August 1999 | Commentary | Supply Chain Technology

Taking a Community Network Approach to the Supply Chain

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The increasing growth of e-commerce is not just augmenting normal business practice; it is changing how people do business and what kind of business they do. The necessities of global sourcing, global selling, global manufacturing, global logistics and global distribution have placed managing a successful business in a whole new context.

RockPort Trade Systems, Gloucester, Mass., "knows what to do when it crosses a border," says Sue Welch, CEO and president. RockPort Trade Systems is a software supplier for companies needing control over their global sourcing and supply. RockPort's software applications manage sourcing, purchasing, costing, logistics, and international finance solutions. Its customer base includes retailers, wholesalers, and manufacturers.

The RockBlocks system makes it possible for companies to intelligently select suppliers who can deliver the required quantities within the required time frame specified by the buyer. After the supplier ships the product, RockBlocks generates the necessary trade documents, issues letters of credit, and tracks the status of shipments, even across different modes. It can calculate landed costs and call up exception alerts.

"We are looking at trading communities," Welch says. "We are moving to RockWorld software, which is in beta sites now. This software will help a company build its own trading community on an extranet."

Here's how it works. When RockPort links up with a company such as Citibank, or an expeditor who is part of a trading community, it can create a template making the application useable for other customers. A typical company will recognize its community of banks, vendors, and suppliers. This is what their community will look like; this will be their extranet.

The community establishes how trading partners will communicate back and forth, and what will trigger data to be sent to a different partner. The extranet is usually focused around the trading community of one particular customer base.

"This is all well and good," says Welch, "but this typical company needs to reach out and beyond its extranet to participate in other company's extranets. The companies may play different roles."

Behind RockWorld is a three-component strategy. The first component is the application that runs the core business: sourcing, shipping, purchasing, costing, and financing. The second component is RockPortal, which pulls together all information for a company when it signs on. RockPortal lets companies know what they need to do, what they need to be alerted to, what their reports are, what the weather is, the state of the world, their partners, and the communications from them.

"We are now creating the ability for the company to go beyond its extranet to those other extranet worlds," Welch says. "For instance, Dansk, which is famous for its highly designed line of tableware, might say, 'in my community I play the role of manufacturer, seller, vendor and supplier. When I am sourcing, these are all the trading partners (brokers, banks, carriers) I deal with.

"'But I also can have another world where I am a customer buying from many manufacturers, and a second world where I am a seller and my community is my customers.' RockWorld will facilitate moving between these various extranet communities."

Dansk Inc. of White Plains, N.Y., crosses the border and then some. It distributes to more than 1,500 retail customers worldwide. This global scope involves the company with a network of suppliers in 40 countries.

Before it adopted RockBlocks, Dansk had "a multiple legacy system that included spreadsheets and file folders among other scraps of paper," recalls Ken Bausch, assistant vice president of information services at Dansk. "We did not have easy visibility to information on actual landed costs. Our legacy system was built in the early 1980s. It was a custom procurement system using an IBM system 38 that was ported over to an AS/400. It was a sophisticated system for the era."

Dansk's legacy system in the late 1990s, however, was not helping it provide efficient customer service and response, especially with its heavy involvement in global sourcing, purchasing, and distribution processes. By implementing the RockPort system, it was able to put all its information in one coherent place. Dansk's partnership with RockPort allows it to source products more effectively, better ensure on-time deliveries to customers, and, most importantly, keep close track of its complex supplier relationships.

RockPort's RockBlocks "contains information about alternative suppliers, customs regulations, and shipment status," Bausch says. "It allows us to make the best decisions about transportation costs, and we can determine true landed cost against our estimated landed costs.

"Dansk has a wonderful group of people, but one of the challenges we faced as we grew our business was that these people were forced to work very hard and very long hours," he says. "We wanted this same team of people to do an even greater volume of importing. Our relationship with RockPort is not a story about fewer people, but about the same team being able to do more, and being able to spend time on value-added activities instead of chasing down paper."

For details about RockPort Trade Systems, visit its Internet site at www.rockport-trade-systems.com.

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