KM & Web help power global collaboration

While getting product from one place to another is the nitty-gritty job of supply chain management systems, a whole lot of knowledge management goes on behind the scenes to make things happen.

Supply chain management (SCM) entails orchestrating a number of disparate tasks--often involving the coordination of information within your own organization as well as communicating with suppliers. To furnish all partners in the supply chain with the most accurate information and cohesive reports, knowledge management systems are being used to define workflow and gather data from a number of different sources.

As supply chain management (SCM) becomes more crucial to the success of an organization, knowledge management systems are being deployed among departments and small work groups as well as at the executive level and enterprisewide. The lack of efficiency in the supply chain can be extremely costly to any organization, so SCM is getting attention from the top down.

Naturally, many companies looking to boost supply chain efficiencies are using the Internet to communicate. While several years ago they were primarily sharing information about product availability and shipment status, now many are using the Web to collaborate on product design and plan the most cost-effective delivery routes, among other efforts."The dissemination of information. That is the number one thing changing in supply chain management," says Peter Katz, VP of worldwide sales and marketing for iLogistix

"There is greater supply chain visibility," he adds, noting that more information is available to all partners. "That is a big differentiator allowing leading-edge companies to create efficiencies. And they are able to do that because of knowledge management capabilities."

One of the drivers of SCM is real-time access to knowledge, according to Katz. There are a couple of hot buttons, he says, and one is being able to tell customers when they place orders when the product will be available based on inventory and materials on hand.

"With customers directly accessing information through the Web, all of your systems need to know what is available in inventory," he says.

Like a growing number of supply chain management system providers, iLogstix is offering services as well as software."We essentially run a virtual application. We're running their product catalogs and customer relationship management systems," Katz says. "Our customers let us know whom they want to provide visibility to, and we provide that visibility. With some supply chain partners, they are more open; with others the access to information is more restricted, depending on the nature of the business and the business relationship. We manage access to supply chain data at all levels."

Managing supply chain knowledge across organization boundaries is key, says Carol Schrader, VP of worldwide marketing for Agile Software "Take something like a new product introduction process. Everyone from engineering to manufacturing is involved," she says. "The key to making that process smoother is figuring out how to provide collaboration. Once the engineers have designed the product, the manufacturing people send it back. Then maybe supply chain partners provide feedback. Your supplier may tell you that if you want to build 20,000 handsets in the next 30 days you'll have to swap out a component. For that, you need cross-enterprise workflow capabilities."

One of the key challenges of knowledge management is trying to keep all the components of the process together."You've got bill of material, approved manufacturer lists, drawings, assembly and test instructions," Schrader says. "This is all content that evolves at different times."It is the dynamic nature of many supply chains that makes knowledge management so important, said Michael Fancher, CEO for Concentus Technology

"Without applied knowledge management, we're stuck with static supply chains. What we're seeing is momentary supply chains being built around specific business opportunities or situations," Fancher says. "We're seeing workflow, enterprise application integration and process modeling at a high, detailed level. The supply chain management system captures knowledge about what is happening. Knowledge management analyzes those results, compares to intent of the supply chain partners, and infers better ways of doing things. The partners can then enact those improvements to perform better in the next cycle."

Getting accurate information from suppliers on availability has been a driving force to implementing a knowledge-based SCM at Precor, a designer and manufacturer of fitness equipment.

Staying trim with SCM"The fitness equipment business is extremely competitive," says Tom Moran, Precor's VP of engineering. "In order to stay in the running, manufacturers have to keep pace with the market—not only delivering new products, but delivering equipment with superior designs, ahead of the competition and at lower prices."

Precor outsources many of its manufacturing processes, collaborating with suppliers to implement design changes quickly and efficiently, and communicating those changes across the entire supply chain to support just-in-time parts supply.

Precor is collaborating with partners to ensure that inventory will be available. "We're outsourcing a lot more of our manufacturing," notes Moran. "There are certain things we do that add unique value, but unless it's a core competency that gives us a strategic advantage, we outsource to other companies with specialized expertise."

Precor decided to implement a collaborative manufacturing infrastructure to manage new product introductions and product changes. To keep pace with changing demands for exercise equipment, Moran says the company created a team with suppliers that could collaborate on product development and share product design and inventory data with engineers, financial executives and procurement specialists.

Worldwide supply chainPrecor adopted Agile's software to provide greater internal efficiency and to provide the enabling technology to sustain its shift toward horizontal integration with its supply chain partners. Agile helps to coordinate internal design and inventory changes, and to bring external suppliers into the collaborative manufacturing process securely via the Internet.

Agile was installed and rolled out to 215 internal users in Precor's engineering, inventory control, manufacturing, quality assurance and customer service departments and its European offices. Pending product changes are available to its worldwide supply chain at any time.

"We have several vendors already on the system and several more being set up on it," Moran says. "Our supply chain partners are doing our purchasing, our manufacturing engineering and our design for manufacturability. We are able to get them involved very early in the design process."Every member of the product team can view what is happening with product designs and then take steps to plan accordingly. Each piece of information necessary to manufacture new products and change existing products—including bills of materials, part numbers, and CAD drawings—is available to both internal and external members of the project team, Moran points out.

"An engineering change notice goes out when someone proposes a change. The drawing has to get modified, and a new part may be required. We can route around for everyone to approve. Once it is approved, we can take a look at how much inventory we have on hand and pick a date for the change to take place," Moran says