Workshop on Information Society TechnologiesWorkshop on Information Society TechnologiesApplied to Transport and TourismApplied to Transport and Tourism

Brussels, 23Brussels, 23rdrd May 2000 May 2000

Web Infrastructures for Logistic Networks Web Infrastructures for Logistic Networks

The FLUENT ProjectThe FLUENT Project

Paolo Paganelli Paolo Paganelli

Gruppo Formula S.p.A., ItalyGruppo Formula S.p.A., Italy

2P.Paganelli, Gruppo Formula

ObjectiveObjective

To To designdesign, , implementimplement and and experimentexperiment a new IT solution a new IT solutionfor managing for managing materials flowsmaterials flows,, occurring in a occurring in a logistic logistic networknetwork with multiple plants and co-operating firms. with multiple plants and co-operating firms.

ObjectiveObjective

To To designdesign, , implementimplement and and experimentexperiment a new IT solution a new IT solutionfor managing for managing materials flowsmaterials flows,, occurring in a occurring in a logistic logistic networknetwork with multiple plants and co-operating firms. with multiple plants and co-operating firms.

FLUENT: Flow-oriented Logistics FLUENT: Flow-oriented Logistics Upgrade for Enterprise NeTworksUpgrade for Enterprise NeTworks

Esprit IiM Project 29088Esprit IiM Project 29088 9 months from completion9 months from completion

Focus on Focus on logisticslogistics vs. manufacturing vs. manufacturing NetworkNetwork approach approach

Distributed sitesDistributed sites Multi enterpriseMulti enterprise Heterogeneous information systemsHeterogeneous information systems

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Two definitions for Supply ChainTwo definitions for Supply Chain

Supply Chain Management is about Supply Chain Management is about managing the flow of products and managing the flow of products and services and the associated information, services and the associated information, across the whole business system to across the whole business system to maximise value to the end consumer.maximise value to the end consumer.

Price Waterhouse (‘98)Price Waterhouse (‘98)

Supply Chain Management is about Supply Chain Management is about managing the flow of products and managing the flow of products and services and the associated information, services and the associated information, across the whole business system to across the whole business system to maximise value to the end consumer.maximise value to the end consumer.

Price Waterhouse (‘98)Price Waterhouse (‘98)

For a start, the supply “chain” is really not For a start, the supply “chain” is really not a chain at all - it is a complicated a chain at all - it is a complicated webweb of of relationships between demand and supply. relationships between demand and supply. The concurrent and multidimensional The concurrent and multidimensional nature of these relationships creates a nature of these relationships creates a complex fabric woven step by step.complex fabric woven step by step.

Gartner Group (‘98)Gartner Group (‘98)

For a start, the supply “chain” is really not For a start, the supply “chain” is really not a chain at all - it is a complicated a chain at all - it is a complicated webweb of of relationships between demand and supply. relationships between demand and supply. The concurrent and multidimensional The concurrent and multidimensional nature of these relationships creates a nature of these relationships creates a complex fabric woven step by step.complex fabric woven step by step.

Gartner Group (‘98)Gartner Group (‘98)

Linear supply chain(source: SCP vendor)

Interenterprise visibility (source: Gartner Group)

Enterprise

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FLUENT visionFLUENT vision Network Network visibilityvisibility

““.. the ability to see processes, events and .. the ability to see processes, events and data throughout the trading partner data throughout the trading partner community.” community.”

““.. the ability to see processes, events and .. the ability to see processes, events and data throughout the trading partner data throughout the trading partner community.” community.”

Across Across enterprise boundariesenterprise boundaries

Network Network velocityvelocity““.. the speed at which products, processes .. the speed at which products, processes and data move through the supply chain.” and data move through the supply chain.” ““.. the speed at which products, processes .. the speed at which products, processes and data move through the supply chain.” and data move through the supply chain.”

Network Network variabilityvariability““.. the ability to manage the unique .. the ability to manage the unique combinations of SCM processes and control combinations of SCM processes and control the infinite permutations of events and the infinite permutations of events and processes as they occur throughout the processes as they occur throughout the supply chain.” supply chain.”

““.. the ability to manage the unique .. the ability to manage the unique combinations of SCM processes and control combinations of SCM processes and control the infinite permutations of events and the infinite permutations of events and processes as they occur throughout the processes as they occur throughout the supply chain.” supply chain.”

“ “ Creating a revenue-enhancing SCM Creating a revenue-enhancing SCM strategy requires enterprises to work toward strategy requires enterprises to work toward the primary definition of collaboration, where the primary definition of collaboration, where enterprises act together for mutual benefit.” enterprises act together for mutual benefit.”

“ “ Creating a revenue-enhancing SCM Creating a revenue-enhancing SCM strategy requires enterprises to work toward strategy requires enterprises to work toward the primary definition of collaboration, where the primary definition of collaboration, where enterprises act together for mutual benefit.” enterprises act together for mutual benefit.”

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FLUENT visionFLUENT vision Real-time Real-time collaborationcollaboration

““Throughout the supply chain, closer Throughout the supply chain, closer collaboration is replacing arm’s length collaboration is replacing arm’s length transactions.transactions..” .”

““Throughout the supply chain, closer Throughout the supply chain, closer collaboration is replacing arm’s length collaboration is replacing arm’s length transactions.transactions..” .”

"Just as Esperanto has failed to become the "Just as Esperanto has failed to become the universal language, we believe universal universal language, we believe universal data semantics and process models for data semantics and process models for business will remain a fantasy.."business will remain a fantasy.."

"Just as Esperanto has failed to become the "Just as Esperanto has failed to become the universal language, we believe universal universal language, we believe universal data semantics and process models for data semantics and process models for business will remain a fantasy.."business will remain a fantasy.."

IntegrateIntegrate but but not overlapnot overlap with ERP with ERP

““(a SCM producer)(a SCM producer) larger challenge continues larger challenge continues to be its lack of a clearly differentiated to be its lack of a clearly differentiated message vs. Enterprise Resource Planning message vs. Enterprise Resource Planning vendors targeting the SCP market.” vendors targeting the SCP market.”

““(a SCM producer)(a SCM producer) larger challenge continues larger challenge continues to be its lack of a clearly differentiated to be its lack of a clearly differentiated message vs. Enterprise Resource Planning message vs. Enterprise Resource Planning vendors targeting the SCP market.” vendors targeting the SCP market.”

ConnectConnect nodes, nodes, notnot assimilateassimilate them them

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SCM today: evolving goalsSCM today: evolving goals

“Agile” SCM = SCP + SCE

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SCM today: SCM today: Largely incomplete functional Largely incomplete functional coveragecoverage

SCP / APS:i2, Manugistics, Adexa, ..

ERP world-class:SAP (APO), JDE (Numetrix), ..

FLUENT

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SCP vs. SCESCP vs. SCE

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Supply Chain Inventory Visibility: Supply Chain Inventory Visibility: An unfulfilled promiseAn unfulfilled promise

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E-commerce impact on business: E-commerce impact on business: SCM is not an optionSCM is not an option

Real-time intranet/extranet communications

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FLUENT FLUENT functionsfunctions

Non-ERPLogistic execution

Local ERP

Local ERP Local ERP

SCM data

Node Planning Node Planning & Execution& Execution

Supply Supply Chain Chain PlanningPlanning

Forecasting & Forecasting & Performance Performance MeasurementMeasurement

Net

wor

k

Supply Supply ChainChainVisibility & Visibility & ExecutionExecution

ERP Interface Data interchange across

heterogeneous systems Based on the XML standard Scriptable transformation logic

Network Execution Demand evasion cycle Alert system for

exceptions notification Workflow-based

Network Visibility Real-time access to different

nodes data Data normalisation and

conversion across nodes (codes, units, ..)

Clear data ownership and visibility rules

Network Modelling Configurable links (push/pull,

visibility, ordering rules,..) Different viewpoints on the

net (by node, product, channel, …)

SCM = An integrated environment for sharing data, communicating events and

taking decisions in a network of independent logistics units

SCMProcesses

PlanningPlanning

Planning

Supply Chain Links

Forecast

Forecast Forecast

XML

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Legacy Logistics

Local ERP

Local ERP Local ERP

SCM data

Net

wor

k

XML

Supply Chain Links

SCMProcesses

PlanningPlanning

Planning

Forecast

Forecast

FLUENT FLUENT ExtranetExtranet

Manufacturing Cooperation On-line delivery plan management Order change/release cycle Notification of order

status/exceptions

Co-Managed Inventory Visibility of planned and

actual demand at any node Allocation of planned

production Replenishment cycle

Virtual Stock Management Warehouses/distributors

network Collection of customers

demand Consolidation and corss-

docking

Application scenariosApplication scenarios

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Example: Co-managed InventoryExample: Co-managed Inventory

Visibility

Visibility,

Execution

Visibility,Execution

Visibility,ExecutionPlanning

Manufactureror distributor

ERP1

Wholesaler

Wholesaler

Subsidiary Custom.

Custom.

Custom.

Custom.

Custom.

Custom.

ERP3

ERP2

Demand

Production,Inventory,

Movements

Stock levels,Custom. orders

Availability,Order status,

Shipments

Orders

Availability,Shipments status

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Example: Co-managed InventoryExample: Co-managed Inventory

Visibility,

Execution

Manufactureror distributor

Wholesaler

Wholesaler

Subsidiary Custom.

Custom.

Custom.

Custom.

Custom.

Custom.

Verify availability

Publish order status

PublishDemand

16P.Paganelli, Gruppo Formula

Visibility,

Execution

Manufactureror distributor

Wholesaler

Wholesaler

Subsidiary Custom.

Custom.

Custom.

Custom.

Custom.

Custom.

AdvantagesAdvantages

On-line access to SCM data• From every point of the

network• According to existing links and

rights• Aggregated on more nodes • In the viewing node format

or in the original format

Inter-company processes• Notification of demand• Orders negotiation• Alerts in the execution phase• Workflow automation

Decentralised system• Each node is responsible for

(pays for) its own data• Preservation of existing local

standards (product codes, units, currency,..)

Interface to existing systems

• Different ERPs (Formula,SAP,Baan ..)• Legacy systems and other tools • Transport-independent (XML)• Calling conventions independent• Scriptable conversion logic

Thank you for your Thank you for your attentionattention