Don't think of it as a chain. Think of it as an intricate network of suppliers, distributors and customers who share information. Think you can do it? If so, it's not going to be easyWhen Dulux Australia began trying to capitalise on its spanking new, fully integrated procurement system by encouraging suppliers to link into its Ariba network, it found the work heavy going. In fact, national purchasing manager Rod Davies admits the company is still to "kick any goals" in its efforts to collaborate with suppliers under an initiative aimed at reducing costs through more effective purchasing.
With its suppliers developing their e-activities at their own pace, Davies says the entire process is taking much longer than he expected. Sure, many suppliers are developing their own Web pages and the capacity for customers to place orders on those Web pages, but Davies says it's not enough: Dulux is still asking for more than most are currently able to give. Encouraging them to go the extra mile eats up huge amounts of Davies' time, and at any rate suppliers need to be at a certain stage of readiness before they can hope to link up at reasonable cost.
Even those complications are but a comparatively small problem in the bigger picture: Dulux is but one company under the Orica umbrella and Orica is implementing a core strategic procurement program across all its business units - chemicals, plastics, explosives, Selleys and Incitec, as well as Dulux. To be optimally effective, the program will require every business unit to get all suppliers on board. That way, where products or services purchased are consumed by more than one business, spend can be aggregated to achieve a common approach to the market. It's a noble plan, but also a tall order. All-embracing enterprise software solutions, business process re-engineering, knowledge management and other IT trends have all essentially addressed the internals of the enterprise. The next promise of efficiency lies in linking the enterprise's internal systems to those of its suppliers, partners and customers. That requires levels of collaboration almost unprecedented in the history of trade. Some organisations have been quick to realise - and capitalise on - this fact.
"The shift to deployment of marketplace infrastructure is starting to draw the interest of those that want to take advantage of SCM collaboration to enable end-to-end business processes from the customer's customer to the supplier's supplier," says Gartner analyst Lora Cecere. "Leading enterprises are moving beyond the enterprise focus to undertake collaborative pilots, partner with vendors to develop more responsive applications in SCP (supply chain planning) and SCE (supply chain execution), as well as to develop and deploy industry standards that will enable true recombinant business models." Pundits predict collaborative commerce (c-commerce) will replace rigid one-to-one forms of electronic supply chain management, with applications allowing true Internet-based colla-boration and problem solving between trading partners and a wider trading community. Achieving the goal, however, will force enterprises to make strategic decisions regarding the structure of doing business and to overcome inevitable inertia while struggling to build new levels of trust with trading partners.
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