Collaboration Provides Virtual Workplace (sidebar)

Supply chain collaboration implies sharing information on the movement of goods with suppliers and customers. Some collaboration on orders and shipments can be done internally, but for the most part, the benefits of supply collaboration come when manufacturers exchange data back and forth with their partners.

“You can look at collaboration as any way you work with customers and suppliers online,” says Greg Gorbach, director of collaborative manufacturing at ARC Advisory Group, in Dedham, Mass. “Supply chain collaboration is about managing materials,” says Gorbach. “You want to receive the order, produce the product and schedule the delivery, and do it in a collaborative process.”

At Highjump Software Inc., a collaboration vendor in Eden Prairie, Minn., President and Chief Executive Officer Christopher Heim notes that customers are eager to extend their IT systems out to their partners. “The biggest area where we’re seeing collaboration is back to the suppliers,” says Heim. “A lot of people have optimized their own warehouse, and now they want to optimize their supply chain.”

Heim also notes that system-to-system communication between partners in the supply chain can assure replenishment at lower inventory levels. “Say I’m doing assembly and my stock falls below five compressors. The system sends an e-mail to my supplier and asks it to send an order,” explains Heim. “Then the supplier’s system sends a note verifying that the order will arrive on a certain day, and an acknowledgement is sent when it actually ships. It’s a Web interface with system-to-system communication.” Because the resupply is automatic and predictable, the manufacturer can maintain a lower level of inventory without risking outages. “It has the potential to reduce overall inventory,” notes Heim.

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