Getting Up to Speed
Every business process is a series of steps, each of which consumes time and money. In dramatic fashion, the Internet is transforming and compressing processes across all industries, challenging businesses to get up to speed or risk falling behind.
Business process management applications help companies integrate processes from start to finish, at all points along their extended supply chains. Different applications focus on different segments of the supply chain.
Enterprise resource planning (ERP) aims primarily to integrate all of a company's internal functions, from planning and production through sales and shipping, though many ERP applications today include supply chain management modules for incorporating suppliers, distributors, retailers, and customers into a company's network-based resource management efforts.
Electronic data interchange (EDI) or Extended Markup Language (XML), standard formats for data sharing between separate companies, have existed in various forms for decades. For most of the history of EDI, proprietary formats have limited various EDI systems to the industries that created them. Today, EDI is evolving to build on the widespread adoption of the Internet and its nearly universal standards. And XML is coming on strong, extending popular Internet standards to allow companies to format information in a way their trading partners' systems can understand.
Supply chain management reaches beyond the boundaries of a single company to share information between suppliers, manufacturers, distributors, retailers, and customers.
The basic goal of both ERP and supply chain management is similar: connect supply more intimately to demand by directly linking customers and their buying habits to production and planning processes.
On a basic level, these applications can integrate internal functions such as production, inventory, accounting, and sales. Purchase orders for supplies and materials can be generated automatically and tied to order tracking and payment activities. As they develop, ERP and supply chain management systems can encompass sales trends and link to suppliers' systems, minimizing inventory risks and costs and enabling just-in-time manufacturing or distribution.
The Internet is playing a pivotal role in the rise of supply chain management and the evolution of EDI and ERP. It connects trading partners across any distance, allowing them to share market intelligence in real time. It transforms processes and saves time and money by eliminating duplicated effort. Ultimately, it improves a company's competitive stance and customer responsiveness by synchronizing corners of the business with customer needs.
Growing companies are utilizing business process management tools in the following ways:
A men's tie manufacturer gets up-to-the-minute data on new orders, allowing it to track which of the season's designs will be the hottest sellers. It can then shift manufacturing resources to these designs and signal suppliers about the increased demand, ensuring that its customers get what they want, when they want it.
An olive oil distributor receives a larger-than-usual order for a specialty product. Its supply chain management system automatically checks suppliers to confirm that the order can be filled, allowing salespeople to provide an accurate estimate of the delivery date.
Operators at a flower delivery franchise's call center can track real-time inventory at participating regional florists, so it can direct customers' orders to the outlets that can fill them most efficiently.
Business process management applications include:
