The missing link

Purveyors of supply chain management technology have a truckload of stats that prove the value of their wares.

One example is Heineken, a brewery that has spent five years in collaborative commerce with 450 distributors. It has achieved 40 per cent less inventory, 50 per cent less order lead time and a 20 per cent increase in sales productivity, says Phil Manning, a business consultant with SSA (The next link in the chain, from page 25). Such numbers make me wonder why every single company hasn't already embraced SCM solutions.

Last year, IDC predicted the SCM services market will grow at a compound annual growth rate of 15.1 per cent. Late in 2002 some 12 per cent of Australian IT leaders nominated supply chain management (SCM) as their top priority when IDC asked 'which ONE area of IT investment will take priority over the next six months?' Now 12 per cent seems modest, but it was only bettered by system infrastructure (22 per cent), B2B (almost 15 per cent), and CRM/FrontOffice (13 per cent).

Jeffrey Russell, managing partner with Accenture's SE Asia supply chain practice, lists i2, Manugustics and SAP as "top of the list in planning" and Ariba, SAP and "probably" Oracle as "top in procurement". Taken together as SCM+B2B, IDC's poll suggests that smoothing the lines of supply is a top order item for a sizeable group of your peers.

Impressive stuff, but then there's the claims that Web-based SCM just can't cope with big-business transactional loads and do things like place tens of thousands of order lines in one hit. Tried and tested EDI systems must stay in place. Not to mention vendor mergers and failures rife over the past couple of years and that some of the survivors remain revenue challenged.

I wouldn't let vendors carry me too far away from reality. Can you really imagine, as suggested in our feature, a farmer in the highly politicised and subsidised sugar cane industry tracking soft drink sales on a day-to-day basis to help determine his sugar planting?

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