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Manufacturers need better supply chain integration, says Sterling survey
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29/11/2007
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European businesses speak different languages when they’re exchanging supply chain data – meaning a lot more work to do in terms of data integration and automation.
That’s among key findings of a survey among IT decision-makers in UK, France and Germany by Sterling Commerce, which reveals poor automation and missed business opportunities for manufacturers.
It shows that integrating external business data with internal back-end systems is the single biggest IT challenge still affecting trading communications in the supply chain.
Lack of integration means retail and manufacturing companies are heavily reliant on manual communication methods to send and receive order and purchase documents amongst supply chain trading partners, explains Dave Carmichael, senior product marketing manager at Sterling Commerce.
“Companies are struggling to automate the order-to-cash fulfilment process and electronically enabling trading with suppliers and customers quickly & efficiently,” he says.
According to the research, only 50% of European trading partners use any form of electronic communication as a means of sending and receiving order information – with just 26% using VANs (value-added networks) for conventional EDI. Interestingly, it also finds UK companies better equipped to handle electronic trading than their French counterparts – but behind German businesses.
Almost half (46%) said integrating back-end IT systems is placing the greatest burden on skilled resources and will be the most costly IT issue to resolve. European IT decision makers rated meeting customer and supplier mandates to handle new EDI requirements as their second biggest challenge in supporting trading partner communications, suggesting that the problems associated with integration are only likely to get worse.
“As supply chains continue to grow and extend across geographical boundaries, the challenge of managing the complexity of a growing business community becomes even more critical to achieving profitability and customer satisfaction,” says Carmichael. “Globalised businesses need to manage B2B collaboration with multiple trading partners with often wildly different technical infrastructures, communications standards and protocols for exchanging electronic data. Not only does this create a significant burden on resources, but it exacerbates the integration challenge even further.”
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Author
Brian Tinham
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