Return of the mage

Related tags Supply chain Supply chain management

Return of the mage
Simplicity and visibility are key as financial pressures prompt suppliers and retailers to work together using common systems, as Rod Addy discovers

Walt Disney's Fantasia cartoon featured a section based on The Sorcerer's Apprentice, music composed by Frenchman Paul Dukas.

Using his master's spellbook, the apprentice - Mickey Mouse - animates his broom to do his chores. All goes well temporarily - the obliging implement begins sluicing the floors of his master's tower with water from a nearby well.

But it can't be diverted from this single function. When Mickey tries to chop it up with an axe, he only succeeds in creating hundreds of brooms, drenching everything and flooding the building. Only the magician's return restores order.

Systems duplication has hounded the food and drink supply chain for years. With different companies adopting different software performing the same functions using slightly different business metrics, supply chain departments were left trying to restore order.

Welcome to the magician's return! Today's supply chain is about simplification, rather than duplication, and systems that deliver a quicker, broader overview of information than ever before.

Within this, visibility and access to single data pools are crucial. To this end, Inovis has launched a pilot initiative looking at sharing visibility in the ordering and payment process, minimising disruption through automation.

The industry has been traditionally reticent about sharing information. But Inovis says people are realising that further environmental and financial savings can't be achieved without co-operation, especially in today's economic climate.

Many firms are opting for software as a service (SaaS), where software suppliers host supply chain processes such as vendor compliance and ordering.

"It's a demilitarised zone between retailer and manufacturer - like the Switzerland of the supply chain," says Inovis's chief technology, officer Eric Huddlestone.

The approach holds everyone equally accountable, enabling strategic decisions based on trusted key performance targets.

Data consolidation supports the quest for greater control. "Software companies such as Oracle and Infor are working on service- orientated architecture (SOA)," says Alain Vix, marketing director at supply chain consultancy Hughenden.

Historically, internal IT departments had to write interfaces for every enterprise resource planning (ERP) system they dealt with, he says. They could ignore new releases, and risk being left behind, or rewrite the interface. "Software houses are now developing versions of [SOA] software that will be able talk to that other software," says Vix. "A plug-in solution means you don't have to build new interfaces every time you upgrade."

In tandem with SOA there's a move towards shared software using standard fields prompting firms to consolidate measurements on, for example, lead times and stock volumes.

The results help address situations where departments often don't receive certain figures, or get them late.

Isotrak's 3iS third party logistics integration service - launched in June - illustrates all this standardisation and consolidation. It condenses data from third party logistics systems, allowing total real time online control over delivery fleets. A job scheduling facility orchestrates driver movements smoothly.

Retailers, manufacturers and logistics providers share data on everything from vehicle fill to delivery and unloading times through 3iS, forging a single virtual fleet. Information is governed by the fleet operator and can be protected where desired.

Tesco and the Stobart Group have been heavily involved in 3iS trials, delegates heard at grocery think tank IGD's Sustainable Distribution 2009 conference in London.

"The statistics view screen ensures driver tracking and support increases in customer service levels," says David Pickering, Stobart Group operations director. The system plans vehicle routes to use all available truck space.

Tesco's transport director Alex Laffey says: "Visibility is key if you want to drive down costs and waste, remove fleet from the roads and reduce empty running."

With central, instantaneous data updates, empty vehicle space can be used better, cutting road miles, carbon emissions, fuel and truck maintenance costs. To date, Tesco has used the system to cut out 300,000 road miles and 400t of carbon dioxide emissions.

Of course, away from these overarching systems, the pressure to cut costs and carbon emissions keeps fuelling other developments.

What 3iS is to logistics, GE Fanuc Intelligent Platform's systems are to production-orientated enterprise solutions, while being fully compatible with Microsoft-based supply chain systems. Latest innovations include the June launch of Proficy Tracker 8.0, which manages the execution of orders and the flow of materials, aiding traceability. And the launch of GE Fanuc's PACSystems RX3i Controller allows mass data transfer at speeds 20 times faster than standard Ethernet connections.

Quicker, easier access to the latest information undergirds Foodvest's selection of TXT e-solutions TXTDemand and TXTPlan, part of its TXTPerform supply chain management suite. The demand-led system provides data supporting sales and operations planning processes, drawing on retail sales statistics, seasonal trends and promotional activity. "Our primary market lies in helping food manufacturers make better decisions around production, promotions, marketing and the impact on [total] volumes," says Richard Nicholas, TXT e-solutions UK sales director.

Tackling promotions and seasonal activity is a big part of Aldata's business with chocolate manufacturer and retailer Thorntons, which is heavily dependent on sales around key events such as Easter. "We're responsible for helping them gain realtime visibility for what's happening at a store level and we have achieved reductions of 45% in reduce to clear discounts and 35% in stock wastage," says Mark Croxton, md of Aldata UK & Ireland.

South African brewer SABMiller is also focusing on demand forecasting and resource visibility by rolling out Infor's Supply Chain Management (SCM) solution. The package is being deployed across its global supply chain and diverts production to optimum locations based on transport, production and inventory costs. SCM Advanced Planner handles reverse logistics, so breweries never lack empties.

All this visibility, simplification and total control doesn't detract from the responsibility of supply chain personnel to use it shrewdly. But what it just may do is turn them from apprentices into true magicians.

Dairy Dynamics

Meadow Foods is blazing a trail in dairy IT solutions by taking up the specially developed Fresh Dynamics module of Microsoft Dynamics AX's enterprise resource planning system.

The software enables the independent dairy group to manage quality control and trading issues across its premium milk business and dairy ingredients division. It can be integrated seamlessly into current production systems, offering easy plug-ins for future upgrades and covering all aspects of operations.

"Dynamics AX from K3 AX provides Meadow Foods with an obselescence- proof solution that is fully integrated and fits our business needs," says Damian McDonald, Meadow Foods's finance director. "Because Microsoft has put a huge budget behind the product, we are confident it will be around for 10 to 20 years and, therefore, we believe the system will grow with the company. We also believe this is one of the first implementations of Dynamics AX in the dairy industry."

Microsoft has recently upgraded its Dynamics AX system, releasing a 2009 version enhancing functions such as workflow, procurement and returns and service management with more modules in the pipeline. Processors will be able to buy K3 AX's core system and add modules where needed. They can also access information remotely via the internet.


Aldata 08453 717170

GE Fanuc 01327 322570

Hughenden 01494 535649

Infor 020 7404 9015

Inovis 01483 547900

Isotrak 01908 540700

K3 AX 01276 686555

TXT e-solutions 020 8834 1094

Related topics Supply Chain IT Services

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