| Let's take a quick look and analyze your | | | | with a geographic solution. The dilemma of |
| position in the Supply Chain. You are either | | | | reducing cost is measured in time or |
| the one driving the truck, the one pumping | | | | transportation, with the scales continuously |
| the gas, or the one paying the other two. It | | | | pivoting to and fro. Sometimes the objectives |
| does not matter if you are a vendor, | | | | favor customer satisfaction, speed to market |
| supplier, manufacturer, dealer, service | | | | and the ability to deliver, while in other |
| supplier or customer, the cost of freight | | | | instances the burden favors the bottom |
| either impacts the amount you charge, the | | | | line.Fortunately there is an alternative. It |
| amount you are reimbursed or the price you | | | | is not about moving products more quickly, or |
| pay. It is safe to assume that you are the | | | | choosing the most economical method of |
| center of the universe for your personal | | | | transportation, or the geography. The new |
| Supply Chain and that suppliers and customers | | | | objective for business is moving items |
| revolve around your business. That was easy, | | | | less.For years companies have utilized |
| now let's move on.A zeitgeist must first | | | | computers and internal IT development to |
| understand how the threads of history have | | | | create sophisticated reports that measure |
| been woven to reflect the patchwork quilt of | | | | business according to antiquated rules. The |
| the current generation, and only then | | | | idea that generating forecasts for purchasing |
| endeavor to peer into the next. Let's take a | | | | and rotating inventory is based on the |
| moment to contrast emerging communication | | | | assumption that stock must be owned and |
| technologies as reflected with Supply Chain | | | | managed in-house. IT development has been |
| Solutions and transportation.The Pony | | | | used to provide expanded reports and |
| ExpressThe famous Pony Express operated from | | | | expedited processes based on existing |
| April 1860 to November 1861. The cost of mail | | | | procedures. This frequently results in a |
| was $5 per 1/2 ounce, later reduced to $1 per | | | | company investing millions of dollars to |
| 1/2 ounce. The quickest run took 7 days and | | | | improve algorithms that forecast purchases, |
| 17 hours to carry President Lincoln's | | | | increasing manual intervention to correct |
| inaugural address from St. Joseph, Missouri | | | | predictions in direct proportion to the |
| to Sacramento, California.In 1825, British | | | | number of variables. Not surprisingly, such |
| inventor William Sturgeon exhibited a device | | | | IT investments typically do not yield the |
| that laid the foundation for electronic | | | | desired bottom line results.Next generation |
| communications, the electro-magnet. By 1830, | | | | of Supply Chain Integration utilizes network |
| an American, Joseph Henry used Sturgeon's | | | | connectivity with multiple vendors to reduce |
| device to send an electric current over one | | | | freight, transportation, geographical |
| mile of wire which caused a bell to strike. | | | | boundaries and in some cases ownership. IT |
| By 1838 Samuel Morse gave a public | | | | development is focused on integrating |
| demonstration of an electromagnetic device | | | | partners in collective, secure and |
| that embossed dots and dashes on a piece of | | | | collaborative networks for shared visibility |
| paper. Five years later, Congress funded | | | | and planning. Data is moved more effectively |
| development to construct an experimental | | | | and efficiently than products, parts or |
| telegraph line. On May 24, 1844, the message | | | | parcels. Ownership transfers when orders |
| "What hath God wrought?" was transmitted from | | | | transmit, and inventory is managed in a |
| the Supreme Court chamber in the United | | | | manner that mitigates movement. Vendor |
| States Capitol to an office in Baltimore and | | | | Managed Inventory can be achieved |
| officially opened the first completed | | | | simultaneously with multiple vendors and |
| telegraph line. Western Union built a | | | | numerous customer partners through |
| transcontinental telegraph line in 1861, and | | | | sophisticated impartial third party |
| suddenly news by wire traveled faster and | | | | integrators. The exchange of products and |
| reached more people than the parcels by | | | | purchases can be replaced by a data exchange, |
| Pony.On March 10, 1876 Alexander Graham Bell | | | | creating total cost reductions that benefit |
| invented the telephone. Telephones quickly | | | | the bottom line.The next generation of Supply |
| surpassed telegraphs as lines were installed, | | | | Chain Integration can be achieved by major |
| because it brought instant communication and | | | | manufacturers, dealers, distributors and |
| connectivity to the common man. Instant | | | | service providers through third party |
| communication by phone quickly replaced Morse | | | | integration and common platforms. The |
| Code and Mail to stay connected.Consolidated | | | | greatest savings in the supply chain are not |
| Freight, Low Rates and SpeedIn 1907 James | | | | related to a truck, a plane or a warehouse. |
| Casey borrowed $100 from a friend to | | | | The greatest efficiencies in the supply chain |
| establish the American Messenger System in | | | | are coming from IT. Much like the impact of |
| Seattle, Washington. The 19 year old founded | | | | the telephone and telegraph to the Pony |
| his company on the principles of courtesy, | | | | Express, the Internet is providing the next |
| reliability and low rates. By 1913 his | | | | generation of improvements for our supply |
| company acquired it's first automobile to | | | | chain.This concept is already entrenched in |
| consolidate shipments and carry more goods. | | | | e-commerce. Individuals operating home based |
| In 1919 the company changed it's name to | | | | businesses are selling goods on eBay, |
| United Parcel Services, and in 1922 it | | | | procuring supply in direct proportion to |
| acquired a Los Angeles company with | | | | demand. It is not uncommon for individuals to |
| innovative "common carrier" services. In 1929 | | | | sell products on eBay that are acquired from |
| UPS was the first package delivery company to | | | | a local vendor or craftsman. The seller on |
| use airlines, serving all US states by | | | | eBay is the impartial third party integrator |
| 1978.On the first night of continuous | | | | between the supply and the demand, leveraging |
| operation In 1971, 14 Federal Express jets | | | | the convenience of the Internet to connect |
| delivered 186 packages overnight to 25 | | | | the interested parties. This is a very simple |
| cities. By 1981 Federal Express introduced | | | | example of using technology to minimize |
| the overnight letter and expanded service | | | | inventory ownership by maximizing technology. |
| into Canada. In 1985, bar code labeling was | | | | Imagine how much more effective the solution |
| introduced to trace packages. By 1995 FedEx | | | | can be for complex integration of multiple |
| acquires air routes with international | | | | suppliers with diverse geographic locations |
| authority to serve China. Ten years later | | | | and reduced transfer of inventory. This is |
| FedEx announces development of a new Asia | | | | the concept of the next generation of Supply |
| Pacific hub in China, and around the world | | | | Chain Integration.We are only at the |
| flights Eastbound and Westbound.The first | | | | beginning of this transformation. Some |
| recorded transcripts of a "Galactic Network" | | | | companies have already realized the financial |
| are attributed to J.C.R. Licklider of MIT in | | | | benefits of leveraging IT solutions to |
| 1962. In 1964 Leonard Kleinrock of MIT | | | | maximize and compress the supply chain. |
| published a book on the theoretical | | | | Recognizing and understanding this |
| feasibility of communications using packet | | | | transformation is the first step, what you do |
| switching rather than circuits. The concept | | | | with this knowledge is the next. Experts in |
| of open architecture networking was | | | | technology and supply chain solutions are |
| introduced by Kahn in 1972, and subsequently | | | | available to help guide you and offer the |
| became known as a program called | | | | secure buffer that is your link between |
| "Internetting". In 1991 Modems transmitted | | | | multiple vendors. The direction is not as |
| data at 14.4 kilobits per second. Speeds | | | | difficult as you may imagine. Trade in your |
| doubled to 28.8k by 1994, and eventually to | | | | microscope from studying your exchange of |
| 56k. Meanwhile, Bob Metcalf and David Boggs | | | | products or parts, and turn it in for your |
| had developed the Ethernet at Xerox Palo Alto | | | | periscope to data |
| Research Center (PARC) in 1973. Xerox, DEC | | | | exchange.____________________________________ |
| and Intel invested in development and agreed | | | | __________________Words of Wisdom"Technology |
| to make the technology free to anyone to | | | | is dominated by two types of people: those |
| build. By 1981 the technology emerged from | | | | who understand what they do not manage, and |
| the laboratory to the public as 3Com shipped | | | | those who manage what they do not |
| the first Ethernet Hardware. As the ability | | | | understand." |
| to move parcels overnight has improved | | | | |
| dramatically, so has the ability to transmit | | | | - Putt's Law"With leaders, the future calls |
| packets by increasingly high speed | | | | to them in a voice they can't drown out. The |
| connections.The Next Generation of Supply | | | | future is more real than the present; it |
| Chain IntegrationCommon approaches to | | | | compels them to act." |
| improving the supply chain involve faster | | | | |
| delivery or lower cost for transportation. | | | | - Marcus Buckingham, "Three Things You Need |
| Solutions are typically centered on | | | | to Know""Reinvention. What a quintessential |
| geographic locations of hubs, consolidated | | | | America idea. It's the frontier spirit. It's |
| carriers and maximized routes. In some cases | | | | Ben Franklin. It's Ralph Waldo Emerson, and |
| the response is a galleria of products and | | | | by God, it's Tony Robbins and Stephen Covey |
| processes housed in a consolidated campus, | | | | too. They all understand the American impetus |
| while another strategy promotes multiple | | | | and genius for wholesale self-reinvention. We |
| regional facilities for geographic | | | | survive by staring change in the eye, and |
| convenience. There is a common theme that the | | | | adapting. |
| supply chain is viewed as a freight problem | | | | |