One is Not the Loneliest Number
August 22, 2008
One’s not the loneliest number... if you have a 2,800 member network.
If you attended our recent Supply Chain Executive Conference last June, I hope you remember the fireside chat I conducted with Dave Allen, senior vice president, operations and supply chain, of Del Monte Foods Company. During our chat, Mr. Allen described how he was moving critical, collaborative business processes for retailer planning and fulfillment to a multitenant network operated by One Network Enterprises.
On my recent trip to Dallas, my first stop was for dinner with One Network founder Greg Brady. Our conversation began with a discussion of the next wave of business process management (BPM). From his perspective, today’s BPM tools provide a “veneer of flexibility over relatively inflexible apps.” Instead, modifying the business process should automatically modify the core application logic. Another way to think about it is this: The process is the application.
Mr. Brady said this requires a strong permissibility framework that supports a tunable system of control to manage where and when the modifications occur and to provide a seamless way to gradually evolve to meet new business needs. It also points out the need for multiparty master data management (MDM) to avoid having multiple copies of data stored across a network of nodes consisting of consumer goods manufacturers, thirdparty logistics (3PL) providers, and retailers.
Imagine your supply chain on IMAX. Confused? Here’s another way to look at it: Imagine your end-to-end supply chain as seen on an IMAX Theater. You can see inside every resource and transaction as it pertains to orders, inventory, moves and shipments, people, promotions, and constraints. Ideally, you can immediately see or sense any variability in demand and supply. You can model the impact a reduction in lead times has on a retailer inventory turns and profitability. The screen automatically refreshes all the pertinent data every 15 or 30 minutes in order to better align demand and supply.
Returning to Del Monte, the company has shelf-level visibility across all pet-food SKUs, which then drive all its internal operations. Any supply change is propagated across the entire retail network, with potential mismatches identified and prioritized at all levels every 15 minutes. On the demand side, any changes are a function of how often the company gets updated signals from the various retailers, which is usually done on a nightly basis. One Network provides Del Monte planners with prioritized hot lists they can use to incrementally replan with all the partners involved since they’re all on the same network.
As Mr. Brady talked, I recalled attending a One Network kickoff six years ago when he said companies in the future would be able to collect global point-of-sale (POS) data from customer retail networks and compare it against the production capacity and inventory availability data from global contract manufacturing networks. Add in any transportation considerations and other constraints, and the end result would be the optimal replenishment plan that balances customer demand and supplier capabilities.
But those were the early days. Instead, Mr. Brady has delivered by employing three key technologies: the multitenant network for leveraged connectivity, wrap Web 2.0 with business process management, and grid computing to achieve the scalability required for incremental supply and demand planning across enterprises and parties. Add new consumer goods manufacturers or retailers, and they can connect to any of the trading partners already on the network. By tying companies together on a multiparty workflow, they’re able to significantly reduce lead times, demand and supply variability, and operating costs, all of which have been validated by their Walmart-Del Monte experience.
One Network is one of the fastest-growing, software-as-a-service companies, with more than 2,800 customers. Just before dessert, I was pleasantly surprised to learn that the Department of Defense is one of the large customers using its platform as a service to create 21st-century business processes across thousands of government systems..
BY: Bruce Richardson, AMR Research Alert Article.