of process and cooling water that is consumed or degraded throughout the life cycle of the paper product. The largest components of water consumption come from the production of purchased electricity, and the use of process and cooling water at pulp and paper mills. Water volume indicates both the amount of fresh water needed and the potential impact of discharges on the receiving waters. 1 Olympic-sized swimming pool holds 660,430 gallons. – Scenario 1 saves 186,117 gallons, the equivalent of < 1 swimming pool Reduction in Solid Waste Includes sludge and other wastes generated during pulp and paper manufacturing and used paper disposed of in landfills and incinerators. 1 fully loaded garbage truck weighs an average 28,000 pounds (based on a rear-loader residential garbage truck) – Scenario 1 saves 22,215 pounds, the equivalent of < 1 garbage truck/year Scenario 2 – OpenText Trading Grid, the world’s largest cloud based B2B network, connects over 600,000 businesses and processes over 16 billion transactions per year. So assuming we are removing the equivalent number of pieces of paper from a supply chain this would equate to a total paper weight saving of 145,151 metric tons or the equivalent of 3,647,010 trees per year. I think you will agree these numbers are quite astounding, but let’s look at the environmental impact for the equivalent paper based transactions: Reduction in Net Energy Used – Scenario 2 saves 6,008,526 million BTU’s, the equivalent of about 66,022 homes/year Reduction in Greenhouse Gas Emissions – Scenario 2 saves 894,034,654 pounds CO2 equiv., the equivalent of about 81,175 cars/year Reduction in Water Consumption – Scenario 2 saves 2,997,875,351 gallons, the equivalent of about 4,511 swimming pools Reduction in Solid Waste – Scenario 2 saves 355,449,950 pounds, the equivalent of about 12,701 >garbage trucks/year So as you can see, the numbers speak for themselves, automating supply chain based transactions can help your business to develop a greener and more sustainable supply chain. In my next blog I will discuss how moving from software to a cloud based B2B environment can help to develop greener supply chains.

Read More

How Today’s Engineers are Embracing a Virtualized Digital First World

In today’s digital first world, companies face a continuous challenge to ensure that mission critical business information can be accessed anytime, anyplace or anywhere. In order to access digital information, IT infrastructures must cater for a variety of computing platforms with varying levels of performance, mobility and graphics capabilities. In an earlier blog article I discussed how the distribution of digital information has slowly become more pervasive across the manufacturing business. I highlighted how traditionally the design department of a manufacturing company was seen as the early adopter of new technologies. Design based information is typically large in file size and is graphically intensive with real-time rendering being required to visualize 3D product related designs. This presents a challenge when trying to view large 3D CAD models across different hardware platforms. Over the years, as technology has advanced, more and more departments have been able to access digital information in different ways and this has introduced a number of challenges: Ensuring the security of information so as to avoid unexpected security leaks Providing a way to adhere to regional data sovereignty laws so that information can be retained in-country or in-region Deciding whether digital information should reside on a behind-the-firewall server infrastructure which is only accessible via a VPN connection or hosted in a cloud-based infrastructure for greater accessibility Driving a balance between application performance and IT infrastructure costs to ensure that applications are available 24/7 and the business is not impacted due to a network outage or slow connectivity to remote users of network resources Making certain that engineering-based users, irrespective of location, have access to design-based applications and there is no lag in performance of the applications used, especially when manipulating complex 3D graphics When I started working for one of the leading CAD/CAM software vendors in the early 1990s, all design-based applications were hosted on UNIX workstations, at that time a mix of Silicon Graphics, DEC Digital, HP, Sun Microsystems and IBM machines. Fortunately my company had very good relationships with the hardware vendors and we were able to get the latest workstations for demonstration purposes. Our 3D graphics based applications at that time were ideal for showing off the performance of the UNIX workstations. However from a customer point of view, these workstations were very expensive and unless you were the size of company such as Ford, Boeing or Caterpillar, then it was difficult to get access to sensibly specified UNIX workstations for running CAD/CAM applications. Over the last twenty years, PC-based workstation technology began to improve exponentially and some of the larger discrete manufacturers started to make the shift towards PC-based hardware solutions; and this had a knock on effect with the UNIX market. Coming from the EDI side of OpenText’s business, I know the importance of some of the more ‘mature’ technologies. Companies will not stop using EDI and other mature technologies because they offer benefits that no other technology can offer in the market and the same can be said of UNIX workstations. Over the years I have seen a split in the market. Automotive, aerospace and heavy industrial companies have been using Product Lifecycle Management (PLM) solutions from PTC, Dassault and Siemens and are today running these applications on highly specified PC-based platforms. However in the high tech and energy sectors, particularly oil and gas, there is still a very heavy dependence on using UNIX-based workstations, especially in a virtualized environment. But why is there a difference in UNIX versus PC usage between these different industries? Typically in the automotive, aerospace and industrial sectors, manufacturers will produce complex 3D models of their final products. These 3D models are being used for downstream manufacturing processes such as CNC machining or 3D printing and other business processes such as marketing. The products manufactured in these industries lend well to being viewed in multi-platform viewing tools, for example taking a customer on a virtual tour of their new car, simply by using fly through viewing technology on an Apple iPad. Manufacturers can use PLM technology to build complete virtual models of their products and in addition to manufacturing and marketing, this digital information can be used for real-time simulations and even for through-life service and support applications. A whole eco-system has evolved to support these particular PLM solutions in PC-based environments. One of the reasons for this is due to the customer need to access digital information about a product through any type of platform, from PCs, tablets and all the way through to smartphone devices. By comparison, the high tech industry uses Electronic Design Automation (EDA) tools to design the circuity on their silicon chips. Running simulations is another common requirement across semi-conductor manufacturers, being able to test circuit designs and ensure that chips are operating per their intended design parameters. Both of these design related processes require high powered workstations to complete the work in a timely manner. The oil and gas industry also performs numerous different types of simulations with analysis of ‘seismic surveys’ being one of the most common. Being able to analyse seismic surveys to construct 3D models of rock formations in near real time to help identify potential pockets of oil and gas can significantly speed up the overall exploration process. But how can remote UNIX users ensure that they can get un-interrupted access to networked UNIX resources in order to run such simulation processes? In another scenario, what if Shell for example was working with external design partners such as Halliburton on a new oil processing plant and these partners needed joint access to 3D design information? What if the design partner did not have access to UNIX workstations, let alone the design applications to open up the 3D CAD models? Today’s design environments are truly collaborative in nature and this is why a virtualized UNIX environment offers many benefits for companies operating in the high tech and oil and gas sectors. UNIX workstations have long been regarded as the design automation workhorse of these industries which is why today; UNIX workstations are still being used extensively in these particular industry sectors. There is another reason why UNIX workstations are so popular in the oil and gas sector. This sector has traditionally retained staff for a long period of time and many design staff will have been in the industry when UNIX workstations started to take over from mainframe-based environments in the late 1980s. However energy and high tech companies face another challenge when compared with their peer companies in the discrete manufacturing sectors mentioned above, the flexibility that PC-based platforms have over UNIX. But there is a solution which I will discuss in a moment. Over the last twenty years manufacturers have globalized their operations to support their customers, entering new markets such as China or India. They would typically establish new manufacturing plants and in some cases establish regional design offices to support local customer needs. For example in China the consumer typically prefers to be driven rather than drive the cars themselves. Many car manufacturers have setup remote design offices in China, requiring them to buy high-end, PC-based workstations and PLM design software licenses to run on those PC workstations. So this is great news for the discrete manufacturer who can scale up their design function quite easily by adding more PCs to their network infrastructure, but what about the semi-conductor manufacturers and oil and gas companies that also need to diversify into new markets and globalise their operations? How can they scale up their UNIX infrastructure to support the needs of their global business? As companies globalize their operations, they need to provide remote access to network resources such as the design applications used across the high tech and oil and gas sectors. For example Cadence and Intergraph respectively provide design applications for these particular industries, but how do you scale your UNIX-based design infrastructure without adding significant costs to your business, i.e., purchasing more UNIX workstations and at the same time not compromising on network security? The high tech industry has been plagued with network hacking issues over recent years. Designs for the latest semi-conductor chips are stolen from corporate networks and before you know it a cloned semi-conductor chip has been manufactured in the Far East. But if you need remote access to a UNIX based infrastructure how can you ensure that the connectivity between the remote user and the location hosting the UNIX application is secure? My first experience of using a virtualized computing infrastructure was back in the late 1990s when Sun Microsystems introduced their Java based Ray workstations. You popped your smart card into the Ray workstation, this provided a form of identification to the workstation, and you were then presented with a thin client that was able to access UNIX applications hosted in a remote data centre location. At the time I was building complex demonstration environments and the Sun Ray offered a unique way to access information that would traditionally have required a full blown UNIX workstation. Now admittedly the processing power on the early Ray workstation was not great for manipulating graphics and in fact later in its life the Sun Rays were used for running more general business applications rather than high end PLM solutions. But the concept of running applications remotely on thin clients was certainly a great idea and one which is still in wide use to this very day, especially in the high tech and energy sectors. However the technology used to run remote UNIX applications has moved on considerably. Here at OpenText, we offer a number of solutions to help companies manage, archive and access their digital information, irrespective of the type of platform you might be running on. OpenText Exceed VA TurboX, ETX, is a remote access connectivity solution, which allows organizations to deploy UNIX applications virtually to their users by keeping them running on UNIX servers, while allowing users to remotely access them through a web browser and achieve the same user experience than if they had the application installed on their desktop, no matter the distance between them and the data centre, both securely and centrally managed. ETX is ideal where the user needs to run high performance applications:- UNIX applications are accessible from anywhere in the world with no decline in performance, always secure and centrally managed ETX lets people work and collaborate virtually on UNIX applications from Windows, Linux and UNIX desktops anywhere in the world It removes the limitations and the complexity of traditional remote access solutions by offering the fastest connection to your business wrapped in a uniquely intuitive user experience Designed for the enterprise data center, it improves the security, manageability and availability of your UNIX applications So whether your business is in high tech, oil and gas or other industry sectors such as financial services where virtualised platforms can help reduce operational costs across your IT infrastructure, ETX can help companies take a big step into the digital first world. ETX allows companies to get products to market or deliver capital projects to their customers in a much shorter timeframe. Companies are able to improve how computing resources are deployed and it allows a centralized, private cloud to be established. ETX allows employees to be more productive through 24/7, global access to corporate business information and finally this is all achieved through a highly secure and regionally compliant solution. If you would like a free trial and further information on our ETX solution then please visit our dedicated web page by clicking here.

Read More

EDI and B2B Insights – What Kinds of Analytics Do I Need?

In my last blog, Why Your EDI and B2B Processes Need Analytics, I provided examples of the kind of B2B analysis questions that you need to have answers for in order to improve competitiveness in your business. I have found three prerequisites that will create value from your B2B data via analytics: A foundation of good-quality B2B data for analysis. If you are already automating your B2B processes, you are likely to have some of this critical data already upon which your analysis can be based. The definition of what you want to measure and how the results can be visualized in a way that enables you to understand trends, markets, customers and suppliers. The analytics tools to deliver the B2B data visualizations you need and that can help you to engage decision-makers. Below is a “ladder” of the types of analytics capabilities in sequence from the fundamental capabilities at the bottom to the advanced capabilities at the top. Most companies are beginning to incorporate the first few capabilities at the bottom rungs of the ladder, and will need to start to plan how to incorporate those at the top in order to successfully compete in their chosen markets. Standard Reports – these are pre-defined, configurable reports that provide key information about files and transactions you exchange with your trading partners. These typically include powerful capabilities to sort, filter, save, schedule and distribute. For example, you may wish to see a monthly report of all orders received from all your customers. Adhoc Querying & Reporting – this is the capability to search and generate custom reports on your B2B transactions by document type, trading partner, date, time, status, and more. You can define the fields to include on the report and tailor it to your specific needs. Dashboards and Alerts– These provide both the timely “track and trace” data needed to address exception conditions and the summary data needed to identify performance trends, drill down to view specific details and export the data through integration with Microsoft Office. For example, below is a transaction dashboard that provides a visual summary of transaction activity and exception situations. Furthermore, it provides volume trends by document type and trading partner. So now, at a glance you can see which transactions need your immediate attention (e.g. purchase orders that have not been acknowledged), which documents account for the highest volume (e.g. invoices are in the 2nd spot after carrier shipment statuses), and which trading partners account for the highest transaction volumes. Configurable Dashboards – This provides the ability to integrate and combine EDI and non-EDI data from various applications and gain insights into supply chain trends concerning reliability, responsiveness, flexibility, trading partner performance, e-invoicing performance, etc. In addition, these dashboards can be integrated with workflows based upon user-defined rules. For example, if the dashboard shows that order volume from a customer drops by 20% over a month, it can trigger a user-defined business process and/or send a notification to specific users in the organization. Predictive Modelling – This is an advanced capability that few businesses have today, but which is now possible with the latest analytics technology. Sophisticated statistical models that analyze B2B data available from various applications can help you forecast trends and needs in inventory management, logistics and all other areas requiring strategic planning. Scorecards – This is a visual display of Key Performance Indicators (KPIs), such as order acceptance, invoice accuracy, delivery punctuality, ASN timeliness, and fill-rate. The scorecard enables you to measure, evaluate and analyze supplier performance. This information can then be used by buyers and suppliers during negotiations when justifying business awards and pricing. Benchmark / Index – This capability benchmarks an organization’s performance against the industry and provides insight into those processes that trail or exceed your competition, thus enabling your organization to take appropriate action. If this blog has interested you and you would like to learn more, click here to watch this new on-demand webinar, Using Analytics to Unlock the Value of your B2B Data.

Read More

OpenText Study Proves that B2B Integration Significantly Improves Supply Chain Performance

Over the past few months I have posted a few blogs highlighting the results from a new OpenText sponsored study by IDC Manufacturing Insights. The study demonstrated that there is a direct correlation between how increased adoption of B2B Integration technologies directly improves supply chain performance. In fact take a look at how key supply chain metrics are improved through the adoption of B2B integration technologies. To wrap up this project I just wanted to highlight how you can access a recorded version of the webinar about this study via this link.  

Read More

Why Your EDI and B2B Processes Need Analytics

Once your B2B business processes are automated and transactions are flowing electronically (usually leveraging EDI and XML), you will need to have visibility into those transactions in order to speed up your decision-making, respond quickly to changing customer and market demands, and optimize your business processes.  This type of actionable business insight into your B2B transaction flows is exactly the kind of information you need at your fingertips to remain a competitive leader in your market. There are several types of information – analytics – to which you need quick and easy access in order to make informed and actionable business decisions. According to a recent Aberdeen Group report (1), 65% of companies indicated that they need to improve their analytics capability. And half of all the companies said they are not spending enough on analytics capabilities.  The study also showed that high-performing businesses are three and a half times more likely to use analytics than low performers. Imagine that you are the buyer in an ordering transaction. The analytics capabilities you want will provide answers to questions such as: When will the goods I ordered be delivered? Will there be a shipment delay? What percent of my B2B suppliers are sending me advance ship notices on-time? What are the top document types I’m exchanging with my suppliers? Who are my top suppliers and how many transactions have I completed with them? Who are my top- and bottom- performing suppliers based on specific KPIs (such us complete orders, accurate shipments, on-time deliveries) Now, imagine that you are the supplier in an ordering transaction. You want  answers to questions such as: Has my customer submitted the order I’ve been awaiting? Was my order accepted? Has my invoice been paid? Which of my customers sent me the most orders during the holiday season? Which of my customers send me lots of changes to their purchase orders? Which of my customers pay on time; which ones pay late? For which customers has the order volume increased or decreased by more than 20% over the last 6 months? Armed with the insights from these capabilities you can: Immediately react to exception conditions to avoid problems, such as late deliveries that would negatively impact your customer service, increased costs due to expedited service requirements or increased inventory Evaluate the performance of suppliers against KPIs and then proactively collaborate with them to improve performance and lower costs Award more business to your high performers, based on quality, timeliness, and other key performance indicators Ensure that future sourcing negotiations take performance and quality into account – e.g. when you are the buyer you can negotiate for lower prices in return for more orders with your best suppliers; as a supplier you can highlight excellent performance in requesting more business from your customers. Manage more partners more effectively with automated processes and scoring/analysis tools In my next blog I will describe the different types of analytics that can be applied to obtain these types of critical B2B process insights. To learn more about the steps in the journey to unlock the value of your supply chain data, attend this webinar on Thursday, April 9, 2015: Using Analytics to Unlock the Value of Your B2B Data.  Register Now >> (1) Bob Heaney, “Supply Chain Intelligence: Descriptive, Prescriptive, and Predictive Optimization,” Aberdeen Group, February 2015

Read More

Step Aside Cloud, Mobile and Big Data, IoT has just Entered the Room

Mark Morley

This article provides a review of the ARC Advisory Group Forum in Orlando and expands on the ever increasing importance of analytics in relation to the Internet of Things The room I am referring to here is the office of the CIO, or should that be CTO or CDO (Chief Digital Officer), you see even as technology is evolving, the corporate role to manage digital transformation is evolving too. Since 2011, when Cloud, Mobile and Big Data technologies started to go mainstream, individual strategies to support each of these technologies have been evolving and some would argue that in some cases they remain separate strategies today. However the introduction of the Internet of Things (IoT) is changing the strategic agenda very quickly. For some reason IoT as a ‘collective & strategic’ term, has caught the interest of the enterprise and the consumer alike. IoT allows companies to effectively define one strategy that potentially embraces elements of cloud, mobile and Big Data. I would argue that in terms of IoT, cloud is nearly a commodity term that has evolved into offering connectivity any time, any place or anywhere. Mobile has evolved from simply porting enterprise applications to HTML5 to wearable technology such as Microsoft HoloLens, shown below. Finally Big Data which is broadening its appeal by focussing more on the analytics of information rather than just archiving huge volumes of data. In short, IoT has brought a stronger sense of purpose to cloud, mobile and Big Data. Two weeks ago I was fortunate to attend the ARC Advisory Group Forum in Orlando, a great conference if you have an interest in the Industrial Internet of Things and the direction this is taking. The terminology being used here is interesting as it is just another strand of the IoT, I will expand more on this naming convention a bit later in this post. There were over 700 attendees to the conference, and a lot of interest, as you would expect from industrial manufacturers such as GE, ABB, ThyssenKrupp & Schneider Electric. These companies weren’t just attending as delegates, they were actually showcasing their own IoT related technologies in the expo hall. In fact it was quite interesting to hear how many industrial companies were establishing state of the art software divisions for developing their own IoT applications. For me, the company that made the biggest impact at the conference was GE and their Intelligent Platforms division. GEIP focused heavily on industrial analytics and in particular how it could help companies improve the maintenance of equipment, either in the field or in a factory by using advanced analytics techniques to support predictive maintenance routines. So how does IoT support predictive maintenance scenarios then? It is really about applying IoT technologies such as sensors and analytics to industrial equipment and then being able to process the information coming from the sensors in real time to help identify trends in data and how it is then possible to predict when a component such as a water pump is likely to fail.  If you can predict when a component is likely to fail, you can replace a faulty component as part of a predictive maintenance routine and the piece of equipment is less likely to experience any unexpected downtime. In GE’s case they have many years of experience and knowledge of how their equipment performs in the field and so they can utilise this historical data as well to determine the potential timeline of component failure.  In fact GE went to great lengths to discuss the future of the ‘Brilliant Factory’. The IoT has brought a sense of intelligence or awareness to many pieces of industrial equipment and it was interesting learning from these companies about how they would leverage the IoT moving forwards. There were two common themes to the presentations and what the exhibitors were showcasing in the expo hall. Firstly cyber-security, over the past few months there has been no end of hacking related stories in the press and industrial companies are working very hard to ensure that connected equipment is not ‘hackable’.  The last thing you want is a rogue country hacking into your network, logging into a machine on the shopfloor and stealing tool path cutting information for your next great product that is likely to take the world by storm.  So device or equipment security is really a key focus area for industrial companies in 2015.  Interestingly it wasn’t just cyber-security of connected devices that was keeping CIOs awake at night, a new threat is emerging on the horizon.  What if a complete plant full of connected devices could be brought down by a simple Electro Magnetic Pulse (EMP) threat, this was another scenario discussed in one of the sessions at the conference. So encryption and shielding of data is a key focus area for many research establishments at the moment. The second key theme at the conference was analytics. As we know, Big Data has been around for a few years now but even though companies were good at storing TBs of data on mass storage devices they never really got the true value from the data by mining through it and looking for trends or pieces of information that could either transform the performance of a piece of equipment or improve the efficiency of a production process.  By itself, Big Data is virtually useless unless something is done which results in actionable intelligence and insight that delivers value to the organisation. Interesting quote from Oracle,93% of executives believe that organisations are losing revenue as a result of not being able to fully leverage the information they have. So deriving value from information coming from sensors attached to connected devices is going to become a key growth sector moving forwards. It is certainly an area that the CIO/CTO/CDO is extremely interested in as it can directly impact the bottom line and ultimately bring increased value to shareholders. I guess it is no surprise then that the world’s largest provider of Enterprise Information Management solutions, OpenText, should acquire Actuate, a leading provider of analytics based solutions. Last week the Information Exchange business unit of OpenText, which has a strong focus on B2B integration and supply chain, launched Trading Grid Analytics, a value add service to provide improved insights into transaction based information flowing across our cloud based Trading Grid infrastructure. With 16 billion transactions flowing across our business network each year there is a huge opportunity to mine this information and derive new value from these transactions, not just in the EDI related information that is being transmitted between companies on our network. Can you imagine the benefits that global governments could realise if they could predict a country’s GDP based on the volume of order and production related B2B transactions flowing across our network? Actuate is not integrated to Trading Grid just yet but it will eventually become a core piece of technology to analyse information flowing across not just Trading Grid but our other EIM solutions.  It is certainly an exciting time if you are a customer using our EIM solutions! Actuate has some great embedded analytics capabilities that will potentially help improve the overall operational efficiency of connected industrial equipment. In a previous blog I mentioned about B2B transactions being raised ‘on device’ , well with semi-conductor manufacturers such as Intel  spending millions of dollars developing low power chips to place on connected devices, it means that the device will become even more ‘intelligent’ and almost autonomous in nature.  I think we will see a lot more strategic partnerships announced between the semi-conductor manufacturers and industrial equipment manufacturers such as GE and ABB etc. Naturally, cloud, mobile and big data plays a big part in the overall success of an IoT related strategy. I certainly think we will see the emergence of more FOG based processing environments.  ‘FOG’ I hear you ask?, yes another term I heard at a Cisco IoT world forum two years ago.  Basically a connected device is able to perform some form of processing or analytics task in a FOG environment which is much closer to the connected device than a traditional cloud platform.  Think of FOG as being half way between the connected device and the cloud, ie a lot of pre-processing can take place on or near the connected device before the information is sent to a central cloud platform. So coming back to the conference, there was actually another area that was partially discussed, the area of IoT standards.  I guess it is to be expected that as this is a new technology area it will take time to develop new standards for how devices are connected to each other and standard ways for transporting, processing and securing the information flows. But there is another area of IoT related standards that is bugging me at the moment!, the many derivatives of the term IoT that are emerging.  IoT was certainly the first term defined by Kevin Ashton, closely followed by GE who introduced the Industrial Internet of Things, Cisco introducing the Internet of Everything and then you have the German manufacturers introducing Industry 4.0.  I appreciate that is has been the manufacturing industry that has driven a lot of IoT development so far but what about other industries such as retail, energy, healthcare  and other industry sub-sectors?  Admittedly IoT is a very generic term but already it is being more associated with consumer related technologies such as wearable devices and connected home devices such as NEST.  So in addition to defining standards for IoT cyber security, connectivity and data flows, how about introducing a standard naming convention that could support each and every industry? As there isn’t a suitable set of naming conventions, let me start the ball rolling by defining a common naming convention!  I think the following image nicely explains what I am thinking of here. In closing, I would argue, based on the presentations I saw at the ARC conference, that the industrial manufacturing sector is the most advanced in terms of IoT adoption. Can you imagine what sort of world we will live in when all the industries listed above embrace IoT, one word, exciting! Mark Morley currently leads industry marketing for the manufacturing sector at OpenText.  In this role Mark has a focus on automotive, high tech and the industrial sectors. Mark also defines the go-to-market strategy and thought leadership for applying B2B e-commerce and integration solutions within these sectors.

Read More

Forget the Oscars, Tata Motors Won a Bigger Award in Mumbai

Last week I had the pleasure of attending our Innovation Tour event in Mumbai, the first leg of a multi-city tour of the world to showcase our Enterprise Information Management solutions and how they help companies move to the digital first world! The event was very well attended and it was good to see keen interest being shown in our new offerings such as Actuate and Core and our other more mature EIM solutions. Enterprise World has traditionally been our key event of the year, but the Innovation Tour provides a way for OpenText to get closer to our customers around the world, Mumbai was no exception with keen interest shown in our expo hall. I have been to India before, two years ago in fact, to meet with an automotive industry association that looks after the ICT needs of the entire Indian automotive industry. Back then, the discussion was focused around B2B integration. However, last week’s event in  Mumbai showcased all solutions from the OpenText portfolio. One of the interesting solution areas being showcased by one of our customers was Business Process Management (BPM) and it is only fitting that one of our Indian based customers won an award for their deployment of BPM. Why fitting? Well, India has long been the global hub for business process outsourcing, so I guess you could say there is a natural interest in improving the management of business processes in India. OpenText has a strong presence in the Indian market. OpenText presented a number of awards during the event, and Tata Motors was the worthy winner of the award for the best deployment of BPM. Incidentally, Tata Motors also won the global Heroes Award at last year’s Enterprise World event for their deployment of our Cordys BPM Solution. So who are Tata Motors, I hear you ask? Well, they are the largest vehicle manufacturer in India with consolidated revenues of $38.9 billion. Tata Motors is part of a large group of companies which includes Tata Steel, Jaguar Land Rover in the UK, Tata Technologies and many other smaller companies that serve the domestic market in India. Tata Group is fast becoming a leading OpenText customer showcasing many different EIM solutions. For example, Jaguar Land Rover uses OpenText Managed Services to manage the B2B communications with over 1,200 suppliers following divestiture from Ford in 2009. Tata Steel in Europe also uses our Managed Services platform to help consolidate eleven separate EDI platforms and three web portals onto a single, common platform. So, simplification and consolidation of IT and B2B infrastructures is a common theme across Tata Group, and Tata Motors is no different with their implementation of OpenText BPM. Tata Motors has struggled over the years to exchange information electronically with over 750 vehicle dealers across India. Varying IT skills, multiple business processes, combined with having to use a notoriously difficult utilities and communications infrastructure across the country was really starting to impact Tata Motor’s business. In addition, their IT infrastructure had to support over 35,000 users and there were over 90 different types of business application in use across 1,200 departments of the company. So ensuring  that accurate, timely information could be exchanged across both internal and external users was proving to be a huge problem for Tata Motors. Step forward, OpenText BPM! Tata Motors decided to depoy our Cordys BPM solution as a SOA based backed platform to connect all their business applications and more importantly provide a common platform to help exchange information electronically across their extensive dealer network. Even though they had deployed Siebel CRM across their dealer network, Tata Motors faced a constant challenge of having to process a high volume of manual, paper based information, quite often this information would be inaccurate due to mis-keying of information. A simple mistake, but when scaled up across 750 dealers, it can have a serious impact on the bottom line and more importantly impact customer satisfaction levels with respect to new vehicle deliveries or spare parts related orders. Tata Motors had a number of goals for this particular project: Implement a Service Oriented Architecture – Primary objective was to setup a SOA environment for leveraging existing services and hence avoid re-inventing the wheel. They also wanted to use this platform to streamline the current integrations between multiple business systems. Process Automation / Business Process Management – They had a lot of manual, semi-automated of completely automated processes. Manual or semi-automated processes were inefficient and in some cases ineffective as well. Some of their automated processes were actually disconnected with actual business case scenarios. So the goal for implementing BPM was to bring these processes more nearer to ‘business design’, thus improving efficiency and process adherence. Uniform Web Services Framework – Tata Motors goal was to try and establish a single source of web services that could convert existing functionalities of underlying service sources into inter-operable web services. So, what were the primary reasons for Tata Motors choosing OpenText BPM? It was a SOA enabler, its business process automation capabilities, comprehensive product for application development, minimizes the application development time and improved cost effectiveness. Their BPM implementation covered two main areas: Enterprise Applications Integration – mainly deals with inward facing functionalities of employee and manufacturing related process applications. They had many applications but they had a common fault, they did not follow SOA principles. Web services had to be developed inside every application which was very inefficient from a time and resources point of view. In addition, if an application had to connect to SAP then it was an independent, unmanaged and insecure connection. Customer Relationship & Dealer Management Systems Integration –Tata Motors is the biggest player in the commercial vehicles sector in India and one of the biggest in terms of passenger car related sales, with over 750 dealers scattered across India. The dealerships are managed using Siebel CRM-DMS implementation but with many changes being rolled out across the system it needed a supporting platform to effectively manage this process. Cordys became the primary environment for developing CRM-DMS applications. So in summary, Cordys BPM has been integrated with SAP, Siebel CRM-DMS, Email/Exchange Server, Active Directory, Oracle Identity Manager, SMS Gateway and mobile applications across Android and iOS. The Cordys implementation also resulted in a number of business benefits including, improved process efficiency, stronger process adherence, built on a SOA based platform, significant cost and time savings. The project has already achieved its ROI ! Moving forwards OpenText BPM will act as a uniform, centrally managed and secure web services base for all applications used across Tata Motors landscape, irrespective of the technology in which it is developed. The platform will also provide an evolving architecture to mobilise existing applications and they plan to integrate to an in-house developed document management system. Finally, the go forward plan is to move their Cordys implementation to the cloud for improved management of their infrastructure. I have visited many car manufacturers over the years and one company head quartered in the Far East had over 300 dealers in Europe and each one had been allowed to implement their own CRM and DMS environments to manage their dealer business processes. Prior to the acquisition of GXS (my former company) by OpenText, I had to inform them that GXS didn’t have a suitable integration platform to help seamlessly connect all 300 dealers to a single platform. With OpenText BPM we can clearly achieve such an integration project now and Tata Motors is certainly a shining light in terms of what is achievable from an extended enterprise application integration point of view. Congratulations Tata Motors! For more information on OpenText BPM solutions, please CLICK HERE. Finally, I just want to say many thanks to my OpenText colleagues in India; it was a very successful event and a team effort to make it happen. For more information on our Innovation Tour schedule, please CLICK HERE

Read More

Is your EDI program strategic? If yes, find out which documents you need to implement. (part 2)

In my last blog on this topic I introduced the Purchase Order Acknowledgment and the Purchase Order Change and discussed how you can derive benefits from both these documents regardless of the industry sector you are in.  In this blog, I focus on documents that are of specific benefit for anyone in, or working with, the retail sector. Here are a few you should definitely consider. Product and Price Catalog This is a key document that a supplier sends to its retailers.  It enables the supplier to provide product and price information for the retailer to use during the purchasing process.  This document, which is also known as a “sales catalog,” includes information about each product such as: Item identification number Detailed item description, including color, size, dimensions and other unique identifiers Ordering requirements, such as lead time and required quantities This is one that you would use most with third-party catalog providers, but it can also be used on a peer-to-peer basis with your main trading partners. The master product data information in this document is re-used in many other supply chain transactions, so it’s important that it contains accurate data so that errors can be reduced in purchase orders, ship notices and invoices, among other documents. This will enable significant quality improvements and benefits both retailer and supplier.  Ultimately, starting out with good data will speed product delivery to the retailer and eliminate discrepancies between purchase orders and invoices, and for suppliers, this should result in faster payment. Inventory and Product Activity Data Advice Retailers usually send this document to their suppliers to give them information about inventory levels, sales numbers and other related product activity information, such as which items are on back-order.  It should include: Item identification number On-hand inventory quantity by store Type of product movement, such as items sold, out-of-stock, received or on order Future demand calculations This versatile document can also be used in supplier-managed stock replenishment programs and sales forecasting.  Furthermore, for drop-ship orders, (those that are shipped directly to the consumer), it is probably the single most critical business document that can be exchanged. Most retailers’ e-commerce applications rely upon inventory feeds from their supplier here in order to determine whether products can be available for consumer purchases on websites. Delivery Confirmation This document is also extremely useful for direct-to-consumer delivery. Most products sent via a drop-ship process travel with small package carriers. The supplier obtains a tracking number from the carrier and provides it to the retailer via the Advance Ship Notice document.  Any automated communication typically ends at that point and so if order status is needed, the only way to get it is to contact the carrier. Instead, you could have complete end-to-end visibility of your order status if you ask the carrier to send a Delivery Confirmation document to confirm consumer receipt.  This helps the supplier to close the purchase order and to manage the payment and settlement cycle. Click here if you are interested in learning more about EDI in the retail industry.

Read More

Could File Sync and Share Radically Simplify B2B Commerce?

File Sync and Share services like Dropbox and Box.net have made it easier than ever to share files with co-workers or colleagues at other companies. You create a shared folder with another registered user then drag and drop the file you want to exchange. A copy will be placed in the other user’s folders. Even unregistered users can receive files. They receive an email with a download link. Why can’t exchanging documents with business partners in your supply chain be this easy? What if there was a file sync and share service designed for Business-to-Business (B2B) transactions? Here is how it would work. A user would establish a shared folder with each of their key business partners (customers, suppliers, banks). To make things simpler, they could search through a directory of all the businesses registered on the service and simply check a box next to those they wanted to share with. For example, a small apparel supplier (let’s call them Stripes Inc) might create folders for each of their customers – Walmart, JC Penney, Macys and Sears. When Stripes wanted to send an invoice to a retailer (for merchandise it shipped to their stores) an accounting clerk would simply copy and paste the file (PDF, spreadsheet, EDI) into the appropriate shared folder. Every few minutes the file sync serve would poll Stripes’ folder for new content. Each new (or changed) file would be copied to the retailer’s folder. Similarly, Stripes could set up folders for its banking partners (factors, cash management and trade finance providers). When Stripes wanted to send payment instructions an accounts payable clerk would simply copy them into the appropriate folder. The file sync service would identify the new files and copy them to the bank’s folder as well. Doesn’t this sound much easier than the painful supplier portals that small businesses have to endure today? No more logging into 10 different web portals. No more re-keying data (e.g. invoice fields from an accounting system). No more swivel chairing back and forth between your internal business applications and an online forms. File Sync and Share services would be faster, cheaper and easier to use than today’s web portals. File sync and share is extremely low cost. In fact, it is free in some cases. As a cloud service, file sync and share does not require users to purchase any additional software. And there is no re-keying of data required. Most end-users would require no training to learn the technology. To make this a reality, file sync and share services would need to evolve. First, these services would need to adopt enterprise-grade security. Second, file sync and share vendors would need to change their privacy policies so they could not snoop on the data being exchanged. Third, formal service level agreements would need to be in place to ensure high availability. Some functional enhancements would be required as well. Big companies are already exchanging millions of B2B transactions per day using communications protocols such as AS2, FTP and MQ. To gain adoption and endorsement, a new B2B file sync and share service could not expect large retailers, automakers, manufacturers and financial institutions to make significant changes to their IT environment. The file sync service would need to be able to send/receive files to/from corporate B2B gateways using B2B protocols such as AS2 and FTP. RESTful APIs could allow big companies to pull files every few minutes onto their own B2B gateways as well as to obtain meta-data about the files exchanged. A whole suite of value-added services could be created in the cloud. Examples might include: • Translation – PDF, Word and other unstructured document formats could be scanned and converted into XML using OCR technologies. Similarly, variants of EDI, XML and other standardized messages could be translated from one format to another in the cloud. • Data Validation – Services that check to ensure all the appropriate fields in a document (e.g. invoice) are populated. Documents with missing data would not sync. The sender could be notified with a user-friendly error message highlighting the fields requiring attention. More thoughts on file sync and share in an upcoming post.

Read More

Should you say “YES” when your customer asks you to implement EDI?

I just completed a series of blogs about EDI onboarding of a supplier community. Those blogs assume that the reader is the buyer in the relationship.  But, if you’re the supplier in the relationship, you may be wondering what’s in it for you to comply with your customer’s request to trade electronically.  Here are just a few of the benefits you will be likely to enjoy: Better relationships with customers For many companies today, EDI is a prerequisite for doing business.  You have a greater likelihood of starting and maintaining a positive business relationship by replying: “Yes, of course we can receive your Purchases Orders (PO) via EDI.” “Yes, we will send you Advance Ship Notices (ASNs) so you will know exactly when your orders will arrive and what is included in our shipments.” “Yes, we will use barcode labels on our shipments so you can scan our shipments upon arrival and achieve greater productivity in your warehouses and distribution centers.” More revenue from current customers Answering positively to your customers’ EDI requests means your company is seen to be easy to do business with.  That frequently results in receiving more orders from the same customers. That, of course, in turn translates into higher revenues. A competitive edge Once you have developed your EDI capabilities you then have a competitive edge that you can proactively use as a differentiating service feature during the sales process with new prospects and other customers, both locally and internationally.  This means that your sales team will be happy because they don’t have to worry about whether they can accept a new customer order or not.  (Watch this video case study to hear Harper Collins describe how EDI has enabled them to accept new customer orders without fear.) Faster payments and better cash flow If you’re receiving purchase orders and sending invoices electronically, a common by-product is faster payments as a result of the faster invoicing process.  Your EDI invoice is more likely to be complete and accurate.  Thus, it can be approved for payment sooner and you should receive the funds earlier – particularly when early payment discounts are available. You should definitely say “yes!” when your customer asks you to exchange business documents via EDI.  It’s a win-win whether you’re the buyer or the supplier! If you want to learn more about the basics of EDI, you may be interested in reading this short EDI Basics book.

Read More

Simplifying the Conflict Minerals Reporting Process

Earlier this year many North American based companies were filing their conflict minerals reports for the first time. The Dodd-Frank Conflict Minerals Law was introduced to help understand the source of conflict minerals across global supply chains, primarily in the high tech, automotive and CPG manufacturing sectors. This is an area that I have blogged about before, however this blog will provide an update on how this year’s reporting process went. I will also be covering this subject in more detail during one of my presentation sessions at our Enterprise World conference next month. This new law was introduced by the US Senate and applies to any North American based company filing to the Securities and Exchange Commission, SEC. Companies have to provide evidence that their supply chains are not using conflict minerals. Even though it was just North American based companies that had to report to the SEC, suppliers located in other countries would have to provide evidence to their respective customers in North America of where potential conflict minerals were sourced from. Conflict minerals, namely Tin, Tungsten, Tantalum and Gold (collectively known as the 3TG minerals) are mined all over the world however this new regulation specifically relates to the sourcing of 3TG minerals from the Democratic Republic of Congo (DRC) in Africa. Many mines in this region are owned by militia groups and the proceeds from the sale of 3TG minerals are used to fund their military operations. 3TG minerals are used in a range of every day products: The new law aims to check the source of these minerals before they enter the smelter process. In December 2010 the International Organisation for Economic Co-Operation and Development (OECD) produced a document describing a five stage process which provides due diligence guidance for sourcing minerals from conflict affected and high risk areas around the world. Stage two of this framework specifically relates to the assessment and reporting process for identifying the source of conflict minerals. To assist with the reporting process, the Conflict Free Sourcing Initiative (CFSI) was established to help companies implement a process for assessing their supply chain and to find out where 3TG minerals were sourced from. CFSI devised a SEC approved reporting Microsoft Excel spreadsheet that companies could use for assessing their supply chains. All of the major industry analysts have produced reports offering their own analysis on the sourcing of conflict minerals, however Deloitte succinctly summarised the issues as follows, “The complexity of today’s supply chains combined with the lack of visibility into sourcing practices will be one of the key challenges of ensuring that Dodd-Frank can be adhered to”. So how did companies do during the first reporting period and what were the challenges that they faced during the assessment process? Initial estimates of the number of companies that would be impacted by this new ruling were 6000, however a study conducted by Ernst and Young in June 2014, just after the 2014 reporting process had been completed, showed that the actual number of companies that completed a standard disclosure form to the SEC was just over 1300 and of these just 1000 completed a conflict minerals report as they had reason to believe that 3TG minerals had been sourced from the DRC. The Ernst and Young report went on to say that: Average number of suppliers surveyed was 2500, but ranged from just 5 to over 40,000 suppliers 49% of respondents came from the technology, industrial and CPG sectors 43% of respondents showed sourcing of some portion of minerals from the DRC 52% of companies did not disclose supplier response rates, of those that did respond only 15% of companies had supplier response rate greater than 90% Only 27% were able to provide a list of smelters and refiners After reviewing some of the conflict minerals disclosures on the SEC website it became clear that many companies had struggled to engage with their entire supply chain and in fact there were some remarkably similar issues faced by reporting companies, namely: Ensuring that supplier contact information was up to date to allow reporting template to be sent to them Some companies received no response from their direct and sub-tier materials suppliers, partly due to the complexity of their respective supply chains Information provided by suppliers was often incomplete or inaccurate Suppliers had to be chased up for report submissions to meet SEC’s May 31st deadline Part of the problem related to acquiring information from suppliers is the reporting tool itself, even though it is relatively easy to complete, the main challenge is the distribution of the spreadsheet to a supplier community and then tracking all responses. If a company for example has more than ten thousand trading partners located all over the world then this problem becomes even more complex. OpenText™ Active Community is a cloud based community management platform that is used to manage day to day interactions with a supply chain community. Using a centrally managed archive of supplier contact information combined with comprehensive email management and reporting tools, Active Community can help remove the complexities of managing the distribution of information to a trading partner community. OpenText has re-created the CFSI reporting template within Active Community’s survey module. This means that companies can simply send an email to all their suppliers with a link to a reporting web form and all responses can be tracked and reported on. Using Active Community for the conflict minerals reporting process offers a number of key benefits: Provides an effective cloud based platform for distributing and tracking responses to conflict minerals based assessments Offers a simple and efficient reporting environment to encourage 100% participation from trading partners Ensures trading partner information is accurately maintained within a centralized environment Allows a company to meet an important corporate social responsibility objective and allow a conflict minerals report to be filed on time Even though the reporting process is only mandated by law in North America at the moment, other regions around the world are closely monitoring the US reporting process. The European Union passed a ruling earlier this year that it would allow companies located in member countries to self-certify their supply chains for conflict minerals. The EU ruling currently applies to importers of raw materials and does not include manufacturers and companies importing finished goods. The US and EU rules are intended to introduce more transparency into global supply chains, companies will therefore be ethically compelled to find out what is in their supply chains. Moving forwards it is expected that conflict minerals sourcing will become a core part of a company’s Corporate Social Responsibility initiative, which of course has board level support in most companies. OpenText has developed a number of resources to explain how we can help companies simplify their reporting process, these resources include an executive briefing document, a short webinar providing more details on the conflict minerals ruling and how Active Community can help and finally a twenty minute demonstration of the CFSI template within Active Community and how it can be used to quickly survey a supplier community. If you would like to see a short introductory video which introduces the conflict minerals ruling then please see the video below. To access our conflict minerals resources, please click here.

Read More

EDI Supplier Enablement – Third Party or In-House?

EDI

If you’ve read my recent blogs on Supplier Enablement, (Six Pitfalls to Avoid When EDI-Enabling Your Suppliers – PART 1; Six Pitfalls to Avoid When EDI-Enabling Your Suppliers – PART 2; How to Avoid Pitfall #6 in your EDI Supplier Enablement Program; More on Pitfalls to Avoid When EDI-Enabling Your Suppliers) you will already know some of the obstacles to a successful supplier enablement program and some of the ways to overcome them. And, hopefully you’ve already familiarized yourself with the Supplier Enablement Program Checklist. One of the next questions you need to ask is whether you should do it yourself or you should enlist the help of an EDI Service Provider. If you are outsourcing your entire EDI program, then EDI-enabling your suppliers should be a part of the outsourcing service. But, if you are doing all or part of your EDI integration yourself, you may want to consider outsourcing just the supplier enablement component of your EDI integration program. Here are some of the ways I think that an EDI Service Provider can help you speed up the entire process. In case you wonder, speed matters because when the enablement happens faster, you will reap the benefits of automation sooner (e.g. lower cost, greater efficiency, better visibility). 1. Inform and educate your suppliers Having a good communications process with your suppliers to ensure that they understand your program and how it improves the business process for them, as well as conveying exactly what’s expected of them, is critical to getting their buy-in and participation. The best EDI Service providers will leverage their years of experience in performing these tasks. Furthermore, if your program is global, they should be able address specific requirements such as local language support during local business hours. The best providers will have already developed and honed the processes and tools that can be applied for a variety of program types, saving you the time and cost of doing so yourself. For example, they provide customized educational materials; live webinars with Q&A sessions; secure, personalized websites to streamline outreach and education; and surveys to validate contact and capabilities information. 2. Provide enablement solution options Essential to a successful program is availability of an EDI solution that suits each type of supplier. Some suppliers may prefer a fully integrated solution and need an EDI translator or gateway software. On the other hand, small- and medium-size suppliers may prefer a web-forms solution or an Excel-based solution. An EDI Service provider should be able to provide a range of solutions from software for a fully integrated solution, forms-based or Excel-based solutions. Forms- and Excel-based solutions can be pre-populated with your program-specific templates. Furthermore, they can include built-in business rules and validations capabilities that ensure ease-of-use for your suppliers while simultaneously ensuring document accuracy to prevent errors from polluting your ERP system. 3. Implement, test and report Once your suppliers have implemented the EDI solution that’s best for them, testing is required before they start exchanging live business documents with you. An EDI Service Provider should offer implementation specialists and tools to perform most of the required testing in the shortest period of time for you. When they turn over an “EDI-Ready” supplier, you can then be sure that your supplier can successfully send and receive EDI documents and that the EDI documents also comply with your implementation requirements. This leaves you with a final “end-to-end test” prior to moving the supplier into production mode. Having an EDI Service Provider can eliminate the initial challenges that typically arise during initial testing, saving considerable time for you and your suppliers. A Service Provider should also provide you with ongoing status updates and reports regarding each supplier’s progress. The companies that have leveraged supplier implementation services of an EDI Service Provider have found that their suppliers are fully prepared to trade electronically, quickly. This equals faster ROI for you from your EDI investment and informed, enabled and committed suppliers. You may find this Supplier Enablement Program Checklist a useful tool. It provides a listing of the detailed steps you should complete for each phase of your supplier enablement program, along with a description of each step.

Read More

How do you Manage a B2B Environment Following Divestiture?

There has been one story dominating the media in the UK over the past few months, Scotland’s attempt to seek independence from the United Kingdom. Despite losing the referendum to go their own way, Scotland will gain extra powers from the UK government to help offer a better standard of living for their population and improve growth prospects for the country. The interesting thing here is what would have happened if Scotland had broken away from the UK. Everything from running the public services and utilities infrastructures, through to managing revenue generation initiatives such as setting tax levels through to the technology infrastructure to support the running of the country in an independent capacity. Not to mention the currency, border control and defence spending issues as well. Even though the independence vote was lost, there are synergies here with companies that are going through a similar situation, namely going through some form of divestiture from their parent organisation. There have been countless divestitures in recent years as companies look to cut costs and at the same time raise valuable funds to grow their business or diversify into new markets. The chart below from Deloitte highlights some of the reasons why companies divest operations. Whenever a company goes through a divestiture process, one of the most important things to ensure is that the business can continue operating with minimum disruption. This is not easy, especially when IT infrastructures have to be untangled between the two organisations. The divestiture process is incredibly complex and it will affect all areas of a business, including the external supply chain. Unravelling a B2B infrastructure from a parent company can appear at first to be a monumental task, not only having to establish the technical components of the new B2B infrastructure but also ensuring that external trading partners can be effectively managed during the transition process. For this reason many companies will establish transition teams to oversee all aspects of a divestiture process. At the end of the day the newly divested business must continue to make money from day one and so the role of the transition team, especially relating to managing the new B2B infrastructure is critical. Now there are a number of options open to the transition team with respect to the B2B infrastructure. Taking the right course of action or direction for the divested operation’s B2B strategy is a critical decision, if you go in the wrong direction it could restrict future growth opportunities for the business. So which path do you take? Firstly, a divested operation could continue to use their existing B2B platform which for many companies would probably be the easiest option for them to follow. However there are complexities with extracting the B2B platform from the parent company and then continuing to manage trading partner relationships etc. Secondly they could decide to introduce a brand new platform themselves or adopt the B2B platform from the new owner. Either of these options will mean severe disruption to the divested operation’s business processes and trading partner relationships. Finally they could decide to outsource the management of their entire B2B platform to a trusted partner. Following a divestiture, especially if the company is acquired by a private equity firm, the company will need to be focused on their core competencies. This will be manufacturing goods and bringing revenue into the business, not having to worry about how they manage their B2B infrastructure on an ongoing basis. Therefore out of the three possible options, outsourcing is the best possible route for managing a B2B infrastructure and any accompanying trading partner relationships. After all what does a private equity firm know about running a B2B infrastructure? This is where OpenText™ Managed Services can help. Whichever route the divested operation decides to take, they will have a relatively short period of time to transition to the new B2B platform. Typically, a parent company would give the divested operation anywhere between 6 to 18 months to become totally self-sufficient in how they manage their B2B infrastructure. Establishing a B2B infrastructure in a divested operation is intrinsically linked to the overall IT infrastructure that will also need to be established in the divested business. Networks and routers have to be setup, internet connections have to established, PC’s and Laptops have to be configured, email systems have to be setup for each user. In addition, ERP systems have to be rolled out, CRM systems have to be setup within the sales and marketing departments and IT systems have to be deployed in new warehouses and logistics facilities. Now I haven’t even discussed what needs to be done from a B2B perspective yet, but already you can see that the IT infrastructure alone, which will help to support the B2B platform, is incredibly complex. As for the B2B infrastructure, the divested operation will need to develop or possibly migrate document maps to the new platform, this could typically range from 100 to a 1000 maps. Not all of these maps would need to be created from scratch, in one example I have heard about recently, one third of the maps for a divested operation were brought across from the parent company, one third were transferred, but required a few customisations and the remainder needed to be created from scratch. Mapping is a complex and time consuming process, would your company be able to undertake this internally?, would your B2B team have the skills to do this or would those skills remain with the parent company? Another common area of concern is how to integrate to an ERP platform. A manufacturing company, especially one with manufacturing plants all over the world will have to somehow re-integrate its B2B platform to the ERP platform. The longer this process is delayed, the more chance there is for duplicate data being entered into purchasing systems, which then leads to a lot of manual rework and rekeying of data to ensure the view of the information in the ERP platform is similar to the view in the B2B environment. Being able to integrate these two platforms as quickly as possible, to ensure one seamless, real time view of information is essential. Again, would your company be able to undertake this integration activity yourself or would you have to seek help from an outside provider? The other area of importance from a B2B transition point of view is managing the external community of trading partners. During the transition phase, the company still needs to be able to order and take delivery of goods from suppliers, they will still need to get their manufactured goods distributed around the world and more importantly each trading partner will need to be kept up to date with what is happening during the transition to the new B2B environment at the divested operation. OpenText™ Managed Services has helped over 800 companies outsource the management of their B2B infrastructure. With many years’ experience of supporting some of the biggest companies in the world, OpenText is well positioned to help divested operations maintain continuity with their B2B platform and their trading partner community. There are five key areas where Managed Services has been deployed to help divested operations manage their B2B infrastructures. Document Mapping – This is by far the most popular outsourcing request that we have seen, potentially hundreds of document maps will need to be transferred to the divested operation. Companies could decide to move the maps as is, move and modify or write completely new maps. Either way, the divested operation is unlikely to have in-house skills to create their own maps. In fact mapping skills are likely to remain within in the parent company. OpenText has a dedicated mapping centre of excellence to create document maps of any type and skills to map to ERP systems or to any specific industry standards. ERP Integration – As with document mapping, a divested operation may lose access to valuable ERP implementation personnel following a divestiture. OpenText has been working with many companies to help integrate their B2B platform to ERP related business processes. This ensures that externally sourced information can flow seamlessly into the ERP system. OpenText™ Managed Services has been integrated with a range of different ERP platforms, including SAP where we have experience of creating a range of IDOC document types to support key business processes. Trading Partner Management – Trading partners will need to be managed during and after a divestiture has taken place. The newly divested operation will have to maintain these relationships so that supply chains are not interrupted and the supply of goods can continue as normal. OpenText offers, a number of trading partner management offerings, in local language around the world. This includes training the trading partners in how to use all aspects of a new B2B service, testing connectivity and document exchange capabilities and finally offering a number of performance dashboards so that the trading partner community can be effectively monitored. Global B2B Support – Loss of support from a parent organisation means that global B2B support services will have to be provided to maintain global trading capabilities. OpenText offers a truly global 24/7 ‘follow the sun’ support service. End users are able to speak with multi-lingual support representatives who will be fully trained in the specific capabilities of the divested operation’s business processes Technology / Legacy Platform Upgrade – Divestitures provide the ideal opportunity to upgrade or introduce new B2B technologies. In the past, the parent company may not have allowed certain technologies or processes to be introduced simply because they did not have the skills to implement or support them. OpenText supports both legacy and the latest internet communication protocols, thus ensuring that trading partners can be connected irrespective of which communication protocol they may prefer to use. OpenText also offers a number of web based B2B solutions that allow any trading partner, no matter what their technical capability, to trade electronically with the divested operation. For more information on how OpenText™ Managed Services can help your business please click here or alternatively take a look at the SlideShare presentation below. In a future blog I will discuss how companies are using periods of restructuring to undertake digital transformation projects.

Read More

The Evolution of the Digital Manufacturing Business

In my last blog entry I discussed my own adoption of ‘digital’ technology over the years and how digital was currently going through another renaissance. However compared to the 1980’s when the adoption of digital technology was consumer driven, today it is the business world that is embracing digital. Before I discuss the future of the manufacturing digital business, especially as we enter the so called ‘fourth industrial revolution’ (or Industry 4.0 as it has become known among German manufacturers and highlighted in the above diagram from DFKI, 2011), I just wanted to use this blog entry to discuss how digital information has found its way into every department of a manufacturing operation over the past few decades. As I explained in my previous blog entry it was the design department that led the digital journey of many manufacturing companies. In the 1970s, design departments were just starting to introduce 2D Computer Aided Design (CAD) packages to try and automate manual drafting processes. Companies, mainly large manufacturers such as Ford and Boeing, were also investing heavily in mainframe computer systems to manage MRP and EDI systems. At the time, mainframe based solutions for running 2D CAD packages were expensive but they helped to speed up the design process and ensure that drawings were more accurate. Meanwhile on the shop floor, Programmable Logic Controllers (PLCs) were just starting to be introduced to help automate certain equipment used in a manufacturing process. The introduction of PLC’s and other automated handling systems heralded the start of the third industrial revolution. In the 1970’s, digital information was really confined to the design and production departments. As I discuss the next few decades I will explain how information has become more digitised and hence more ‘ pervasive’ across the various departments in a manufacturing operation. Moving into the 1980’s, companies started to introduce 3D wireframe CAD models and this was really the beginning of building a stronger digital relationship between the design and production departments. The machine tool paths required to manufacture a component could be applied directly to the 3D CAD model and was subsequently used to drive Computer Numerically Controlled (CNC) machines, ie machining information is driven directly from the external surface of the 3D CAD model. In addition, robotic arms were introduced to production lines to help automate assembly procedures. Smaller mainframe servers started to be installed to support the needs of the design office and the production department started to introduce CNC machining and MRP II software on dedicated servers. As manufacturers started to embrace Just-In-Time production systems, especially in the automotive industry, purchasing departments increased the use of EDI to automate and speed up the procurement process using Value Added Networks to connect with an increasingly global network of trading partners. The 1990’s saw the use of digital information explode across the manufacturing business. Design offices were moving from 3D wireframe to 3D solid and assembly modelling. Assembly modelling managed the relationships, ie positional information, between different 3D CAD models that made up a complete product and allowed detailed Bill of Materials to be compiled. It also allowed other information to be applied to the ‘assembly tree’, for example material, designer, and supplier type of information. The 3D CAD models could be used for other pre-production activities, for example creating rapid prototyping (3D printing) models to test conceptual designs, taking CAD models into a finite element analysis package to test stress levels across a component and create high quality 3D renderings and complex animations that could be used for marketing purposes. In addition, customers could put on Virtual Reality headsets and go on virtual tours of their products. This was really the decade when the ‘Virtual Product’ was introduced, some companies defined this as Electronic Product Definition (EPD). During the mid-1990s and as the internet started to become more pervasive, manufacturers started to build intranet and extranets to support the increasing volume of digital information being produced by their design and manufacturing operations. With the introduction of higher speed networks this was the decade where digital design information started to cross seamlessly into other manufacturing departments. MRP II systems evolved into ERP systems and as manufacturers started to expand their network of plants around the world they implemented a different ERP instance to manage the production operations for each plant location. During the same period, companies started to replace mainframe based systems with smaller, desktop based UNIX workstations. During this decade the 3D digital mock-up evolved still further and companies were trying to recreate the entire product within the design system. Complete digital representations of cars, planes and ships were being developed using new functionality such as clash detection, assembly/dis-assembly animations and simulation software. In addition, comprehensive web based data management systems were being deployed to manage the ever growing volumes of CAD data and ensure that globally dispersed design teams could get access to a central repository of design information. Marketing departments were able to use digital mock-ups as part of their product launches and for developing collateral and other supporting technical documentation. Meanwhile, RFID technology was starting to be used more widely within the confines of the factory for tracking goods or pieces of equipment. The development of web portals containing digital product information meant that field support teams could get remote access to information relating to a product, for example technical drawings and other associated maintenance information. Companies also started to establish content portals for storing other information created by Microsoft related products for example. During this decade companies started to replace expensive UNIX workstations with PC workstations and high end laptop PCs. Companies were also starting to consider how a complete digital representation of a product could be archived and handed to a client. For example as well as an airplane manufacturer receiving a physical jet engine to fit to an aircraft, they would also receive a digital representation of the engine which would help with the ongoing service and maintenance of that engine for the next decade or so whilst it was in service. During this decade companies expanded their ability to share and manage information using collaborative Product Lifecycle Management (PLM) solutions. Over the last few years, manufacturers have been decentralising their design offices into countries such as China and India. This was to allow local market needs to be quickly included in product designs. For example Audi has established a design office in China so that they can develop longer wheel base cars, as Chinese consumers prefer to be driven rather than drive themselves. The introduction of high speed wireless networks helped to mobilise digital design information with the introduction of PLM focused mobile apps to review 3D designs on a tablet device for example. Even the sales teams are able to show 3D design information on a tablet device due to the availability of ‘lightweight’ 3D CAD models that can be exchanged across the internet in a relatively short time. 3D printing devices are seeing a renaissance as the price of the technology has come down considerably and it has gained wide spread consumer interest, especially during 2014, where numerous applications for 3D printed models have entered the media. Field service or maintenance teams can now access digital information through wearable devices such as Google Glass and assembly lines are seeing more humanoid style robots being deployed. For example Foxconn plans to deploy more than a million humanoid robots to support their contract manufacturing operations around the world. Finally there are drone devices, despite some early PR opportunities from Amazon and their drone based delivery service I think we are a few years away from this type of service entering the market, however drones do have a potential role to play in the service and maintenance area. From a technology point of view we are now entering the so called fourth industrial revolution where nearly every device will be connected to the internet and allow almost continuous data streams to populate in memory databases such as SAP HANA. The Internet of Things (IoT) is likely to transform the manufacturing sector over the next few years and this is an area that I discussed extensively in an earlier blog entry. Companies will start to deploy more cloud based solutions to support their operations and social media tools will start to be embraced in a more widespread manner than they have been so far. The Future, Introduction of the ‘Smart Factory’? So where do we go next?, the IoT is going to transform manufacturing operations considerably over the next decade and CIOs around the world are starting to work out how they will embrace the IoT across their respective businesses. I think we will slowly move from digital manufacturing to ‘autonomous manufacturing’. Due to the sheer amount of connected devices and hence closed loop systems that will be deployed across a manufacturing organisation, we will see ‘Smart Factories’ start to evolve. This video from Bosch shows how advanced they are with respect to developing a smart factory concept. One thing’s for sure, the sheer volume of unstructured Big Data and Big Content that will come from IoT connected devices is going to grow exponentially over the coming years. If this information can be ‘harvested’ and analysed efficiently then quicker business decisions can be made to improve the overall efficiency of the manufacturing process. In future blog entries I will discuss how OpenText can help manufacturing operations manage all aspects of their digital enterprise.

Read More

More on Pitfalls to Avoid When EDI-Enabling Your Suppliers

EDI enabling

In my recent blog series, Six Pitfalls to Avoid When EDI-Enabling Your Suppliers PART 1, the first pitfall I highlighted was ‘Inconsistent message to your suppliers’. If other teams in the company, such as your buyers, are not on the same page with you regarding your EDI program, they may be telling suppliers that they can continue to receive orders manually rather than encouraging them to move to EDI. This effectively sabotages your initiative. Also, the management team may not all recognize the criticality of the EDI program to the business, and thus inadvertently make decisions that reduce the effectiveness. I’ve seen these situations occur in many companies where the right organizational structure wasn’t developed properly at the outset. Getting the right team in place, ensuring that they are all informed about the program and that they understand how it will affect their organizations will pay dividends as your program evolves. Some of the key elements of the EDI organizational structure to consider include: EDI Coordinator: The EDI Coordinator (title may also be EDI Analyst or EDI Project Manager), is an IT professional with in-depth experience in delivering EDI. They usually report to the IT Director and are responsible for automating the company’s EDI transactions with its customers, suppliers, financial institutions and logistics providers. They assist in managing corporate EDI projects and ensure that personnel abide by EDI technical standards. They are also responsible for performing data mapping and supporting EDI software, including the integration of EDI into ERP application solutions. This role may be filled from in-house or hired externally depending on the EDI resources available in the organization. The EDI Coordinator may manage a dedicated team; or, it may be other personnel within the IT team that are required to complete various tasks. Dedicated EDI Team: The EDI team is responsible for the implementation and support of the EDI system, including: Daily production support, monitoring, and resolution of issues in the EDI environment Map changes to support data file mapping requirements across all logistics business areas, i.e. Sales, Transportation, Warehousing, in support of business process needs Working with applicable business units, IT staff members and business partners Analysis and documentation of EDI interfaces as required Setup and testing with each business partner to ensure that 1) the communications between your system and the partner’s system is successful 2) the document exchange complies with the EDI standard and the company’s business rules Troubleshooting when anything goes wrong Steering Committee: This committee typically consists of department heads of line-of-business units, the director of IT, legal representatives as well as the EDI Coordinator. Educating them and their organizations on the goals of the EDI program, how it will affect their processes and the benefits that can be expected will help ensure understanding and ongoing buy-in across the company. Furthermore, it will aid in providing a consistent message to your business partners on how EDI fits into the business process and why it is so critical. Senior Management Sponsor: As with any major IT program, senior management commitment is critical for success. When new projects arise, such as an ERP upgrade or consolidation, the Sponsor can help to ensure that resources are available, thus ensuring that your business-critical EDI initiative is not jeopardized. For a comprehensive list of the steps you should complete for each phase of your supplier enablement program, along with a description of each step, download this useful Supplier Enablement Program Checklist.

Read More

How to Avoid Pitfall #6 in your EDI Supplier Enablement Program

EDI supplier enablement

In my blog, Six Pitfalls to Avoid When EDI-Enabling Your Suppliers – PART 2, the sixth pitfall I highlighted was “Insufficient planning for supplier communications.” As part of your supplier communications plan, you will need to send a series of communications, most likely in the form of emails. Preparing complete, well-thought-out email templates for communication will help to reduce the number of calls for support that you would otherwise get from your suppliers further down the line with your programs. Before you start, take a look at this checklist for supplier enablement. The first email in your series should provide suppliers with an introduction to your EDI program. You will send this introduction to each group of new suppliers you want to add. It should include: The goal of the program for your company – such as improved productivity, better customer service, greater efficiency The benefits that participation will deliver to the supplier – such as faster payment of invoices, potential to become a strategic supplier that will enjoy increased business, the opportunity to continue to get your business How to learn more about your EDI program – such as a link to a website where additional materials may be found, registering for a webinar during which you’ll describe more of the plans and details, the contact to call for answers to questions Timing requirements – it’s best to include a deadline by which some action must be taken or a process completed. Also, if applicable, it should include consequences of non-compliance. Next steps – Should the supplier contact a specific person? Complete a survey or form? Update a website? Register for a webinar? As with all your communications, the email should be concise, accurate and informative. Furthermore, it should be written with your supplier’s perspective in mind. For example, if you’ve done a supplier survey and you’ve identified a list of suppliers that would be good candidates for a web forms-based solution – either because they don’t have the resources to invest in a full EDI solution or the timing is not right, but you still want them to participate immediately – you need to provide the information about the forms solution. And as a reminder, you may find this Supplier Enablement Program Checklist a useful tool. It provides a listing of the detailed steps you should complete for each phase of your supplier enablement program, along with a description of each step.

Read More

Six Pitfalls to Avoid When EDI-Enabling Your Suppliers – PART 2

In this blog, I’ll continue by sharing some more common mistakes I’ve seen companies make when onboarding suppliers. I’ll also discuss some of the ways that you can avoid them. If you missed part 1 of this series, you can find it here: Pitfalls to Avoid When EDI-Enabling Your Suppliers – PART 1. And here’s a link to a handy Supplier Enablement Program Checklist to help you do it right! Pitfall # 4: Lack of simple EDI solution options available for your suppliers Some suppliers may not have the requirement for a sophisticated EDI infrastructure, while others may lack the budget, expertise or resources. Those suppliers will therefore not be able to participate and you will miss out on the incremental ROI from each supplier that is added to your program. However, you can address this challenge. SOLUTION: Remove the barriers to supplier participation by providing suppliers with a range of EDI options that are genuinely easy-to-use. And, avoid any that require them to do a lot of data entry. Options available in the market today include customized web-based forms, direct integration with Excel or suppliers’ preferred accounting software, as well as simple-to-use EDI software and hosted cloud options. These Internet-based options are available worldwide, so if your company wants to expand, leveraging other markets, including emerging markets, you can now utilize EDI to communicate electronically everywhere in the world, despite the complexities of different time zones, regulations and languages. Pitfall #5: Your suppliers think it costs too much to participate in your program As inexpensive as you may think an entry-level EDI solution is, your supplier may not agree and thus refuse to make the initial investment – especially if they don’t understand that there is a payoff for them too. SOLUTION: Consider removing this barrier by funding the entire program for your small- and medium-size suppliers with a B2B integration service provider. That should speed supplier participation and result in an earlier payoff for you that can more than cover the costs associated with the development of the customized solution and the subsequent transaction fees. Or, at least help to educate on the clear value of the program to suppliers! Pitfall #6: Insufficient planning for supplier communications Once your program goals have been determined you need to communicate, communicate, communicate with your suppliers. If you don’t anticipate their needs and questions, you’ll be inundated with calls for clarification and support. SOLUTION: Develop a solid communications plan using a variety of tactics appropriate to each implementation phase to ensure that your message is clear and available to your suppliers when they need them. Examples include education via email/webinar/face-to-face meetings, special website with Frequently Asked Questions, a series of emails to urge progress, special testing documentation. Also, be sure to regularly review reports to track supplier progress and address issues as they arise. Above all, make sure they are written from the supplier perspective, not just yours. It can help to work with your service provider here, to ensure the messages you send are valued by your suppliers – after all, service providers do this every day of the week, so use their expertise and help! It’s really true that today it is possible to get to 100% participation of your suppliers in your B2B initiatives and benefit by streamlining your procurement, receiving, invoicing and payment processes. But, you need to properly prepare for your supplier enablement program. You may find this Supplier Enablement Program Checklist a good tool to help you do it right!

Read More

Shoe Shopping, Supply Chains and One Very Happy Customer

 Followers of Gartner’s yearly Supply Chain Top 25 list may have noticed signs of progress over the last few years toward a responsive, demand-driven supply chain. As a student of the supply chain, I watch to see who makes the list and what market advances it highlights for suppliers and retailers. Last week though I got to experience the progress firsthand. An Omnichannel Supply Chain in Action Gartner’s list identifies 25 companies that “best exemplify the demand-driven ideal for today’s supply chain” and shares their best practices. There are some remarkable advances being made by supply chain leaders — whether or not they are on the 25 list — and sharing best practices is a good way to improve across the industry. And while all boats rise with a rising tide, the seas are much more turbulent these days in our omnichannel world. Supply chains need to align or get caught in a new perfect storm. Consider this scenario: You’re walking through the mall and see the perfect pair of shoes. You know, the ones you noticed on the fashion website and then on your Facebook page (because Facebook always knows what you are thinking). There they are in the store window on sale, so you pop in. You ask for your size in black to go with a new suit you just bought. CATASTROPHE! They only have them in blue in your size. You try them on. They fit like a dream and look great on, so now you really really want them. They are no longer just an idea, they are your must have shoes but they are the wrong color. A decade ago a consumer who faced this out-of-stock situation at their retailer might be told to wait until the next shipment arrived, or a check might be done and a suggestion made to visit another store location. More recently, the consumer might have gone online, found the shoes and perhaps purchased them from a different retailer. Consumers expect more these days and retailers have to step up to a seamless customer experience in order to keep the sale and maintain a delighted customer. In this case the customer got exactly what she wanted and the retailer did too. Here’s the second half of how this scenario played out: The salesperson immediately says she can check for the shoe availability online. Yes, they have them and will ship no delivery charge to your home. They arrive within the week — right size, right color, same wonderful sale price! And yes they look fabulous with your new suit. Since I am a true supply chain geek, I wondered what went on behind the scenes in this scenario. Turns out the retailer in this story — Macy’s — has been investing over the past years in technology and approaches to optimize for omnichannel. They are outstanding in this endeavor and have been recognized by analyst and industry organizations alike for what they do and how they do it. The 30 Second Definitive History of Retail Supply Chain Excellence The retail industry was one of the first to embrace electronic data interchange (EDI) to automate and gain efficiencies in the supply chain. To this day EDI and its progeny continue as the backbone of the business networks that bring product from suppliers through to the point of sale — from ordering, packaging and shipping to payments and returns. Macy’s received an excellence in supply chain collaboration award from VICS (Voluntary Interindustry Commerce Solutions Association) several years back for a MyMacy’s logistics initiative to reduce complexity, cost and time required to process vendor routings. More recently, a Gartner survey reported Macy’s major supply chain focus as well as overall industry priorities had shifted from reducing costs to initiatives for customer satisfaction and growth. And last year it received the Customer Engagement Award for Digital Technology at the National Retail Federation’s Annual Conference. Underlying this journey for Macy’s and other leading retailers are the technologies that enable labor and cost savings, cycle time reductions, streamlined inventory management, improved cash flows and better decision making. That same technology is now being applied to drive end to end supply chain visibility. Much of supply chain execution these days is prefaced on visibility to track to consumer behaviors in planning cycles, and then to adapt inventory and fulfillment tactics to match demand at any channel. Adaptive Approaches Maximize Inventory at any Channel Seventy-eight percent of digital shoppers “webroom” — research online before heading to a store to purchase — according to a recent Accenture survey. Alternatively, some store trips lead to a digital purchase. The same study found that 72 percent of respondents “showroom,” or buy digitally after seeing a product in a store. Consumers have merged online and offline into a single shopping experience, and they expect retailers to align with that world view. Yet Accenture’s benchmark study of retailer’s readiness to deliver seamless customer experiences found 81 percent reporting absent or underdeveloped capabilities in tailoring assortment, pricing and shopping occasion to customer expectations across channels. Macy’s has been working to make sure those capabilities are in place, creating an agile supply chain to maximize to customer behaviors. It has built multi channel commerce strategies and made technology investments against demand-supply point combinations. For example, the buy/deliver shoe scenario described above might be one combination, another might be web order/store pick up. Macy’s is turning retail outlets into multi channel fulfillment centers. It are also fulfilling direct from their supply chain partner DCs (Distribution Centers). In a recent interview, Macy’s Group VP of logistics shared that Macy’s uses a combination of lean manufacturing and forecasting, along with an omnichannel strategy. It focusses on fulfilling customer needs through existing inventories instead of purchasing new ones. Macy’s customers are twice as likely as other online buyers to have researched a product in its stores before purchasing it online. And Macy’s cashes in on this: It makes sure that customers can place their orders anywhere, through any device. Macy’s is also investing millions with vendors, in joint decision making in the choice of “inventories that haven’t even … come into their possession.” The shoes in my earlier scenario were sent directly from the vendor, shipped to the consumer, “sold” to Macy’s. This required both a solid backbone and enhanced management capabilities to keep better track of real time perpetual inventory levels and dynamically allocate inventory across channels to match ever changing customer behavior and demands. Same Day Delivery May Be a Battle, But Profitable Customers Win the Day While Google, Amazon and Walmart have focused on customer shopping behaviors and battling over shorter and same day deliveries, forward looking retailers will ultimately need to focus on winning “profitable customers.” In his recent blog post, Gartner analyst Robert Hetu shared his own supply chain shoe story. He pointed out that in the pursuit of multichannel excellence, “one of the most challenging aspects has been accurate and flexible inventory that can be maximized to meet customer demand regardless of channels.” Robert ordered two pairs of dress shoes from macys.com and they arrived simultaneously at his door — one pair came from the Galleria Mall near Pittsburgh, Pa., while the other came from Willowbrook Mall in Wayne, NJ. “Flawless execution of an e-commerce order fulfilled from store inventory and shipped to my door. And the shipping was free! I am a delighted customer.” Robert wrote about the next challenge for high performing supply chain companies: After years of perfecting a supply chain that delivers to stores retailers are faced with an entirely new challenge. Supply chain optimization along with assortment optimization, are two critical elements of the go forward multichannel strategy. The complexity of layered costs will require a new way of accounting and assessment at a customer level. The question is how profitable am I as a customer of Macy’s?” In the End, It’s All About the Shoes I have no doubt that we will continue to see paradigm shifts in supply chain strategies. I’d like to end this article with some thoughts on the amazing results that supply chains like Macy’s are achieving in the new world of omnichannel retailing, and share my prescient remarks on the challenges ahead. But at the moment all this supply chain talk is just background noise, because I really need to go try on my new suit with my truly AMAZING new shoes!

Read More

Regulatory Matters: Why the FDA cares about your spam emails

 Does anyone read the emails in their spam folder? If you did, you would most certainly find emails from online pharmacies based abroad advertising Cialis, Viagra, and other well-known pharmaceutical brands, available sometimes without a prescription. These medicines are often counterfeit, stolen, or expired and represent a major threat to global health. Activities from counterfeit medications are estimated to cause thousands of deaths globally and generate between $75-100 billion annually (representing about 10% of global pharmaceutical revenue!) There are many reasons why adulterated drugs are so prevalent, but the main reason is perceived cost savings by the consumer. As I spoke about in my last blog entry, securing the pharmaceutical supply chain has become a major focus of the US FDA. With the passage in late 2013 of the Drug Quality and Security Act (specifically Title II, entitled Drug Supply Chain Security Act), the US Congress has outlined the plan over the next 10 years to develop and build an “ electronic, interoperable system to identify and trace certain prescription drugs as they are distributed in the United States.” These “track and trace” laws, as they are commonly known, are part of an ongoing effort over the past 30 years to establish a federal track and trace system. This law in particular will allow the FDA: · to enable verification of the legitimacy of the drug product identifier down to the package level · enhance detection and notification of illegitimate products in the drug supply chain · facilitate more efficient recalls of drug products (1). Along with other laws, such as FDA Safety and Innovation Act (FDASIA), the FDA has been granted broad powers to investigate instances of counterfeit and illegally diverted medication, conduct seizures, and levy fines. In a recent demonstration of enforcement this past May, the FDA worked in conjunction with Interpol and law enforcement, regulatory agencies and postal authorities from 111 countries to seize over 19,000 packages containing illegal prescription drugs obtained through online pharmacies, in Operation Pangaea VII (2). This was followed in June by the FDA’s shutdown of nearly 1700 online pharmacies and the arrest of 58 people and seizure of $41 million of counterfeit medications (3). While certainly a blow to online pharmacies, these operations highlight the severity of the problem. Certainly, this isn’t the first attempt to establish an electronic track and trace system. A 2006 compliance document on the Prescription Drug Marketing Act of 1987 defined the concept of an ePedigree document to accompany a drug which incorporates manufacturing and distribution information and is amended by each touchpoint along the supply chain. In 2007, EPCglobal, a global standards organization, ratified an XML standard (EPCIS) to enable electronic transmission and appending of drug information, as well as allowing for serialization. However, most states which currently mandate Pedigree information allow for a variety of formats, such as text files, spreadsheets, and PDF. California has adopted the EPCglobal XML standards which will be phased in starting January 2015. Given the size of the California market, this will likely be the de facto national standard until the FDA releases its own standard in the coming years (4). So what does this mean for pharmaceutical manufacturers and distributors? The implications are wide and far reaching, especially with billions of dollars at stake, and will require these companies to evaluate their IT infrastructure needs within their lines of business, particularly finance, quality, manufacturing, and distribution, as well as among their suppliers and vendors. By November 27th of this year, the FDA aims to publish draft guidance on establishing standards for interoperable exchange of transaction information, history, and statements in paper or electronic format. Whether this information will be stored within RFID, barcodes, or some other system is unclear. However, OpenText, with its ECM (documentation) and Business Network (EDI) solutions, is well suited to handle these types of information, regardless of whatever the standard ultimately turns out to be.  

Read More

Six Pitfalls to Avoid When EDI-Enabling Your Suppliers – PART 1

EDI enablement

If you’re like most companies that have initiated EDI programs – maybe as part of wider strategic initiatives to cut costs, improve productivity and obtain real-time visibility – you are likely to have been successful in connecting electronically with most of your largest suppliers. But, you may be finding it more of a struggle to onboard the masses of small- and medium-size businesses (SMB’s) in your trading community. This is very common, in my experience, but something that you really do need to fix, rather than avoid. You need to connect with these SMBs in order to maximize the value of your investment in your EDI program. In the next few blogs, I’d like to share some of the common mistakes I’ve seen companies make when onboarding their suppliers and discuss ways that you can avoid them. Also, I want to provide you with a handy Supplier Enablement Program Checklist to help you do it right! Pitfall #1: Inconsistent messages to your suppliers If others in your company – such as your Buyers – are not on the same page as you regarding your EDI program, they may be telling suppliers that they can continue to receive orders manually rather than encouraging them to move to EDI. This effectively sabotages your whole initiative. SOLUTION: Be sure to educate and obtain the buy-in of all internal stakeholders in your company who come in contact with suppliers. They need to understand why your company is moving to EDI, the benefits to them, the benefits to your company and also, importantly, the benefits to the supplier’s company in doing so. Also, they need to understand the steps that suppliers will need to take in order to participate. This way they can support the program by encouraging suppliers to participate at every opportunity. The time spent doing this education will produce real dividends in the future! Pitfall #2: No incentive for your suppliers to participate If your communications to your suppliers describe only the benefits that the EDI program will deliver for your company, your suppliers will be less likely to participate. SOLUTION: Your EDI initiative must be viewed as a win/win for both your company and those of your suppliers. The “stick” approach can work for some companies – i.e. “Do it or you won’t be eligible to be our supplier” – because getting the revenue from your orders may be reason enough for them to implement EDI. But, that approach won’t be good enough for most companies and is not the best way to work collaboratively with your partners! In my experience, an informative message to your suppliers that highlights the true benefits to both parties works best every time. If you can offer additional benefits, all the better – for example, offering suppliers the opportunity to be paid faster in return for receiving your EDI orders and sending EDI invoices is an excellent win/win message. If the supplier can then look forward to becoming a “preferred supplier” with the potential for additional business that status brings, and can also benefit from improved cash flow and shorter Days Sales Outstanding (DSO), a key performance metric within the supplier’s company, you will have a willing partner in your initiative. Pitfall #3: Outdated information about your suppliers For many companies, the information available about their suppliers is usually old and out-of-date. Frequently, the supplier list is in an Excel spreadsheet on someone’s PC. Even if it’s in a database, the information is still likely to be out-of-date, as there is rarely an efficient process in place to maintain this ongoing. When you notify your suppliers, requesting their participation in your EDI program, you need good contact information to start with! Without it, your program will languish and the ROI from your project will be delayed. SOLUTION: Survey your suppliers to collect their latest contact information as well as their level of readiness. For example, in addition to the contact name, address, phone number and email address, find out if the supplier has implemented EDI with another company. If so, record the company’s EDI address and communications and translation methods used as well. Ideally, you will also take advantage of new capabilities available today to store the fresh data in a single, centralized repository of supplier data that is easily accessible by all appropriate personnel. Ideally, make this one that enables suppliers to maintain their own information on an ongoing basis. In my next blog, I’ll highlight three additional pitfalls you should avoid. In the meantime, have a look at the Supplier Enablement Program Checklist, in which you’ll find a listing of the detailed steps you should complete for each phase of your supplier enablement program, along with a description of each step.

Read More