Information-Driven
Business Networks
Continued
Making Quality Connections
Of course, creating an information-driven business network becomes more difficult as information proliferates. The amount of data companies have to contend with is increasing exponentially, especially as these companies move from a single-enterprise view to a business-network view.
Dealing with this growing volume of data becomes even more difficult in light of data quality issues. Customer information, product specifications, and many other data points change as people join and leave companies, developers build or acquire new products, and governments modify regulations. If business is now all about making data connections, then having an accurate, up-to-date source of information underlying the business network is essential.
According to Muzumdar, most of these networks facilitate three types of online relationships: transactional, information sharing, and electronic collaboration. For manufacturers, transactional relationships typically begin with transactions involving purchase orders and invoices. These relationships often progress to information sharing as partners exchange everything from product designs to production schedules online. Electronic collaboration is the final stage in most B2B relationships. It refers to two companies leveraging each other's IT systems to enhance the overall customer experience.
Many companies involved in these initiatives cite back-end integration as their greatest development challenge. Front-end transactions such as accepting orders usually occur in seconds, but the back-end fulfillment cycle—which includes warehouse, inventory, and manufacturing systems—can take days or weeks to complete. That's because the two parts of the process are not always well synchronized.
To speed up those back-end processes, many companies are deploying integrated business solutions that include front- and back-office applications. These types of solutions are most effective when they are built using a common technology stack anchored by a robust and scalable database, a complementary applications server, a data warehouse platform with embedded business intelligence tools, and extended supply chain management systems. Oracle delivers the entire package. Oracle E-Business Suite simplifies the integration process by coordinating multiple business functions, from marketing and sales to manufacturing, order processing, fulfillment, and customer service.
Monetary Rewards
Open standards are especially important when it comes to something as complex as rolling out a VMI program, which includes transferring, modeling, and converting data to an order format—activities that Clark says can easily take six months to complete. In JOAG's case, it took only three months to deploy the Oracle demand management system and associated data model.
JOAG projected a return on investment (ROI) of eight months for the VMI initiative. In practice—thanks to the alacrity with which one large customer embraced the program—it took only two months for the new Oracle software and associated VMI functionality to pay for itself. "It has been an incredible success," confirms Clark. "The Demantra product has been outstanding for us."
According to Clark, this rapid ROI has been driven by escalating volume with its particular retailers. "We have seen direct cost savings through reduced freight charges, greater staff efficiency, and an increase in quality," he says. "These organizational decisions have boosted our business, with minimal overhead and no increase in labor."
JOAG is also lowering its cost of sales, thanks to less time spent administering price protections on behalf of its retailers. As JOAG moves stock more quickly, its inventory is less likely to be affected by price drops. Once again, it's all about collaboration. Now that retailers are feeding JOAG their point-of-sale data, JOAG can react faster within its supply chain. "Instead of taking a couple of weeks to react to a situation, it might just take 24 hours," concludes Clark. "The coupling of technology and the sharing of information have been huge for us. Our inventory turns about three times faster at stores where we have implemented this program."
For More Information
Oracle Supply Chain Management
David Baum is a freelance writer based in Santa Barbara, California.
