On-demand supply network services rising up the manufacturing agenda

Over 50% of businesses have implemented, or are planning to implement, an ‘on-demand solution’ to manage their supply chain operations over the next 12 months. That’s the top line finding of a study by analyst Aberdeen Group with hosted supply chain firm Wesupply, now relaunching itself as a multi-tier supplier-to-customer online software and services organisation. The report, entitled ‘The On-Demand Tipping Point’, suggests that industries like food and beverage, logistics, engineering and parts of the building sector are looking to on-demand, intelligent supply chain services, as adjuncts to their ERP systems, for solutions – not their ERP systems. It also finds 65% of businesses expecting a return on investment in under a year from the approach, while 69% of existing users say they do so because its cheap to implement and run. Interestingly, 61% say they will abandon suppliers that do not trade electronically. Says Wesuply CEO Brian Marsden: “The report seems to draw one unambiguous conclusion for suppliers that are not yet e-enabled: gear up or ship out. There are no alternatives to remaining competitive in today’s demand-driven world.” Wesupply’s system seems to have moved on from a couple of years ago when, according to Marsden, it was probably trying to be too sophisticated. “Think of it as an intelligent supply network: sSo it can have customers, intermediaries, suppliers, suppliers’ suppliers, divisions – all with different integration and at different levels. It could be SAP, Oracle or some other ERP system, or a node might just be an RFID terminal. “We offer configurations for any of those so they can transact electronically and respond to what’s happening in the supply network, with business rules that aren’t locked into their ERP systems… Going on-demand isn’t about ERP systems any more: it’s project based across supply chains with business goals like dramatically reducing inventory holdings or working capital across a network.” Marsden sees on-demand initiatives as more than basic electronic trading, where the job is providing one-time connectivity and communications potentially with multiple customers. “People are now looking for automated rules, alerts and intelligence – like what is the impact of those transactions on me, and how did they affect my customer.” Why? Because integrating suppliers and customers into a single, real-time supply chain has obvious benefits not least since, with real-time information on shipments, suppliers and customers can plan more efficiently and everyone has one view of the entire chain from depot to depot. The conclusion is that supply chain management is now less about algorithmic optimisation, and more about streamlined, multi-tier, 360 degree execution – with kits implication of intelligence in the network itself. “The ERP players are going to have to get into this space,” he says. “They’re going to have to take on, buy or make this technology. But one of the keys is the service nature of this business, and traditional ERP companies aren’t used to that, or deployments of 60 to 90 days without mammoth consultancy, or SLAs [service level agreements] at 99.95%.” “The mystique of using on-demand SCM technology is disappearing, making it a viable alternative for companies at all levels of supply chain maturity,” confirms Beth Enslow, senior vice president enterprise research at Aberdeen Group. And she also reports that on-demand technology is gaining credibility among wider audiences, with 72% of businesses considering its use to improve sales and operational planning purposes (S&OP) – something that Marsden reports see a huge increase in. “On-demand services provide and excellent solution to that,” he says.