Effective supply chain management means taking any and all steps possible to ensure products are delivered affordably and on time. Trends sweep through the marketplace due to promises that they can save money or time. The latest, according to the MIT Sloan Management Review, may be a move to localized production. While it represents a change from the centralized off-shore production that companies are used to and may require unique skills, the source stated that factors in the current global economic climate could favor the model.
State of manufacturing
The current state of manufacturing is heavily focused on China. According to the source, this move itself was a bold challenge to the way companies thought about the supply chain and required complex conceptual planning as recently as two decades ago. The current manufacturing model favors the mass production and import of goods at factories in China. The quickly growing country has a plentiful and affordable labor force, meaning the shipping costs are recouped in savings on the logistics of employing workers and the day-to-day operations of a factory. However, the source stated that the current climate may be conducive of a change.
Move to local
According to the Review, supply chain management has recently taken a local turn. One of the factors drawing companies to developing countries, affordable labor, is drying up. The source also cited high risk, a volatile worldwide market for goods and rising fuel costs as factors that could favor moving factories closer to consumers.
The source listed factors that companies must consider when moving manufacturing and other supply chain processes. The new shape of the chain should follow demand, meaning companies must be aware of the sales landscape for their products. They must also have a strong recruiting strategy, as the source mentioned talent recruiting as the largest barrier between executives and a move to localized processes with a global reach.
Following the leaders
Supply chain adaptation can largely rely on following the actions of a few thought leaders. Supply Chain Digital posited that IBM's global supply chain is one of the leaders in the field, a fact chalked up to the company's long history and consistently ahead-of-the-curve work. The company is also responsible for supply chain management solutions from its IBM Smarter Commerce Line, meaning companies can seek out advanced supply chain-enabling software solutions for needs such as B2B integration.
Ecommerce is no longer limited to home computers. The process of buying goods online has grown as shoppers become more comfortable with their smartphones and tablet computers. Apps for shopping have put everything a tap of the finger away, as long as retailers have the secure transaction management software to handle the information.
Now, anywhere is a venue for purchases and retailers wanting to stay effective and competitive compared to their rivals are seizing the opportunity to sell to mobile-equipped shoppers.
New trends
A recent survey found that ecommerce growth is being driven by a new generation of shoppers, willing to buy more things on the go. The Global Online Shopper Report found that modern customers spend 22 percent of their annual output on online purchases. This shopping takes an average of five hours a month.
These numbers mean that retailers can no longer pass on adopting an ecommerce strategy. Leaving more than a fifth of customer spending untapped could be a critical mistake in tentative financial times.
Smartphones are the rising force in the ecommerce world. A company's transaction management system must be able to securely process payments from mobile sources, as the survey found that 19 percent of consumers shop on the devices. In some countries, these numbers spike heavily. In China, for instance, 46 percent of respondents made purchases through phones.
"Ecommerce is growing at a rapid pace, with consumers in nearly all countries spending a growing percentage of their income online," said Phillip McGriskin, product officer with the report's sponsor. The consumer appetite for buying cross-border is strong, particularly in the high-growth developing online economies."
Overall, the report found that online shopping has essentially left the home. Customers shop while at work, while at college classes, while in the car or at restaurants. A lack of proper processing technology means missing all of these markets.
Multi-channel wrinkles
The rise of mobile devices for shopping may have effects on multi-channel sales beyond their capacity to enable online shopping. A recent report in the Winnipeg Sun stated that customers are also eager to use their smartphones as a payment device in stores. This means that new technology is needed at the retail point-of-sale as well, to accommodate the newly connected shoppers. As with any new trend, however, businesses on the forefront of multi-channel tech could capture the attention of the brand new market segment. Physical purchases using phones are especially developed in Canada, with other countries still in the investigative stages.
Companies can stretch their capabilities by connecting globally. Not limiting transactions to one area means that firms can seek out the most eager buyers for their products or enlist the best factory talent in the world. These decisions can help a company enhance margins and boost long-term strength immensely.
There are perils, however. Gaining efficiency through new connections is only effective if communication with those new partners is unencumbered and instantaneous.
Motives for expansion
The new State of Manufacturing report issued by the World Economic Forum and Deloitte found that talent is one of the things driving the global spread of companies. While unemployment remains high in undeveloped nations, manufacturers require a skilled labor force, leading them to seek out factories in nations with highly-trained employees.
In a companion to the report, Ricardo Hausman and Cesar Hidalgo stated that less-developed countries would soon have a chance to step up their own contributions to the manufacturing process. They stated that middle income countries will soon reach a position capable of creating more types of products.
Ability to grow
The two researchers stated that the entire phenomenon of globalization has been enabled by improved communication technology. B2B integration technology has grown steadily more powerful in recent years, as new forms of secure file transfer have replaced FTP and traditional email systems, shortening the time between innovation at corporate headquarters and the production of a new product, no matter where in the world the factory is located.
Each location of a company can fulfill its function with less workers than ever, the researchers stated, as high-speed communication and transaction technology allows each division to remain committed to its own function, wasting no human resources on positions already filled elsewhere in the organization.
Connecting the enterprise
Global network liability is, on some level, unavoidable. A company with a factory thousands of miles away needs to be deeply aware of the status of that resource and its workers. According to expert Sundar Kamakshisundaram, sharing his expertise with Supply Chain Digital, high-speed automated processes linking international partners is one way to reduce risk and liability.
He stated that visibility rises when the communication between trading partners can be accomplished without direct intervention. Advanced B2B integration systems mean that benchmarking and reporting on status can be accomplished across borders, providing the maximum lead time on any potential problems. Technology enabled the globalization of the supply chain and further implementations can improve it.
The world of B2B integration is an active, vital one. With companies placing more value than ever on corporate data and with speed at a premium, providers in the field of integration products are constantly re-tooling their offerings to add more value. A recent trend in the field has been the combination of services and products between multiple providers, creating new solutions that solve specific business problems.
One provider making a move to expand and improve its offerings is SEEBERGER. The company, in a bid to offer a powerful new data loss prevention tool, teamed with field specialist Code Green Networks. Working together, the two firms debuted a joint solution for SEEBURGER's business integration suite. The new tool is designed to be easy and quick to install on a system and uses Code Green's loss prevention technology to immediately warn users of the SEEBURGER software if a file in transit violates security or does not comply with industry regulations.
"Content-aware data loss prevention adds the critical ability to analyze the content of that file and execute actions accordingly, including forbidding the transfer of sensitive information," said Rohit Khanna, SEEBURGER's global strategy executive vice president
Another large player on the B2B integration field, IBM, also recently announced a key partnership. IBM's move is designed to bring the company into an area predicted by some to dictate the future of enterprise software - cloud computing. IBM's recent Smarter Commerce Initiative is built on a foundation acquisitions, adding new systems and products to IBM's business offerings.
The acquisition of Emptoris added significantly to IBM's supply chain management and B2B integration products by giving users the capability to perform cloud-based analytics on many steps of the process. The large amount of information delivered by the new offerings is designed to change the way decisions are made during the integration and data migration process, as well as on all links in the supply chain. The system's value, company officials say, will come from its ability to lower sourcing costs and decrease risks.
The beginning of IBM's strategy itself was enabled by the addition of another company's operations. The current generation of B2B offerings from integration services to supply chain management was born from the merger of IBM with Sterling Commerce. Following the Emptoris purchase, the acquisition streak continued with the addition of DemandTec to the Smarter Commerce Initiative.
In 2011, IBM acquired business integration specialist Sterling Commerce, adding to its Smarter Commerce platform. The move was game-changing for businesses in need of B2B integration solutions, as it offered retailers exciting new tools. Now, further corporate moves by IBM could add to companies' ability to integrate data and work closely with partners.
New moves
The latest news from IBM involves the shedding of its hardware unit. The company has decided to sell its point-of-sale hardware manufacturing arm to Toshiba. This move, however, will not limit the ability of Smarter Commerce customers to have access to the products. With the agreement, IBM also signed a partnership agreement with Toshiba, allowing the Smarter Commerce initiative to continue using the systems.
"The pace of retail expansion requires a strategy to serve this dynamic marketplace. This acquisition by Toshiba TEC creates not only the world's leading point-of-sale company, but also a key business partner for IBM in its strategically important Smarter Commerce initiative," said IBM's industry solutions general manager, Craig Hayman. "Retailers can invest with confidence in the proven abilities of these two leaders to deliver multi-channel commerce to more demanding consumers who want the same experience shopping online, in-store, mobile, social or by any other means."
Direct effects
The move's practical effects, according to IBM, include the speeding of the development process of new point-of-sale systems based on specific client needs. Chains investing in the Smarter Commerce initiative, including those with widespread overseas operations, will benefit from the increase in new product development, as well as the creation of an all-in-one hub for maintaining and planning services.
The Smarter Commerce platform, as described by its creators, is a system to infuse intelligence features into applications on the procurement, sales and customer service sides of their business. A2A integration, combining multiple products into one unified solution, is important for companies in the age of ecommerce. IBM officials emphasized that modern customers expect fast service at all times and companies' reputations can be made or broken immediately through the internet, requiring an agile network of systems that function together.
Smarter Commerce, according to Bloomberg, has been a success for IBM so far. The source stated that IBM has tapped a "gusher of data" from the effort, which is accelerating its growth. The news source stated that IBM is pursuing a software-first approach, borne out in its decision to give the hardware side of its retail business to Toshiba.
As a recent Register report indicated, business applications perform a wide variety of advanced functions. In a connected enterprise environment, IT decision-makers want these apps to communicate with one another. Uniting the systems that control resource management, relationship management and data collection means a more agile business model and the ability to outstrip rivals in efficiency.
Desire for A2A integration
The Register found companies are eager to combine their business systems, even if the original software developers were not. The source stated that in the modern workplace, there are applications to control industrial machinery, to track entire fleets of vehicles and to make sure that those vehicles are moving along optimized routes.
Unfortunately, most of these programs are "impenetrable" according to the source, and intentionally so, as this means that companies are locked into a specific software ecosystem. This lack of connection in the programs themselves has led to the desire to seek out A2A integration, ways to make data from one application usable in the others.
Integration for all businesses
The news source reported that A2A integration is a common practice among enterprise organizations. A new wrinkle, however, has come from the entrance of small to medium-sized businesses into the conversation.
The cloud has enabled SMBs to run instances of a wide variety of enterprise applications and databases. This means that companies of all sizes are now running assorted applications, with the same need to connect them. The source pointed out that the need for custom A2A development is especially pronounced among these companies, as most middleware meant to enable connectivity is designed for large clients.
SAP applications draw interest
According to IT Business Edge, applications that have drawn interest from an integration standpoint are SAP programs. According to the source, making SAP data work with products from other developers has been a particular challenge. New applications focused on customer engagement, according to the source, are largely incompatible with the common SAP systems when deployed, making SAP integration an urgent task for IT departments.
Small business A2A integration and SAP integration are due to cross over, as SAP itself has recently announced a number of products for the SMB market. While large-scale SAP integrations can be out of the price range of small buyers, the developer has embraced the cloud for its line of OnDemand products.
Companies asking what functions are best suited for the cloud can find inspiration in the fast-growing startups recently profiled by Forbes. The source discovered that some companies operate no on-site infrastructure.
This may not be as surprising as it sounds, however. While some executives still regard the cloud with suspicion, the development of online applications that comply with regulations and have high rates of uptime means that even core company systems can make the switch. Now that cloud systems in sensitive areas such as financial management software and secure file transfer have established PCI compliance, doubt is giving way to opportunity.
Entire infrastructures
"The notion of anybody physically owning their data seems like a notion of the past," startup CEO Rob Berhshteyn told Forbes. "In fact, you don’t want to take physical ownership of anything. You’d rather it be somewhere else, as long as it's secure and redundant."
According to the news source, Bernshteyn's company, founded in 2006, hosts every one of its business applications in the cloud. The idea that data is less secure in the cloud has been fading, allowing companies to take advantage of the many benefits of an all-remote infrastructure. Cloud based applications, requiring no installation, can be operated from mobile devices and from employee computers even when working from home or from a satellite office.
A small company can benefit from moving as quickly as possible into new relationships with partners. Some of the previous barriers preventing that transition - including the cost of IT systems powerful enough to exchange data with bigger firms and the high cost of support staff - can be neutralized by using cloud computing for systems such as B2B integration. Managed file transfer can be added to a company's arsenal far faster on a cloud model, allowing early entry into global markets.
B2B integration in the cloud
An attraction to the cloud does not mean that any hosted system will meet a company's needs. Using free, consumer-facing networks such as Dropbox may seem to be an effective application of the cloud to cut resource use, but experts state that it raises security questions.
SEEBURGER global strategy executive vice president Rohit Khanna warned that employees using free file sharing sites for integration risk high administration costs and the fines that come with noncompliance. Free services are typically not meant for corporate use, meaning that far from solving the problems of IT infrastructure, they make things worse. Khanna's firm offers a secure file transfer solution specifically meant for corporate use and available on either the public cloud or, for heavily regulated industries, a private cloud infrastructure.
The age of ecommerce means that consumer demand is accelerating. Shoppers know merchants are capable of delivering nearly anything within days and they have come to expect fast service. A recent SmartHub survey of online sellers found that, for the most part, companies have accelerated their efforts to speed delivery and offer value to their customers.
Within three days is key
According to the report, 65 percent of merchants are now able to get orders to customers in three days or fewer. The B2B integration process that make such a quick turnaround possible must be highly developed to bring a product from warehouse to doorstep quickly. Companies focusing on a multi-channel approach, rather than strictly ecommerce, also have to develop that deliver capability alongside its existing stock strategies. Customers expect a seamless and transparent omni-channel approach, and the researchers say that it is on the way.
"It is particularly interesting that a slight majority of merchants aren't yet providing omni-channel activity to customers through one source," said Jon Eggleton, a marketing and ecommerce expert. "We expect to see this trend change as customers push further for channel transparency."
Making connections
A fast turnaround is limited by the connections between companies and their partners. A B2B integration strategy based on the latest cloud computing technology can help retailers here. Recent trends in integration have focused on making the digital exchange of information as quick and easy as possible, with secure file transfer now available at speeds that enable near-instantaneous turnaround. Companies will be unable to achieve the three day shipment mark if they can't deliver orders to their partners.
The multi-channel option
A move to a multi-channel model has held real benefits for companies. Marks and Spencer, a large chain retailer in the U.K., has found great success in the early stages of its ecommerce ramp up. In the fourth quarter of 2011, the chain gained 22.8 percent sales growth in its direct sales to customers, while the total group sales rose a mere 0.8 percent.
Internet Retailing, reporting the results, stated that while some of the company's initiatives such as overseas sales seem to be faltering, the strong online boost, the result of new customer service programs, according to company executives, is a good sign of a successful transition into a seller capable of reaching customers through many channels. A large, established company making the jump successfully could be inspiring news for its smaller and more agile peers.
No matter the industry, the workforce has gone mobile. Employees are accessing their data on the go, thanks to tablets such as the Apple iPad and smartphones, which have become ubiquitous. This indicates that companies must update their data loss prevention strategies. The data moving through mobile devices is a tempting target for hackers and data thieves, meaning that a managed file transfer system is essential for peace of mind.
The rise in enterprise mobility has been tied closely to the increase in cloud computing power and the rapid development of the devices themselves. IT mobility insider Garth Hayward told ITWeb that companies are eager to increase productivity with devices that can connect directly to corporate networks. Fellow field expert William Hardie, however, warned the source that companies are finding that securing mobile devices can be difficult, with the threat of a lost device especially worrisome.
Realizing that enterprise mobility is an enduring trend and hoping to make it more secure, cloud-based file transfer company SEEBURGER recently debuted a new version of its managed file transfer system optimized for mobile devices, dubbed SEE FX Mobile. Companies with a mobile workforce and a need to perform B2B integration can use the solution to download and upload to and from mobile devices, with automatic encryption making sure the files are unreadable to outside eyes.
"There are no corporate controls over file exchanges on smartphones or tablets at all," warned SEEBURGER' s Rohit Khanna. "SEE FX and SEE FX Mobile make it possible to securely and efficiently manage all of these processes with a single integrated solution that ensures complete visibility for governance and regulatory purposes."
Using the mobile version of the file transfer application carries benefits for businesses with a variety of technologies. The software synchronizes files across the many types of mobile devices, as well as the desktop and notebook computers that are traditional tools of the trade. The application's makers stress that it is a more reliable and safer option than FTP servers, which are an old technology not designed with the high-speed modern B2B space in mind.
Losing a mobile device with secure information on it or having a file transfer between a mobile device and a company's servers interrupted is a worst-case scenario for businesses. It is nearly harmless, however, if they have implemented a secure method of transfer, complete with encryption for the files involved.
When they needed business software systems, companies used to engage in costly and time consuming installation and upgrade procedures. Everything from antivirus software to data transfer systems were delivered physically and on traditional financial models.
The cloud has changed everything, however, as the technology's application delivery model is completely hands off, with no installation on local systems needed.
The Amazon cloud has grown so large that, according to Wired, it now underlies a significant percentage of everything on the internet. The source stated that internet researcher Craig Labovitz has found the Amazon cloud is responsible for sending or receiving 1 percent of all web traffic. He stated that its amazing elasticity is one of the things that makes it Amazon's service so important, with companies able to draw supercomputer power from the infrastructure for a short time and only pay for what they use.
According to a recent eWeek report, Amazon stands as one of the leaders in the cloud application sales. The Amazon Web Services (AWS) platform, which has been active for more than five years, now acts as a portal for companies to easily access new software, even complex systems such as secure file transfer.
Dominant position
The eWeek report stated that AWS' executives have faith that the cloud will eventually replace the on-site deployment model for business applications in general. Executives stated their commitment to keeping the platform secure and focusing on the needs of their customers. Amazon is in the process of constant internal cost-cutting, passing the savings on to users purchasing services through subscription models.
"We’re trying to break through the traditional models of enterprise software vendors," Amazon's CTO Werner Vogels told the source. "Enterprises have been held hostage by long-term software contracts."
Integration on AWS
Companies in need of a B2B integration solution can find SEEBURGER SEE FX on the service. Despite appearing on the Amazon service, the software interacts with many different popular brands of enterprise software and is capable of SAP integration. No matter what type of infrastructure as company has in place, adding a managed file transfer application is now extremely easy.
No local software installation means users can replace their FTP servers with a lightweight and secure system. The software can be accessed through a web browser or Microsoft Outlook, meaning users can engage in the same behaviors they have always used and reap the new technology's benefits. Businesses using the AWS version of the software can partition a private section of the Amazon cloud for safe business use.