“When suppliers don’t know what, when, and how many products will be
bought, they stockpile inventory.”
—Maha Muzumdar, Vice President, Supply Chain Marketing, Oracle
MAKING QUALITY CONNECTIONS
Of course, creating an information-driven business network
becomes more difficult as information proliferates. The
amount of data companies have to contend with is increasing exponentially, especially as these companies move from a
single-enterprise view to a business-network view.
Dealing with this growing volume of data becomes even
more difficult in light of data quality issues. Customer information, product specifications, and many other data points change
as people join and leave companies, developers build or acquire
new products, and governments modify regulations. If business
is now all about making data connections, then having an accurate, up-to-date source of information underlying the business
network is essential.
According to Muzumdar, most of these networks facilitate
three types of online relationships: transactional, information
sharing, and electronic collaboration. For manufacturers, transactional relationships typically begin with transactions involving
purchase orders and invoices. These relationships often progress
to information sharing as partners exchange everything from
product designs to production schedules online. Electronic collaboration is the final stage in most B2B relationships. It refers
to two companies leveraging each other’s IT systems to enhance
the overall customer experience.
Many companies involved in these initiatives cite back-end integration as their
greatest development challenge. Front-end transactions such as accepting orders
usually occur in seconds, but the back-end fulfillment cycle—which includes
warehouse, inventory, and manufacturing
systems—can take days or weeks to complete. That’s because the two parts of the
process are not always well synchronized.
To speed up those back-end processes, many companies are deploying integrated business solutions that
include front- and back-office applications. These types of solutions are most
effective when they are built using a
common technology stack anchored
by a robust and scalable database, a
complementary applications server, a
data warehouse platform with embedded business intelligence tools, and
extended supply chain management
systems. Oracle delivers the entire
package. Oracle E-Business Suite sim-plifies the integration process by coordinating multiple business functions,
from marketing and sales to manufacturing, order processing, fulfillment, and customer service.
MONETARY REWARDS
Open standards are especially important when it comes to
something as complex as rolling out a VMI program, which
includes transferring, modeling, and converting data to
an order format—activities that Clark says can easily take
six months to complete. In JOAG’s case, it took only three
months to deploy the Oracle demand management system
and associated data model.
JOAG projected a return on investment (ROI) of eight
months for the VMI initiative. In practice—thanks to the
alacrity with which one large customer embraced the program—it took only two months for the new Oracle software
and associated VMI functionality to pay for itself. “It has
been an incredible success,” confirms Clark. “The Demantra
product has been outstanding for us.”
According to Clark, this rapid ROI has been driven by escalating volume with its particular retailers. “We have seen direct
cost savings through reduced freight charges, greater staff efficiency, and an increase in quality,” he says. “These organizational
decisions have boosted our business, with minimal overhead
and no increase in labor.”
JOAG is also lowering its cost of sales,
thanks to less time spent administering
price protections on behalf of its retailers.
As JOAG moves stock more quickly, its
inventory is less likely to be affected by
price drops. Once again, it’s all about collaboration. Now that retailers are feeding
JOAG their point-of-sale data, JOAG can
react faster within its supply chain. “Instead
of taking a couple of weeks to react to a
situation, it might just take 24 hours,” concludes Clark. “The coupling of technology
and the sharing of information have been
huge for us. Our inventory turns about
three times faster at stores where we have
implemented this program.” <>
>>SNAPSHOT
Jack of All Games
www.jackofallgames.com
Year founded: 1990
Employees: 120
Oracle products and services:
Oracle Database, Oracle’s Demantra
Demand Management, Oracle’s JD
Edwards EnterpriseOne
Alcoa North American
Mill Products
www.alcoa.com
Annual revenue: US$23 billion
Year founded: 1888
Employees: 129,000
Oracle products and services:
Oracle Database, Oracle Inventory,
Oracle Manufacturing Enterprise
Suite, Oracle Manufacturing Discrete
and Shop Floor Management, Oracle
Quality, Oracle Finance and Cost
Systems, Oracle Advanced Supply
Chain Planning, Oracle Events Sup-
ply Chain Planning, Oracle Demand
Planning, Oracle Consulting
DAVID BAUM is a freelance writer based in Santa
Barbara, California.
>> FOR MORE INFORMATION
Oracle Supply Chain Management
oracle.com/applications/supply-chain-management.html
