Magazine article Industrial Management

The Context of E-Supply Chain Management

Magazine article Industrial Management

The Context of E-Supply Chain Management

Article excerpt

Executive Summary

Supply chain collaboration across the Internet isn't as simple as everyone thought it would be, One reason is that context, not content, is the most important aspect of the information that's made available to stakeholders. Advanced planning and scheduling software is beginning to address the context issue.

Content may be king on the World Wide Web, but context is fast becoming the ruling principle for successful e-supply chain execution. It has long been overlooked. Supply chain collaboration on the Web has proven far more difficult than people realized, despite a voluminous real-time exchange of information. Content gains us little if we do not adhere to the basic tenet of viable communications: The message must have meaning to the recipient - not the sender. Everything else is just noise.

Given the investment made in information technology and the expansion of the Internet in the past five years, the flow of data has undergone such a quantum growth that it is widely accepted we stand the risk of being incapacitated by too much information, not too little. The question becomes how one sorts the meaningful from the noise.

Gregory Bateson, seminal intellect, a major contributor to the development of both systems thinking and information theory, defined "information" in the most useful manner I've heard. It is both eloquent and simple. He crystallizes its significance in seeing it as "any difference that makes a difference."

The fact that Bateson was educated and classically trained as an anthropologist - at one point married to and collaborator with Margaret Mead - puts his definition of information as it relates to successful e-supply chain collaboration in a most appropriate context. Information - like language - requires the proper translation of meaning when crossing "cultural" boundaries. In e-supply chain management, when information leaves one domain destined for another, we need to be mindful of the implied but seldom articulated question: any difference that makes a difference to whom?

What's in it for me?

Supply chain networks are designed principally to serve the objective of rapid fulfillment of customer demand. Vested selfinterest of each partner, however, always comes back to the question, What's in it for me? This is as applicable to bottomline issues as it is to information. The degree to which that question is answered in every exchange of information among partners is a key determinant of the degree of success an esupply chain strategy can achieve.

Rapid order fulfillment puts manufacturing at the heart of supply chain performance. The plant is where all elements of the supply chain come together, where planning, marketing, sales, purchasing, and distribution coalesce into items of exchange that have value to the end customer. Therefore, information arising from the process of manufacturing specifically detailed, accurate, real-time production statusing information - has value to partners all across the supply chain. This information is chiefly resident in advanced planning and scheduling software.

Some plant systems software vendors have begun to embrace the importance of varying the contextual presentation of plant-centric information generated by APS, accessing what is required to add value beyond the confines of the four walls of the plant. Some have begun to add the necessary intelligence to ensure greater contextual range, and just as importantly, the intelligence to disseminate information as rapidly as possible to ensure that it can, in fact, make a difference. This is especially relevant regarding event-triggered circumstances in which a collaborative decision must be made to recalibrate production scheduling to meet customer order expectations.

KPI scalability

Within the plant, production managers monitor the health of their operations using key performance indicators. The most critical KPIs typically include throughput, yields, and capacity utilization. …

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