January 2000 | Case Studies | I.T. Toolkit

Logistics IT News for the New Year

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Here are several recent Logistics Information Technology solutions and newsworthy events.

The Price of Promises Broken: An Argument for Investing in IT

Logistics and supply chain management is all about fulfilling obligations and living up to customer expectations, whether that customer is your direct customer or your customer's customer twice removed. From the White House to the warehouse, 1999 left us with images of broken promises. E-tailers such as toysrus.com, which committed to deliver holiday orders by the Dec. 24 Santa Claus deadline only to retract the promise in the 11th hour, lost immeasurable credibility. It's the kind of business disaster that is impossible to gauge in dollars and cents.

The Federal Trade Commission (FTC), however, has made it easier for companies that fail to deliver to understand their shortcomings in literal fiduciary terms: Internet merchants that fail to ship orders within the time frame stated will be fined $10,000 per violation.

The policy is merely a reiteration of the FTC's Mail or Telephone Order Merchandise Rule that was instituted in 1975, but it will hit many e-commerce merchants where they live and breathe. At that rate, a mere 100 violations could cost the equivalent of a $1-million IT solution. Every successful e-tailer knows it only takes a few minutes to tally 100 orders during peak holiday season.

Partnerships for Build-To-Order Procurement and Collaborative Web-Centric Solutions

SupplierMarket.com is an Internet marketplace based in Waltham, Mass., for buying and selling built-to-order industrial manufactured products. Efinity Inc., Aliso Viejo, Calif., (www.efinity.com) is a provider of web-hosted supply chain management solutions. These companies recently joined forces to provide end-to-end, web-based solutions for the procurement of build-to-order manufactured goods.

The partnership seamlessly links the two Internet sites to offer both procurement capabilities and visibility to order fulfillment. The objective is to provide a total web-based solution where customers can locate new suppliers to support their supply chains, and where trading partners can share business data in real-time exchanges.

In another notable alliance, Datasweep Inc., San Jose, Calif., (www.datasweep.com) and webPLAN, Kanata, Ontario, (www.webplan.com) merged their offerings to deliver online visibility to manufacturing shop floors and collaborative web-centric supply chain solutions.

For Datasweep, which develops solutions that allow high-technology manufacturers to customize products and track production information across the extended manufacturing supply chain, webPLAN facilitates real-time supply chain communities where Datasweep customers can conduct business transactions with their suppliers. The association with Datasweep provides webPLAN customers with visibility to units on the manufacturing shop floor so they can execute changes and provide more accurate order fulfillment commitments, scheduling, and forecasting throughout the supply chain.

Datasweep Inc. and webPLAN have merged offerings to deliver online visibility to manufacturing shop floors and collaborative web-centric supply chain solutions. webPLAN facilitates real-time supply chain communities where Datasweep customers can conduct business transactions with their suppliers. This provides webPLAN customers with visibility to all units so they can execute changes more easily.

3PL Services Embedded In B2B E-Commerce

Federal Express has been doing it for years with small package delivery for B2C (business to consumer) retailers. Order products online and when you click "ship now" at the checkout screen the order automatically processes for Federal Express pickup and delivery. Schneider Logistics, a subsidiary of Schneider National, Green Bay, Wis., has been selected to provide the ship now services for PlasticsNet.com and iMark.com.

Comprised of both buyers and sellers for direct and indirect materials used in the plastics industry, PlasticsNet.com is the flagship electronic marketplace for Commerx Inc., Chicago, Ill. Commerx develops Internet marketplaces and provides e-commerce solutions for industrial processing markets. B2B (business to business) e-commerce is expected to increase from sales of $43 million in 1998 to more than $1 trillion by 2003, according to projections made by Forrester Research.

Schneider Logistics will instantly provide PlasticsNet.com customers with shipping options and rates based on the customer's desired transit times and defined shipping parameters. Customers will be able to track shipments from order placement to delivery.

Why did Commerx choose Schneider Logistics? The 3PL provider offered the ability to provide customized transportation, to aggregate and manage multiple transportation modes, and to bring savings to the web site's customers, says Chris Lange, vice president of operations for Commerx.

As a leading online marketplace for buying and selling used industrial equipment, iMark.com includes value-added services in its purchasing process. The site's buyer services are designed to help customers locate desired equipment and select the necessary support services to put the desired asset into production—including the transportation of the equipment to the assigned destination. "By offering transportation options, we are taking purchases to the next level," says Brian Magierski, CEO and co-founder of iMark.com. "We don't view the transaction as being complete when the deal is made. We want to extend any service customers need to make their experience complete."

iMark.com, a leading online marketplace for buying and selling used industrial equipment, has selected Schneider Logistics to provide "ship now" services, automatically processing online orders for pickup and delivery as soon as an order is submitted.

In addition to providing rates for multiple shipment options, all tailored to the customer's specified time requirements and shipment characteristics, Schneider Logistics has the capability to coordinate the removal of the equipment from the seller's site, monitor transportation through every mode necessary, and re-install the equipment at the buyer's site. The transparent link between iMark.com and Schneider Logistics facilitates end-to-end management for the life of the order.

Inventory Tracking Improves ROI

What happens when inventory is turning so often that existing systems can't manage the growth? Sounds like a great problem to have, but one that could conceivably cripple a company's progress.

When revenues doubled to $12 million in just four years, Wake Supply Company Inc., Raleigh, N.C., had to move beyond paper reports for inventory management to a real-time IT solution that would integrate its five warehouses with the main headquarters. Utilizing Prophet 21, a Windows NT-based system from Microsoft, the fast-growing distributor of vinyl siding, doors, and windows now monitors order entry, tracks the order's progression and impact on inventory levels, and evaluates which products are selling most rapidly.

After implementation, each warehouse gained control over inventory management, and the customer service department acquired desktop visibility into order status so they can respond immediately to inquiries.

Toysrus.com and other e-tailers that failed to meet Christmas delivery dates disappointed customers. The FTC now imposes a $10,000 fine for each missed delivery date, hitting e-commerce merchants hard.

The Brave New World of Intelligent IT

Computer Associates International Inc. (CAI), Islandia, N.Y., (www.cai.com) announced at the eBusiness Conference and Expo in New York last December that its e-business applications division, interBiz, will offer a library of intelliKITS to advance the concept of data mining.

Projected to be released mid-year 2000, the intelliKITS will provide organizations with an intelligence tool to predict the outcome of business initiatives. The software will monitor interactions in the business data and processes to look for abnormal situations. The intelligent selling point is that the system will predict changes and suggest actions to capitalize on opportunities or to avoid potential problems.

The first two intelliKITS are slated to address fraud detection and account delinquency. These will be followed by intelliKITS that will leverage CAI's expertise in supply chain management, financial management, and select vertical markets.

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