End-to-end delivery across the Web

There’s more to getting into e-business than designing a sophisticated Web site. Frank Booty finds that for manufacturers its all about ‘e-fulfilment’ and ‘e-synchronisation’ – and that means investing in integration within the plant just as much as throughout the supply chain The ideal world picture for end-to-end and top-to-bottom Web working for small to medium size manufacturers (SMEs) may soon turn out to be a real world picture. The picture? Web applications covering everything from an e-business enquiry, to providing an ‘available to promise’ (ATP) response, advanced planning and scheduling (APS to optimise the plan), suppliers (informed of material requirements/schedule changes), and the plan being executed (according to the Web set-up production plan). It would also include Web monitoring, with progress fed back by data capture/machine monitoring, and notification of production completed and despatched to the customer. It would appear that the manufacturing marketplace is entering a new era in supply chain solutions that look more like this – enabled by the advent of the Internet and Web technologies. The new goal is ‘e-business fulfilment’ with processes and information access by anyone, anywhere, any time. Manufacturing enterprise (ERP) and e-business software vendor SSI’s managing director Trevor Lewis says, “Now that demand can be captured faster than hitherto, all manufacturing and distribution processes must be agile enough to ensure fast demand capture is not beaten down or held back by chaos in the supporting logistics.” And this is the crux. Analyst Forrester Research predicts $1.3 trillion revenues by 2003 in business-to-business (B2B) activities – as do researcher Yankee Group and networks giant Cisco Systems, for example. Analyst AMR Research expects B2B e-business to reach $5.7 trillion by 2004, with industry leaders moving 60 to 100% of their transactions to the Internet as soon as 2002. AMR further rams home the point that those companies not taking an aggressive approach to B2B trading by preparing for digital Web-based marketplaces (trading exchanges, ITEs) and supply chains will lose customers and ultimately fail. And ‘ultimately’ might not take long. In its report How big is big? A pragmatic review of the $3 trillion B2B opportunity, Yankee Group believes e-marketplace ITE transactions will generate some $850 billion of the total $2,780 billion it expects in the B2B sector by 2004. Companies are expected on average to purchase some 30% (and in some cases up to 50%) of goods and services entirely electronically by that time. Simon Bragg, senior analyst at consultancy ARC Advisory Group, says, “E-fulfilment solutions - eFS - which are designed to improve a company’s order fulfilment capabilities, make up an immature but high growth market that only began to emerge in 1999. Such solutions will specifically enable companies with Internet sales to dramatically improve their e-business perfect order fulfilment metric.” This metric defines a perfect order delivery as “an order delivered on time, in the quantities ordered, with no unauthorised substitutions, and billed correctly”. ARC believes no supplier has a seamlessly integrated suite that encompasses the full set of applications needed to drive perfect order fulfilment. It regards the market as still emerging, despite being valued at $493 million in 1999. By 2004 ARC expects the e-fulfilment software and services market revenue to be worth $3,600 million. “Fast demand capture without fast demand fulfilment offers scant consolation to the customer,” observes Lewis. And beyond customer satisfaction, there’s another reason for getting it right: says Lewis, “Fully exploiting the B2B Web opportunity requires solutions which release the vast cost savings locked up in inefficient supply chains.” ARC believes this latter is all part of the enterprise-to-automation integration challenge, most notably happening in the process industries. Benefits it predicts include: 5—15% reduction in the cost of converting raw materials to finished goods; 10—20% better capacity utilisation; 15—20% more right first time production; a staggering 60—90% better adherence to schedules; 5% faster cycle time from order to payment; and 40—60% improvement in time to convert raw materials to finished goods. So how can such theory be put into practice? The consensus is clear. Get feedback from shop floor systems onto the Web. Feed in ATP details, finite schedule information and levels of orders, which the machine automatically picks up. And enable customers to look in via the Web at any time to check order status in a ‘self-service’ format. “Wrapping this altogether is smooth and quite novel,” says Lewis. “We have recently announced e-Tropos, the Web-enabled version of our supply chain solution range. What this enables users to do is to take Tropos into the extended supply chain, beyond internal systems and users, out into manufacturers’ business partners. We’ve added Nematon SCADA (supervisory control and data acquisition) compliant middleware – software sitting on any machine tool or process equipment, feeding data back into Tropos in real-time.” It doesn’t have to be Nematon software – it can be any process management software. As Bragg says, “ERP integration with plant floor systems, especially in the process industry, yields great benefits.” Ultimately, the system can provide throughput at the back end, detailing how items are to be shipped and when they are expected to arrive. It’s a complete closed loop from order to delivery – constantly monitored over the Web. “We thus have e-business fulfilment,” says Lewis. “It’s buy fast and sell fast over the Web. Making fast and delivering fast has hitherto meant you can’t always do full back office integration distributed for Web order entry. What we’ve done is compress the supply chain and significantly improve customer service by optimising the extended supply chain to make throughput times much faster.” So, is this theory being put into practice? Yes. Scottish company Don & Low takes polymer granules and weaves them into plastic tape which is then woven on the company’s 250 looms. Input is ATP and shop floor data in the form of bar code data from the looms, with finite scheduling. Input from the shop floor is through bar codes on the looms. Other companies following the SSI e-business fulfilment strategy include a manufacturer of paper products, a hi-tech machine component manufacturer for the aerospace industry, and a dot.com PC and computer delivery company. SSI can claim to be practising what it preaches, and is also on the final three shortlists in 20 other contracts. All in different manufacturing industries. As the world enters a new era in demand fulfilment enabled by the advent of the Internet and Web technology, SSI is proactive. According to work done by ARC, the growth in eFS will be high, practically 50% CAGR up to 2005 – nigh on the highest of all software industries. The only higher growth rates? Other software industries focusing on providing e-business solutions. That’s growth fed by astounding growth in e-business (B2B and business-to-consumer). As all marketeers worth their salt will opine: that’s win-win. All through the supply chain and beyond.