Killer Application.
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Greg:
If you are interested in i2 this you must read.
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(Excerpts from Info..week)
Killer Supply Chains
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Six companies are using supply chains to transform the way they do business
By Tom Stein and Jeff Sweat
Once a tactical matter of moving goods from point A to point B, supply-chain management has become a modern IT challenge that cuts across business relationships, application infrastructures, and corporate cultures. Companies as diverse as Boeing, Thomson Consumer Electronics, Dayton Hudson, Dell Computer, Eastman Chemical, and Home Depot have implemented supply-chain initiatives that are transforming the way they deal with suppliers, partners, and even customers. Their efforts are partly about improving efficiency and the bottom line--but they're even more about creating new opportunities for everyone involved.
For these companies, the supply chain is a powerful set of tools and philosophies. By exchanging information, such as inventory levels, forecasting data, and sales trends, these companies are reducing their cycle times, fulfilling orders more quickly, cutting out millions of dollars in excess inventory, and improving customer service. Retailers are leading the charge, but other businesses are right behind.
"Supply-chain management is all about having the right product in the right place, at the right price, at the right time, and in the right condition," says Roger Blackwell, a business professor at Ohio State University and the author of several best-selling books on the subject.
Many critical elements make up any successful supply chain. First, companies must learn to trust their business partners--an enormous psychological hurdle. There is a very real--and sometimes justified--fear that information sharing can turn into a competitive disadvantage. But supply-chain partners that exchange information on a regular basis are able to work as a single entity. Together, they have a greater understanding of the end consumer and are better able to respond to changes in the marketplace.
These companies also realize they must harness the power of technology to collaborate with their business partners as never before. That means using a new breed of supply-chain management applications--and the Internet and other networking links--to look at past performance and historical trends to determine how much product should be made, as well as the best and most cost-effective methods for warehousing it or shipping it to retailers.
Still, a real cultural transformation must occur inside and outside a company for any supply chain to succeed. Roles change, jobs change, and information must be shared, not hoarded. Implementing supply-chain management systems is costly, complex, and labor-intensive. The process isn't for the faint of heart--but the payoff can be lucrative.
The six companies described here have embraced the change. They say their future success relies on the strength of their supply chains, and they're building innovative systems that promise to radically improve the way they and their partners do business.
Boeing
Boeing Co.'s legendary production problems finally came to a head last year: In the face of unprecedented demand for its airplanes, the company's supply chain was grounded almost instantly.
Why? Boeing relies on hundreds of internal and external suppliers for the 5 million to 6 million components needed to build a large twin-aisle airplane. The goal is to put the right parts in the right airplane in the right sequence. But many of the parts often arrived late, throwing the whole process out of whack and idling half-built airplanes on the assembly line. As a result, in 1997 Boeing was forced to shut down two of its major assembly lines for a month and took a $1.6 billion charge against earnings.
Today, Boeing is radically restructuring its supply chain and production systems to make sure such problems never happen again. The company is finally phasing out its World War II-era technologies and investing heavily in new systems for enterprise resource planning (Baan), factory floor (CimLink), product data management (Structural Dynamics Research), forecasting (i2 Technologies), and product configuration (Trilogy). It's also building Internet applications to better communicate with its suppliers and customers.
The goal, says Martin Ritchie, director of Boeing's ERP Competence Center, is to start building planes the way Ford builds cars. "We need to make planes more quickly and more inexpensively, but we can't do that if each plane is produced as if it were a custom-made Rolls-Royce," he says. Instead, Boeing is moving toward a common production environment in which it starts building planes even before customers order them.
The benefits of the new system are enormous. For starters, Boeing will be able to rapidly increase the number of planes it produces. The company expects to build 620 planes next year, up from 228 in 1992. That means customers will no longer have to wait 36 months from the time they order a plane to the time it's finally delivered: Boeing Commercial Airplanes is aiming to deliver them in eight to 12 months. .......(continued)
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