May 2002 | Case Studies | I.T. Toolkit

Transentric: Filling in the Blanks

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A new supply chain tool promises a broader and more detailed view of inventory.

People kept complaining to Roger Urban about black holes—those spots in the supply chain where inventory drops out of view. Those are the gaps that keep you awake at night because you're sure of only three days worth of incoming materials, or you don't know where your goods are once the truck pulls away from your dock.

Software developer Transentric, St. Louis, Mo., hired Urban's market research firm, Urban Wallace & Associates, to quiz supply chain managers about their major problems. Once Transentric knew what those problems were, it could develop a new product to solve them. The crying need, Urban found, was filling in the black holes.

"Supply chain managers told us, 'If we could have the total picture, instead of the partial view, we could change the way we manage,'" Urban says. Armed with current, detailed information about goods on order, in transit, and in storage, companies could make better logistics decisions and shrink their inventories.

Three quarters of the managers Urban contacted said they lacked good information because their management systems couldn't share data. An equal number reported that information they received didn't provide enough detail.

To address needs of that kind, earlier this year Transentric introduced its latest product, ItemVision. The web-based visibility tool collects data from a company's internal systems, and from its trading partners, to build unified, SKU-level status reports on all goods in the supply chain. Several prospective customers are running pilot implementations of the system.

Coming and Going

"We set out to provide supply chain managers with complete visibility of product—coming at them and going to customers," says Ken Olsen, vice president, supply chain management, Transentric.

A subsidiary of Union Pacific Corp., Transentric has provided electronic messaging services to shippers for many years, as well as software for supply chain management. The same messaging network pipes data into ItemVision from multiple sources.

"ItemVision takes relevant events and information from a warehouse system, or a tracking system, or a purchase order system, as well as from suppliers, customers, and carriers," Olsen says. "It aggregates, reconciles, and updates that information to provide a complete product picture for users, giving not only quantities, but what products are coming at them, and where those products are."

The system receives data in ANSI X.12, eXtended Markup Language (XML), flat files, e-mail, or other formats, then translates it and matches it to corresponding data from other sources.

"I might call a particular product XYZ-1, and you might call it ABC-123, and it's actually the same item," Olsen explains. "ItemVision reconciles the two so you're able to see how much of that item you really have, irrespective of how it might be rendered by different trading partners."

Sum of the Parts

ItemVision can also match partial information from two sources to build a single picture. For example, it might receive word that a company has sent a purchase order to a vendor, but it can't find that vendor in its database, says John Cooney, senior director of product design, Transentric. Even though the information is incomplete, the user can view the order's status.

When more data arrives—perhaps a message that the company has received the order—"we take all the address information from that transaction, marry it with the vendor that was on the original purchase order, and administer that information across both of them," Cooney says.

ItemVison provides information through both reports and alerts. Users can create standard reports or construct reports on the fly. They might also, for example, look at product availability by SKU on a daily or weekly basis, Olsen says, or compare a carrier's promised and actual transit times by lane.

Users can get a snapshot of a specific item, including units currently on order, in transit, in inventory, or committed to customers.

"They can just click on any of those options, and drill down into more granular detail," Olsen says. "Users can see the information aggregated by geography, division, or however they want to see it."

ItemVison sends an alert when it detects a condition that falls outside a pre-defined set of parameters, perhaps when inventory falls too low or a delivery falls behind schedule. "Users have the ability to define approximately 40,000 unique combinations of situations that could trigger alerts," Olsen says.

"The system monitors the supply chain, and if it detects a condition that the user wanted watched, two things happen," says Cooney. First, ItemVision records the event, so that everyone who is authorized to view that information will see it when they log into the system. Second, "if the user has requested to be notified, the system will send an e-mail," he says. Individual users choose from among available alerts to receive only those they want.

In the interest of collaboration, a company using ItemVision can grant its trading partners access to relevant data through the browser interface. "When all partners look at the same information in real time, you can reach decisions a lot faster," Olsen says. When a storm strands a trailerload of components in transit, a manufacturer and vendor can view the facts together as they talk on the phone about other ways to get supplies to the plant.

By providing a broad and detailed view of inventory, ItemVision offers two major benefits, Urban says. The first is certainty. "Better information reduces variability and risk. Then you can reduce the inventory"—which, of course, is a main objective for many supply chain managers.

The second benefit is that sound information paves the way for sound decisionmaking. Urban calls this "event-driven response." If supply chain managers have a detailed picture of inventory, "they can relate that to sales, sales forecasts, or production forecasts," he says. They can also respond quickly to unexpected events—weighing the alternatives when a train is delayed or a customer doubles an order—based on specific, current data on inventory levels in different locations.

Interested in Optimizing?

One thing ItemVision doesn't do is run through those what-if scenarios on its own. The system doesn't need to, says Urban.

"Supply chain managers are not interested in optimization," he maintains. If they can just get their hands on solid data, they can draw useful conclusions by themselves.

Transentric eventually plans to add analytic capabilities to ItemVision. "Typically, one of the problems with good modeling and simulation is getting the data," Olsen says. "If Transentric has that information and warehouses it, we're in a good position to leverage the information and add modeling capabilities."

Mining Events for Planning

Already, ItemVision can provide the raw materials for activities performed within other systems. "We are in a good position to feed planning systems," Olsen says. "The system provides a repository of good, actual events that supply chain managers can mine for planning purposes."

Also, "the underlying messaging layer allows the system to be connected on an application-to-application basis," Olsen says, and trigger an action in another system—prompting an order system to issue a purchase order, for example.

Paying the Cost

Transentric offers ItemVision mainly as a hosted solution, operating the system on behalf of customers who access it over the Internet. The user pays a monthly subscription fee based on the size of the implementation—essentially, the number of facilities and trading partners involved. If, however, companies want to license the software and host it themselves, they can do so as well, Olsen says.

The "hub" company's trading partners pay nothing to participate. Transentric takes charge of connecting them to ItemVision and training their end users.

There's a good chance that at least some of a company's partners already have the necessary links in place. "Because we have been a value-added network (VAN) for so long, we have more than 8,000 trading partners already connected," Olsen says.

ItemVision is not the first Transentric product to offer a panoramic view of inventory. The earlier offering that is most similar in concept is VINVision. Transentric developed this with Union Pacific to track vehicles by their vehicle identification numbers (VINs) as they move from auto assembly plants to dealerships.

Another system, BulkVision, helps companies that ship or receive bulk commodities monitor actual and expected inventories. And yet another, ShipmentVision, aggregates information on goods moving with multiple carriers, via multiple modes.

For all these systems, the overriding goal is the same—to keep black holes from swallowing critical logistics data.

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