Part - I

The quest for competitive advantage begins with individual companies, with a key focus on creating and maximizing the potential of internal supply chains. The next frontier will be achieving efficiencies and standardization between companies that until now have only been possible within a single organization. Firms will increasingly depend upon each other, and without supply chain synchronization their best individual efforts to delight customers may be futile.

Introduction

Imagine a virtual organization that encompasses a group of trading companies, all working together to slash costs and share the profits. By optimizing not only their internal processes but also their interactions with each other, they realize the benefits of a truly integrated supply chain. This concept is the basis for the next revolution in supply chain software development.

Business process synchronization takes supply chain integration to the next level of efficiency, utilizing standardized information formats and communication points between trading partners. Business process synchronization eliminates costs associated with inefficient movement of goods, redundant processes and excess inventory, promoting a dedicated collaboration of all supply chain trading partners ­ suppliers, manufacturers, distributors, wholesalers, third-party providers, transportation companies and retailers.

Inter-company business process synchronization in its purest form gives rise to the virtual organization, where all trading companies work together as one competitive supply chain entity. In the virtual organization, each trading company shares its information and resources, resulting in better planning and more efficient product movement.

Today's Focus ­ The Company

While the concept of sharing information and synchronizing business processes across the supply chain is still in its infancy, most competitive enterprises have achieved, or are working to achieve, intra-company optimization.

Through intra-company optimization, companies have engineered and reengineered their business practices to enhance overall performance. By implementing internal system solutions such as ERPs and supply chain planning and execution systems, company management can make informed business decisions. Intra-company optimization extends real-time information throughout the organization, ensuring synergy among operations, finance, sales, purchasing and customer service. This allows all departments to work as a cohesive unit lowering operating costs and maximizing customer satisfaction. Unfortunately, intra-company optimization often pushes costs out to the detriment of trading partners.

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* Alan J. Dabierre is the president and chief executive officer of Manhattan Associates, Inc., a world leading provider of consumer supply chain execution systems.