Home' MHD Supply Chain Solutions : MHD Spt-Oct 2015 Contents SME AND THE CONNECTED SUPPLY CHAIN
People have been talking about the
connected supply chain for a long
time now. So long in fact, that you
could be forgiven for thinking the practice is
commonplace. After all, everyone agrees there
are cost, productivity and efficiency benefits to
be gained by connecting a manufacturer with its
distributor and end customer, so they all know
where product is up to at any point in time.
And with all the stories in the media about the
Internet of Things making it easier to capture
information at every point from the factory to the
warehouse and beyond, surely everyone must
be taking full advantage of the opportunities?
In reality, there's a huge divide between
the practices of the largest manufacturing or
third-party logistics (3PL) enterprises and their
smaller peers. Many of the tools and technologies
required to connect the supply chain have
historically only been available in complex, tier
one-style software systems that cost millions of
dollars to deploy. And that has left Australia's
small-to-medium sized manufacturers and 3PL
out in the cold.
Fortunately, the situation is changing.
Connecting to partners along the supply chain
has become a practical possibility for any sized
organisation, thanks to the automation afforded
by combining modern warehousing and EDI
systems, along with scanning solutions capable of
working with the growing range of mobile devices.
The idea that EDI could be a game-changer
often surprises people, because it has been
around for so many years. But in that time, it
has become a mainstay of the industry. The
breadth and duration of its uptake across
small and large organisations has encouraged
software vendors to build new tools and to
give customers more control over their EDI
experience. As a result these days, with the help
of visual mapping functionality, it is possible for
users to develop their own EDI schemas.
How the connections make
for smooth ordering
The benefits of using these technologies to
connect supply chain partners can be seen in
the automation of processes, the corresponding
reduction in administrative work, minimised
opportunities for manual errors, and the improved
flow of information across multiple organisations.
Take the example of a distributor who places
an order with a 3PL via an EDI system. The EDI
software automatically acknowledges receipt
of the order, and confirms the stock is there
without any need for human intervention. Next,
as 3PL staff pick, scan and pass the stock
through despatch, more notifications are sent
to advise the distributor -- and perhaps the end
customer -- that the goods are now in transit.
In this fully automated process,
acknowledgements connect all parties, from
order to picking, from job generated to despatch
to final delivery. The only manual process or
human intervention required is the physical
movement of stock.
Importantly, advanced functionality within the
warehousing system enables the 3PL to build
reports on critical topics such as stock levels
on hand. They can also provide forecasting
information by incorporating data regarding
minimum and maximum required stock levels.
All of these reports can be scheduled to run at
stipulated intervals and automatically emailed, to
keep the manufacturer, distributor and customer
up-to-date at all times.
What is clear in this process is that the
warehouse, the EDI system and scanning are
key to both the beneficial automation and to
connecting all parties. Almost all the activities
that need to be documented and all the
workflow processes originate or pass through
the warehouse management system at some
point in time. This includes stock being received
into the warehouse, receipt of orders, picking,
despatch, and manifesting onto the truck.
The only significant part of the flow that
occurs outside the warehouse system is when
the goods finally arrive at the distributor's
premises and the recipient signs on glass to
acknowledge receipt of goods.
The connectivity described in the above
example is not unusual today. Among the
organisations I regularly deal with are compa-
nies of just 50 employees, who are using a con-
nected supply chain to successfully compete
with organisations of 2,000 staff. The smaller
company's advantage comes from the agility of
size, good warehousing practices, smart use of
scanning and automation, proactive reporting,
and integration with a reliable EDI engine.
These organisations shine because their choice
of technologies supports and connects all partners,
improving communication, collaboration, forecast-
ing and planning up and down the supply chain.
Robert Frandsen is the managing director
of InfoMotion. For more information visit www.
IT'S BEEN A LONG TIME COMING
MHD SUPPLY CHAIN SOLUTIONS --- SEPTEMBER / OCTOBER 2015
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