Survey says on-demand applications help shippers manage risk, trading activity
By Jeff Berman, Senior Editor -- Logistics Management, 10/1/2007
BOSTON — The importance of on-demand software applications is growing says a survey of more than 450 supply chain executives recently conducted by Boston-based research firm Aberdeen Group.
The report, Supply Chain On Demand: Enable Flexible Business Processes, provides insight into why on-demand applications are advantageous for shippers when performing tasks relating to inter-enterprise collaborative processes like logistics collaboration, supplier collaboration, and enhanced flexibility in managing business processes.
“On-demand applications can offer significant advantages for shippers managing external processes,” says Aberdeen Director of Supply Chain and Logistics and report author Nari Viswanathan. The report found that the main reason shippers consider using on-demand applications is the opportunity to work effectively with multiple trading partners, rather than having to interact with trading partners on a “one-on-one” basis for things like billing processes and inventory management queries.
Another driver for on-demand usage is the emergence of globalization, said Viswanathan. “A major impact of globalization is that shipper trading partners have become increasingly more tech-savvy, and that is making it easier for these partners just to plug in to a system and access whatever information they need rather than have to depend on a home grown system,” said Viswanathan. The report indicated that 19 percent of survey respondents currently invest in supply chain applications—like on-demand—to increase its number of global supply chain partners.
Other reasons for the investment were: the need to adapt and change business processes over time (53 percent); pressure to utilize supply chain assets efficiently (49 percent); and pressure to reduce supply chain risk (30 percent). In addition, 39 percent said that they are implementing on-demand supply chain applications in the form of a strategic action in response to external pressures.
Information visibility and transparency are two other main drivers for the shift to on-demand, says Joel Wright, director of enterprise supply chain and program management systems at Boeing. “By having readily accessible information supporting our processes visibly across the supply chain, more robust collaboration can occur and be more effective,” said Wright. “[The] key measure is improvement in productivity that results from having information visibility that can be counted on.”
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