Supply chain efficiencies definitely begin at home. Experts say organisations at the top of the supply chain must get their own systems working well before even thinking about linking with the IT systems of others. That's exactly the process being undertaken at Johnson & Johnson (J&J) Asia Pacific over recent times. Senior business analyst Chris Gladwin says the company has had a three-year project to implement SAP in conjunction with MerciaLincs Client Server (MLCS). It is now live with 12 companies in Asia-Pacific, all on a single SAP database and a single MerciaLincs Client Server database.
"So we have 12 of our J&J consumer companies linked, all using the same regional business model, and we have taken the attitude that this is about business process re-engineering rather than the implementation of software. So yes, we have implemented SAP and MerciaLincs Client Server in conjunction with the business process re-engineering, and the business process re-engineering was what was crucial to us," Gladwin says. "We said let's get it all bedded down, let's get our business processes in order, let's design them so they can work with the whole of Asia-Pacific, then let's get this thing called SAP and MerciaLincs in. We had the commitment from the highest level in the organisation and then were able to roll it out to 12 J&J companies across five time zones with five different languages, all on the one instance of SAP and one instance of Mercia. Now that's our base platform into the 21st century." Once the organisation does have its own systems working efficiently, the next step should be to agree with partners on governance issues.
Accenture's Gattorna says CorProcure is a good example of a collaborative network that failed because its 14 members couldn't agree on anything. He says an important lesson from recent experiences is that you can't take a dozen or so companies, as was done with CorProcure, put them in a collaborative marketplace and expect to extract the benefit that you can see on paper. "You get into a situation where you don't even get to square one because you're still fighting over the spoils you haven't even generated yet," he says. Gattorna is now advising clients to start with smaller clusters or perhaps just two or three companies - even one company that has several divisions - and get a little marketplace working. Once the technology is proven, the processes are working and everyone understands and sees the value, you can start to "spread out like a ripple", taking onboard other companies incrementally. "It is inexorable," Gattorna says. "The way the world works is that you've got a whole bunch of suppliers trying to talk to a whole bunch of customers. Even if you took five suppliers and five customers and worked out the number of links between them, the combinations and permutations would run into thousands, so you can imagine the spaghetti you've got in the middle.
"So the idea is to have some sort of marketplace in the middle that acts as a virtual company through which various communications pass. The world will be simplified by marketplaces, but only if you can agree certain business rules. That's really where we're at now: various companies are going back to the drawing boards and saying: ‘Why don't we just start off with two or three companies we obviously get along with rather than starting with a whole bunch of people who are outriders'. That's the big learning: you start small, and once it's working, scale up."
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