Nothing new, just getting better

31 Jan 2003

The Irish distributor of JD Edwards software explains how integrated business solutions are starting to change the way companies operate

“If we look back over the last 10 years, the arrival of enterprise systems gave, for the first time, a fully integrated end-to-end type solution,” says Tiernan Quinn (pictured), director at Software Resources. His company markets and distributes JD Edwards’ products in Ireland. “I suppose that the evolution of e-logistics is just the natural extension of that. Two to three years ago everyone was talking about the supply chain and how it impacted on business, so the reality is that none of this is new.”
Warehouse management, according to Quinn, is about being able to maintain information about where a given piece of inventory is within an enterprise. But it goes beyond that. “Is it in this warehouse in Dublin, or is it with a third party logistics company? What warehouse and logistics systems do is manage that and optimise the inventory and how you hold it; when you need to ship it; where you pick the inventory from,” he explains.
The coming of the internet, he goes on, adds the ‘e’ and this signifies the ability of third parties, be they customers or suppliers, to have visibility of a company’s information. But again, he says, this has been around for a while.
“Organisations have managed inventory for a long time. However, enterprise solutions allow companies to manage that information just once. Planning is integrated with inventory, which is integrated with sales order management while forecasting systems predict demand,” he outlines. “Planning looks in a warehouse to see if there is sufficient inventory; if there isn’t it looks in raw materials to see if there is enough to manufacture new inventory. If there isn’t enough, the planning system tells the procurement system to buy components from suppliers. All of the information – inventory, financial and planning – is integrated into a single solution.”
The value of this, says Quinn, is in the return provided by way of cost reductions that arise from minimising transport costs and inventory levels. “In an ideal world, if you talk to the sales manager of a company, he will tell you he would like to have sufficient stock on hand to satisfy demand for six months. But the cost of holding that stock is expensive so companies want to minimise outlay. They want to ship sufficient product at the time when it is required so that sales demand can be satisfied and customer service can be maintained at the lowest cost,” he says.
So how does JD Edwards differentiate itself from the competition? “JD Edwards would be a tier one product,” says Quinn. “We have capabilities around transport and warehousing that other vendors don’t have. We are talking here about functionality and capabilities that wouldn’t otherwise be available. For instance, it is possible to hold customer profiles. One customer might prefer to have products sent by the fastest means possible irrespective of cost while another might prefer to have it sent by the lowest cost route.”
“We wouldn’t try to compete at a functional level with SAP,” he admits. “They would be likely to have all of the capabilities we would have. But SAP comes at a significant cost and this has been proven by the experience of many of their customers. We would compete against SAP on the agility of our software. Our software is extremely agile post ‘go live’ and is suitable for those organisations that operate in dynamic environments.”
According to Quinn, it is not just small companies that require their business processes to be dynamic. In any relationship where one party is supplying to a more dominant party, the supplier has to be more flexible. A good example, he says, is in the grocery sector where you have suppliers dealing with the big multiples such as Superquinn and Tesco. The terms of that relationship are dictated by the supermarket that is the dominant party.
“It doesn’t matter if you’re Cadbury’s or Butler’s Pantry,” says Quinn, picking two names out of the air, “the supermarket dictates terms and reserves the right to change those terms.”
In such cases, he says, flexibility on the part of the supplier is critical. “Another aspect is interoperability and collaborative opportunities,” says Quinn. “If you are to have an efficient supply chain, you have to have efficient communications between your solution and the people you do business with. The notion of multiple keying is gone. With extended supply chain operations, organisations want to be able to send a message from their JD Edwards system to a third party application that will receive it and recognise it as something they can do something meaningful with.”
Standards for such inter-system communications are still emerging. “We are still betwixt and between EDI [electronic document interchange] and XML [extensible markup language],” says Quinn. “XML will become more of a defined standard. It is not a message per se, rather a transmission standard. It’s not the same thing as an EDI message. XML is a self-describing data set. The difficulty is that it is not clear whether the XML message is a purchase order or an invoice.”