Supply chain collaboration yields efficiency

COLLABORATION HAS always been a part of any economy, but the information age has breathed new life into the meaning of the term.

Although much of the focus in business-to-business e-commerce has been on expediting transactions, businesses are discovering that the flow of information within a supply chain is a collaborative process that is at least as important as the movement of dollars.

This is especially true for manufacturers. "New, Internet-based tools are starting to emerge to enhance the relationships and dynamics between manufacturers and their suppliers," says Lucine King, senior analyst at Forrester Research in Cambridge, Mass.

King recently completed a study that predicts a rapid growth in the adoption of these tools in the next two years. The reasons, she says, are compelling. "Over 75 percent of the companies we surveyed say the new technologies will enable them to bring products to market faster while reducing the errors in production processes."

Industrial-strength information

It isn't just about suppliers. Richard Gray, director of e-business and information systems at SPX in Muskegon, Mich., is using the Internet to share data with his customers.

Gray works in the Lightnin division at SPX where the job is making industrial mixers and agitators. This is equipment that you don't just buy off-the-shelf.

"We build these to order," Gray says. "We need to have the detailed specifications -- things like viscosity, blending times, and volume of the material -- before we can start to make the appropriate machine."

Such information is critical because it determines specifications such as the motor speed, impeller design, and shaft length of the product. And, perhaps more importantly, if any of this information is incorrect, it can mean big losses for SPX.

"We don't just guarantee our products for mechanical functions," Gray says. "We also promise [that] they will support the process. In other words, a machine could work perfectly and, because of one specification error, SPX still has to eat the cost."

So it is no surprise that Gray, the point man for information, felt a certain amount of pressure to ensure that the information was accurate. "It was a big problem for us," Gray says. "We sell to third-party reps. They funneled information to us via phones, fax, hard copy -- real old-technology stuff. It was extremely inefficient and error-prone."

So in November, hoping to find a better way, Gray and his colleagues started testing a complex system of software components. It consisted of a homegrown sizing and selection application; software from Big Machines, a Foster City, Calif., company; and connectivity software from webMethods in Fairfax, Va.

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