February 20, 2006 (Computerworld) --
"I don't think anyone anymore looks at the world we live in as just a domestic supply chain," says Bob Schwartz, CIO at Panasonic Corporation of North America. "The issues of visibility are becoming extremely critical, and that's a huge area of our focus at Panasonic." Although Schwartz's supply chain lies mostly in North America, it has links to centralized systems at Panasonic headquarters in Japan. The trend in retailing for suppliers to take over responsibility for in-store inventories presents challenges as well as opportunities, he says. This "push" model replaces the old "pull" one in which Panasonic would just wait until it got an order from Best Buy Co., for example, and then fill it. Because Panasonic must now know what is in Best Buy's warehouses and on its store shelves -- even taking financial responsibility for the inventory -- visibility is obviously critical. Here's how it works: Best Buy collects information on sales of Panasonic items at its stores' checkout stations and sends it to a unit of i2 Technologies Inc. in India; Panasonic has outsourced supply chain analytics, such as forecasting, to the service provider. I2 then sends manufacturing recommendations back to Panasonic, where it becomes the basis for factory schedules. Schwartz says it's all about partnerships now -- collaborations with channel partners like Best Buy, service providers like i2, delivery companies like FedEx Corp. and others. That shifts the need for supply chain visibility from internal systems and processes to external ones. A few years ago, there was a shift in focus at companies from internal systems to the internal business processes in which the systems are embedded, and now the focus is shifting again to processes integrated across these partnerships. "Now you need a much broader view," Schwartz says. Vanishing Inventories Another trend driving the need for supply chain visibility is the move by manufacturers to just-in-time inventories. When buffer inventories are big enough to meet several days' demand, you can afford to be a little in the dark, but when stock levels are measured in hours or even minutes, real-time visibility with high accuracy becomes critical. Does that raise the issue of time zones, too? DaimlerChrysler AG, for example, has 15 assembly plants in North America. Parts and supplies stream in from 2,000 locations, with each plant off-loading some 600 truckloads a day. Inventory levels inside the plants are measured in "a couple of hours," says David Hodgson, supply vice president at Chrysler Group. The company has a "central tracking group," which Hodgson likens to air traffic controllers, to monitor and respond around the clock to automated alerts that signal glitches in the supply
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"I don't think anyone anymore looks at the world we live in as just a domestic supply chain," says Bob Schwartz, CIO at Panasonic Corporation of North America. "The issues of visibility are becoming extremely critical, and that's a huge area of our focus at Panasonic." 
Turning information into a Competitive Advantage
Download this Technology Briefing, free, compliments of Dell. 
Get this white paper now!
Read up on the latest ideas and technologies from companies that sell hardware, software and services. 
The Enterprise Search Zone
IDG survey says...that while migration to Windows Vista looms inevitable, the road is fraught with challenges from application compatibility to integration issues to upgrade costs. Fortunately one company is stepping up with solutions and services to help manage Vista in a mixed environment and to automate key aspects of that management chore. 
Computerworld