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With the abundance of computers, PDA's, cell phones, and a myriad of other electronic devices, it is no wonder that consumers continue to expect more from their computers, service providers, telephone companies and even the automotive industry. Like the consumer, businesses are learning that information can drive their bottom lines lower. The faster and more accurately you can relay information within your supply chain, the quicker you will realize the benefits.

Information is core to the next generation supply chain process. A business needs to know its customer's sales forecasts in order to predict production levels, raw materials purchases, and inventories to stock. Mature industries similar to beverage or consumer product lines can afford to saturate the market more than the computer and automotive industries, where companies literally produce equipment that goes directly to second-market distributors. If companies like HP, Compaq or IBM fail to properly predict their sales forecasts, they either build too much of their product causing excess inventories, or build too little thereby losing their customers to competitors because of low supply. In the same vein, the automotive industry may encounter excess inventory with end-of-year close-outs selling for less than the sticker price, or struggle with a shortage from under-estimation leaving showrooms bare.

Software innovations have surfaced to help businesses solve the first wave of this dilemma. Enterprise Resource Planning (ERP) software helps businesses connect their sales forecasting software with their materials and production planning systems. In addition, the distribution, warehousing, transportation and financial departments may also be interconnected. For example, a sales order for 500 of product XYZ will generate a demand for the procurement and production systems, pushing higher volumes of data through the business cycle. When the raw materials are available, production begins. Upon completion, it is shipped to the customer. Once shipped, the customer will be invoiced and payment will be received. The entire process now has been integrated into one computer system allowing easier management of the supply and demand chains.

As Microsoft and other large corporations have learned, stick to your core competencies. Microsoft is a great producer of software. By outsourcing the manufacturing of their software, they have realized a gain of 11% in the process. Likewise, companies who once tried to become more vertical in the supply chain, frequently leaving their areas of expertise in the process, often spend more with less productivity. In addition, as businesses transfer segments of the supply chain to a third party, they disconnect their ERP solution, thereby relying on a manual method of phone calls to ensure deliveries without delays. However, if the data is not resident within your single ERP solution, you are lessening your view of the entire process; the ability to forecast, the potential for discovery, and the resulting management of potential problems.

By sharing data with your customers, you can send promised delivery dates to their purchase orders, confirming that they can meet their procurement and sales cycles. It can also enable you to react faster to changes, forecasting and order requirements as they change from either your customers or your suppliers. For high transaction B2B relationships, timely and accurate transfers of data become critical to the business. As important as it is to share with your customers, the same must also be extended to your suppliers. Sharing data with your vendors will allow them to respond to orders and changes on existing requirements. It also allows updates on outstanding and existing orders that have been transferred to the supplier. As you receive these updates, you are able to alter, modify or change them in accordance with production schedules and your customer's needs.

If you would like to learn more about E-Collaboration techniques and the potential it can offer your business or industry, please contact us.