JOHNSON, SeeBeyond: The point is to reduce supply chain costs and inventory obsolescence! There are suppliers and manufacturers who are now leveraging technology to have real-time access to product demand. Many market leaders are now utilizing eBI technology to also collaborate between organizations real time. The ability to quickly modify demand forecasts, send “out-of-stock” alerts, and send replenishment orders and shipments will dramatically reduce supply chain costs.

MARTHA, Mercer Management: If all is rosy, why have companies like Cisco had to write off more than $2 billion of inventory? Or, why has Nike invested millions in supply chain software that has not delivered benefits? Part of the problem is that as companies begin to collaborate, they are really changing their business models. What they have not done, however, is change key operating practices that deal with the added complexity that is associated with collaboration. Certainly supply chains have been compressed, but the margin for error has also been dramatically reduced. To be successful, companies must enhance visibility so that it is much more accurate, and find ways not to exclude human intervention. The opportunities provided by collaboration are great, but the need for enhanced visibility is even greater.

CICIO, Optum: We’re at the very early stages of a new frontier. I’ll give you a live example of a client, a well-publicized $40 billion telecompany. Their customer ordered something, expected to get it, and didn’t receive it. These are complex orders, with 150 line items and thousands of components, sourced out to dozens of suppliers, including their own internal manufacturing plants. The challenge was to establish the technology and the processes that could track each order from the minute the supplier received an order, and we tracked that order through its complex supply chain.

BUTZOW, C.H. Robinson: The transportation aspect is not yet fully visible. That’s because people try to make this a technology play, and it’s really an execution play. Technology is an enhancement to the process, not the process itself. And if you look at where the holes are, we’re still dealing with realities like the fact that there aren’t many Internet-enabled stations at the back door of receiving – it’s coming but it’s not there today.

We have customers with whom we’re actually seeing their real-time point-of-purchase data, and then replenishing those inventories. That gives us the ability to literally see what’s happening on an hour-by-hour basis. Nevertheless, there are transportation departments at many companies that still don’t know a product is shipping until it is 100 feet from the back dock. Yet, the order had been sitting there in that company for a period of three, four days. They still need visibility to plan an order cycle.

REGAN, Tranzact Technologies: If you knew well in advance the orders that are going to be shipped, then you could collaborate with your carriers to ensure that the lowest-cost carrier in that particular lane was consistently used. However, what we see happening, and this is something that NTE addresses as well as C.H. Robinson, Ryder, and other 3PLs (third-party logistics companies), is the fact that it shows up at the dock on Monday, and it has to be shipped on Monday. Then the transportation department is forced to find a carrier that has the capacity to handle it, as opposed to the lowest-cost carrier in a particular lane.

ROBERS, Cap Gemini Ernst & Young: We just completed our annual Logistics & Transportation survey of major shippers. One of the striking conclusions is the fact that many companies have just begun to climb the technology curve. For example, we asked shippers how they submit orders. Four percent submit by mail, 28 percent by fax, 30 percent by telephone, eight percent by sales rep, and only 11 percent by the Internet. There is still a tremendous opportunity in the area of B2B connections and real-time collaboration.

SHEPARD. Ryder: In my experience, larger Fortune 500 companies have more trouble embracing technology change, and being technology nimble. They have so much time, money, and resources tied up in legacy or outdated technology systems that it's tough for them to embrace new technology. Thus a general axiom: the bigger the Fortune 500 company, the worse the technology and the greater the technology challenge.

JUST WHAT HAVE WE LEARNED?

ALVERENGA, KPMG: For the answer to that question, I'll point you to Japan. The downside to it, and this effects CPFR (collaboration, planning, forecasting and replenishment), is that when companies collaborate too much, not only do you sometimes skirt the legal issues, but you can get very comfortable with your partners. And you have to be very careful to assure that from the shareholder perspective the collaboration doesn't go a little bit too far.

BUTZOW, C.H. Robinson: I'm not an auto parts manufacturer, but I would have chosen not to participate in the ten percent automatic price reduction that one manufacturer recently imposed. But there are manufacturers that are so intertwined with their customers -- what is their option? They can't just turn around and go over to another customer. And so I think collaboration can be a double-edged sword.

GOLD, KPMG: And we have seen real live examples of companies that don’t understand the cost metrics. There are some companies that in the future might not want to collaborate on purpose. They may take the opposite approach of what we are talking about today.

There are reasons not to collaborate like we’re seeing with the major retailers right now. They’re not going to give data on forecasts. They’re going the opposite of exactly what we’re talking about, which is something that we’ve got to be ready for.

KIRKEGAARD, Vizional Technologies: Wal-Mart just shut down the “free sharing” of their retail POS information. While Wal-Mart probably has the most competitive exchange on the planet, and has used it for competitive advantage, a potential downside could be that others realize just how valuable information is and thus it becomes more difficult to collaborate.

ROBERS, Cap Gemini Ernst & Young: Our point of view focuses on creating more adaptive supply chains based on extended enterprise visibility. Supply chain visibility allows for better control and execution. Integrating pricing actions on the demand side with the complex and ever-changing conditions of the supply chain can reduce costs, increase revenues, and make more efficient use of critical assets.