Supply Chain Integration

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