Linking partners in the supply chain— KM helps manage the process

By Kim Ann Zimmermann

Knowledge managment has become a critical link in the supply chain infrastructure where the ability to manage events and decision points is key. Information must flow freely. Suppliers and retailers, for instance, must share information about sales and forecasts. Apparel manufacturers share information with overseas factories producing the finished goods. The emphasis on collaboration involves all partners, from the supplier of raw goods to the retailer.

With all of that information sharing comes an increased need for strong knowledge management practices. As more hands are involved in the process—from inside as well as outside the organization—documents need to be retrieved by a variety of people. Many supply chain management software companies are incorporating document management features and functions into their offerings to ease the burden of managing the flow of paperwork. If documents do not make their way smoothly through the process in the appropriate timeframe, there can be delays in manufacturing, shipping and clearing customs.

“Internally, we've been developing good document management and workflow processes for years,” says Ginger Luttrell, president of Luttrell Training & Consulting, "but when you share information outside of the organization, as you do when managing supply chain documents, you need to be able to adapt those practices to those outside of the enterprise." The key, she says, is to accompany the technology with a solid education program.

Often, documents associated with supply chain management need to be shared in real time, says Lorne Jones, director of global product marketing for supply chain for SAP. “When you start sharing all of these documents, all of these issues come crashing together fairly quickly, particularly in light of an increased focus on homeland security,” Jones says.

The supply chain is now a 24/7 operation, and there is a need for visibility across time zones and cultures. That requires extremely tight document management and workflow processes, according to Jones, who adds that one major trend is the use of KM to manage exceptions in the supply chain process.

"Every company has schedules and plans. The tough job is to figure out how unplanned changes affect schedule," he explains. "If a drug company has a big purchase order come in from Wal-Mart, for example, how big an impact will that unexpected order from Wal-Mart have on the production of aspirin? The ability to manage events and exceptions--which is really knowledge management—is key to supply chain success.

Security issues are also having an impact on knowledge management in the supply chain. Jones says, "We are going to be required to identify what we're shipping in real time. Officials need to know who is shipping, who is receiving. This is going to be a fundamental part of commerce going forward."

Efficient document management practices can shave days off the process of clearing customs, for example, according to Harry Sangree, VP of product management for INTTRA. "It is all about making sure that the documents are accessible when the shipment makes it through various checkpoints," says Sangree. "A truck picks up a shipment to take it to the pier or terminal, where it might wait for some paperwork. The idea is for the paperwork to arrive ahead of the package. In our next release, we're adding the ability to manage the bill of lading, a process that can take six to seven days to catch up with the shipment. Through electronic means, we can cut the wait time to half of that."

Automated workflow is becoming increasingly important, according to Sangree, who says, "If you create a request electronically, the carrier sends an electronic confirmation. If the shipment is delayed, the carrier can send an automated message. That kind of knowledge sharing is highly automated."

Incomplete documentation is the top reason that goods do not move on time, according to J.T. Treadwell, director of marketing for Qiva. "At every step in the process, a shipment is accompanied by official, and sometimes unofficial, documents. The trend is toward developing a centralized repository of documents that are accessible to everyone," he says.

Remote print capability is an important feature for managing knowledge in the supply chain, Treadwell adds. An agent might need a bill of lading to release the documents to the shipper. While it is great that the documents can be accessed electronically, it is important that they can be printed remotely because they need to follow the shipment, and other points in the process might not be able to access the documents electronically.

William Seagrave, CEO of Fasturn, says that knowledge management technologies have to be incorporated into supply chain systems going forward. “It really is the missing link,” he says. “I don’t view document management and workflow technologies as separate products. They need to be part of the system. They need to be part of the supply chain infrastructure, and we’re seeing that happen.”

He says that providing users with the ability to set up document management and workflow processes within existing applications increases supply chain efficiencies. “When setting up a document management strategy for the supply chain, what users have told us is important is to be able to identify key decision points in the process to be sure that all documents are coming together as needed to move the process along,” Seagrave says.

As all members of the supply chain collaborate, the workflow structure within supply chain management has to become more flexible, says Donald Tompkinson, president and CEO of Framework Technologies. “Success is being driven by new product introduction, and that is a fluid process. Workflow is generally hard-coded and inflexible. That is evolving,” he says.

Managing the financial supply chain is also a key part of the supply chain process and is extremely document intensive, according to Brian Valente, VP of marketing for Avolent. “While many supply chain systems are focused on the flow of goods, we found very few focused on what we call the financial supply chain,” he says. “The flow of goods, the flow of information and the flow of money are all related. Automated electronic documents is where we provide a business process and workflow structure. EDI and other systems can receive the invoice electronically, but there are issues of how exceptions are routed, when payment is authorized and who needs to sign off so that the funds are released.”

Avolent's enterprise software manages invoice presentment and payment electronically.

Kim Ann Zimmermann is a free-lance writer, 732-636-3612, e-mail kimzim2764@yahoo.com