Welcome to the premiere issue of Supply Chain Leader. In this inaugural issue, i2 Technologies heralds the next generation of supply chain management solutions and practices, which will finally allow supply chains to be managed cross-functionally for superior performance.
As was the case in all previous generations of improvement, new breakthrough technologies—service-oriented architectures and business process platforms—are enabling the practices of this new generation. I predict the impact of this new generation will equal or exceed that of previous generations enabled by material resource planning (MRP), enterprise resource planning (ERP) and advanced planning systems (APS):
- The MRP Generation applied the capabilities of large-scale computing to enable companies to calculate material requirements based on what was needed to achieve sales forecasts.
- The ERP Generation enabled the integration of supply chain transactions across the enterprise, powered by the new client-server technology.
- The APS Generation allowed for functional optimization, using large-memory computing. This resulted in dramatic improvements in optimization of factories, demand and transportation.
But now we're in a new, faster, more complex and more demanding world of supply chain management. Globalization has necessitated outsourcing and created a greater need for multi-enterprise planning and risk management, as well as for more dynamic forecasting.
The time has passed when a functional focus alone—on optimizing factory production, transportation management and demand forecasting—can be competitive.
Yet, the idea that a company can build anywhere and sell everywhere tugs at traditional notions of centralized versus decentralized organization and governance. It is now necessary to rethink and reorder workflows, process management, partnerships/alliances and business models—all requiring cross-functional supply chain processes.
Over the past five years, i2 has invested in developing the i2 Agile Business Process Platform, built with a service-oriented architecture and a software library of workflows (i2 Studio). Before the advent of service-oriented architectures, the systems-integration cost to assimilate data from a wide range of applications serving cross-functional processes was prohibitive. But with SOA, applications can be "plugged in" as services.
Likewise, until the development of a business process platform "engine," the customization of software workflows for an individual company's unique supply chain processes was impossible. Now, both those hurdles have been overcome.
What are the advantages? The workflows stemming from management processes take advantage of best practices in different industries, so they have a "built-in" expertise. They're also adaptable, so companies can customize them to their particular needs. And the combined capabilities of a service-oriented architecture and a platform engine allow data, applications and workflow processes to be integrated not just across one enterprise but across multiple enterprises, encompassing suppliers, channels and other strategic partners.
The opportunities for better supply chain management from these new capabilities are endless. Among the most significant opportunities are the ability to shape demand and achieve immediate visibility into data, leading to more relevant and current information, and, consequently, better modeling and forecasting, planning and decision-making. Now, forecasts and plans previously generated periodically can be created dynamically using streaming demand data.
Also, demand can be shaped based on supply chain contingencies engendered by man-made and natural events, supply and demand disconnects and competitive actions. The greatest benefits of these new capabilities will come in increased revenues and gross margins.
At i2, we're committed to continue our leadership in creating innovative, new solutions based on a deep and focused understanding of supply chain issues and processes and an insistence on pushing the bar upwards in achieving excellence and competitive superiority in supply chain management. Supply Chain Leader is not just a way for us to share our thought leadership with you; it's also a way to recognize your company's supply chain leadership in its own right.
—by Michael McGrath
