June 1999 | Commentary | Supply Chain Technology

A Supply Chain Alliance for Progress

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No single LIT vendor can meet every need of every user within the supply chain. But there's strength in numbers.

Paragon Management Systems, EDS/A.T. Kearney, Sun Microsystems, and Selectica have formed an interesting alliance offering a complete supply chain solution. Each company brings something vital to the table.

Sun Microsystems, Mountain View, Calif., provides the hardware, such as server technology, and ever-expanding Java. EDS and A.T. Kearney, Plano, Texas, provide supply chain management expertise. Paragon Management Systems offers Java-based supply-chain management optimization, and Selectica, San Jose, Calif., provides an Internet selling system.

The partnership offers users the opportunity to redefine their customer relationships within the supply chain through Web-based services, supported by a philosophy that recognizes the needs and business values central to specific industries.

"Supply chain expansion and optimization is the next frontier in competitive advantage," says Mike Atwood of Enterprise Solutions, the partnership between EDS and A.T. Kearney. "Companies need to see the entire supply chain if they are to make better decisions about speed, quality, customer service, and product innovation. This consortium allows us to provide that visibility."

Dr. Martin Hoffman of EDS, and the project leader, agrees. "Supply chain management can only work well if every company in the chain can actively and easily participate, sharing the same information and application functionality at the same time," he says. "This is what we provide over the Internet. To that end, we are creating scenarios that allow companies to 'rent' the capability, or pay on a transaction basis. That makes the solution much more palatable, affordable, and accessible by a company's total trading net."

"Paragon has aligned with EDS to provide a breakthrough opportunity for companies to minimize their total cost of ownership for supply chain planning and execution systems," says Nima Bakhtiary, vice president of marketing and alliances for Paragon Management Systems. "Paragon's plug-and-play and ERP-friendly decision support system will enable supply chain communities to collaborate in real time to respond quickly to orders, enhance customer satisfaction, shrink planning cycle times, and achieve supply chain visibility—all via the Internet."

The biggest problem companies face, Bakhtiary suggests, is linking all their IT systems together. The larger or more international the company, the greater the burden. That's why outsourcing is so attractive to so many companies.

Paragon is, at its core, an Advanced Planning System vendor. It has very specific targets, such as minimizing excess or obsolete inventory, reducing cycle times, optimizing delivery performance, and synchronizing the flow of product within and between plants. "Paragon's greatest value may be in its ability, while getting information from all systems, to make sense of the data; specifically the data that is customer driven," Bakhtiary says. "The information comes from the demand and the needs of the market."

Paragon's "brain" is able to handle and adjust to sudden demand or other exceptions from the customer. The system supplies the advanced planning and scheduling within which these changes can and do occur. This means that the order taken is optimized, and the enterprise can acquire maximum profit from the transaction.

"A company may have as its main objectives—depending upon where they are, what the order is, and what tools they deal with—customer satisfaction and profit optimization," Bakhtiary says. "Our solution helps the enterprise decide what it wants to accomplish, and determine its objectives? We provide a series of solutions from which companies can pick. That is at the planning level.

"There's a real difference between planning systems and ERP systems," he says. "We make sure the plan is as feasible as it can be according to reality. The execution follows the plan. When something goes wrong, we are able to identify remedies and solve those problems in order to keep to the committed schedule. We add predictability to the system, as well as the ability to communicate throughout the enterprise at its various levels and to its suppliers."

"What Selectica does is very crucial at the order-entry level," Bakhtiary says. "It has a good configuration engine that enables customers to configure products (a car's style, type, cost, and delivery date, for instance) through the Internet. Customers may configure their choice, get a quoted price and delivery date available to promise, and place the order.

"The system makes it possible to inform all those involved in filling that order—suppliers, manufacturers, financials, etc.—through the Internet. This shrinks the lead time from order to fulfillment, resulting in significant savings," he says.

Sun Microsystems, beyond its server technology, provides a very fast Internet server at a scale that can manage a great deal of information. Java allows the components of the supply chain to link very simply, flexibly, and securely over the Internet in a way that has them functioning as one operation.

EDS and A.T. Kearney add several aspects to this alliance. They bring all the right parties together and provide a set of integration standards for any specific industry. They then stand behind, support, and maintain this set of standards.

EDS acts as the glue in the relationship between vendors and users. It functions as the total systems provider, and calls on Selectica, Paragon, or others as they are needed. Drawing on its ERP expertise, EDS also coordinates the alliance partners with various ERP systems in conjunction with what the customer has or is getting.

Selecting a logistics information technology solution can be daunting. But, as this alliance shows, it's nice to have friends.

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