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Connect to Suppliers with Internet Technologies
Lean companies
- Use Internet technology to connect to their suppliers
- Find that the Internet technology makes it much easier to establish and follow consistent business processes with suppliers
- Exchange not only transaction data, but also a wide variety of other information (quality data, schedules, engineering changes, prototype and pilot run results, returned goods authorizations, order status, etc.)
- Can easily get information immediately to everyone involved in both companies
- Customize web pages for key suppliers
- Publish technology roadmaps, capacity planning, engineering data, and quality programs
Traditional companies
- Have communication difficulties caused by foreign languages and distant time zones
- Fail to get the word to all with a need to know
- Have difficulty telling the supplier where to find the official source and location of important pieces of information regarding schedules, quality deviations, engineering changes, etc.
- Waste immense amounts of time and manpower exchanging information
Benefits of Lean
- Reduces confusion, making your company leaner
- Provides an official place for publishing many types of information and data
- Reduces headcount at both companies
- Brings your key suppliers closer, improving the partnership
- Publishes timely agreed-upon metrics such as quality and delivery data to better motivate the supplier
- Gives engineering, manufacturing, and quality & reliability people instant access to information formerly filtered through purchasing
| "However, EDI systems are costly to install and operate, so no company ever
connected with more than the top 20% of its trading partners', says John J.
Fontanella, director of supply-chain research at market-watcher AMR Research Inc.
in Boston. 'Now the Internet is cheap enough that even small job shops can
afford to hook up. As a result, we'll see 90% of manufacturing move to the
Internet in short order', predicts Fontanella."
- Business Week, October 4, 1999
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| "That's because every manufacturer is surrounded by rings of suppliers and
distributors. To become customer-centric in the Internet Age, they all will
have to perform complex, synchronized movements. The solution: also the Internet."
- Customers Move into the Driver's Seat, Business Week, October 4, 1999
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| "Dell can now complete 90% of its purchases entirely online."
- Business Week E.BIZ/September 18, 2000
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