The Supply Chain Network @ Internet Speed: Preparing Your Company for the E-Commerce Revolution

Fred A. Kuglin and Barbara A. Rosenbaum

AMACOM, 2000

ISBN 0-8144-0595-9

246 pages, $39.95

To order, call (800) 714-6395 or visit www.amanet.org

The past year has provided a huge dose of reality to those once awed by the wonders of e-commerce. The value of many publicly traded dot-coms has plunged, many have folded, and even the boldest venture capitalists now think twice about pouring money into promising ideas.

Even so, the world of business is being transformed by the Internet and the technology that is enabling electronic commerce. Both old-line companies and the most innovative startups are deliberating on how to implement the business processes that will enable them to use the true revolution in technology to create value. But although deliberation is essential, as evidenced by the failures of so many e-commerce initiatives, so is speed.

Fred Kuglin and Barbara Rosenbaum, the authors of The Supply Chain Network @ Internet Speed, are experienced business consultants. Kuglin is vice president of supply chain operations for Cap Gemini Ernst & Young LLP, and Rosenbaum is a director with that firm's global supply chain service line. Undoubtedly, they have seen close up the pressures on clients to leap into the Internet age, to become what they call ".companies." They clearly recognize that businesses must indeed prepare—and quickly—for the changes that are already upon us. But more importantly, they understand that businesses must focus on how these changes will create value.

At the heart of their analysis is the belief that technology will enable businesses to shift from linear to networked supply chains. But that transformation, they contend, first depends upon an understanding of industry and company dynamics. And then, it depends upon the adoption of e-commerce processes and technologies with a focus on creating wealth and improving operations. An e-commerce solution cannot simply be imposed. In the authors' words: "It requires a holistic transformation process that is customer-focused, technology enabled, and process driven. ... All participants in the networked supply chain must collaborate and be Web-connected to achieve networked supply chain excellence at Internet speed."

The bulk of the text focuses on the specific challenges facing several key industries and ways to meet those challenges—as seen through the eyes of fictional CEOs. This approach can be distracting, but it does focus reader attention on the why of change—to create value in a rapidly evolving competitive environment. The authors identify five drivers of shareholder value—profitable growth, cost minimization, tax minimization, working-capital efficiency, and fixed-capital efficiency. They identify what they believe are the key drivers for each of the major industries in their analysis and discuss strategies for approaching them. In each, they discuss potential technology-driven solutions for solving specific industry problems—but always with the understanding that technology is a crucial tool and not a panacea.

Much of what they discuss will be familiar to readers of this magazine. What they add to the understanding is the important focus on how technology can transform supply chains to create value, with specific approaches to the transformation process.

Supply Chain and Transportation Dictionary (4th ed.)

Joseph L. Cavinato

Kluwer Academic Publishers, 2000

ISBN: 0-7923-8444-X

400 pages, $175

To order: Call (781) 871-6600 or visit www.wkap.com

Have you ever come across terms like demurrage or released value rates, where you have a vague idea of the meaning, but you're not really sure? If this is a recurring problem, then the Supply Chain and Transportation Dictionary should be in your business library. The just-released fourth edition defines these two terms, plus 5,000 more.

The evolution of this publication in many respects parallels the evolution of the supply chain concept itself. The last edition, also prepared by educator Joseph Cavinato and released in 1989, was called Transportation-Logistics Dictionary. As the title suggests, most of the terms in that book were transportation-related.

Though it retains a heavy transportation orientation, the latest edition also incorporates a number of supply chain terms. Vendor-managed inventory, efficient consumer response, and disintermediation are among the examples. There's also a sprinkling of e-business definitions with which the modern supply chain professional needs to be familiar.

The fourth edition represents a huge research undertaking and pretty much covers the waterfront—at least as far as transportation and logistics terms are concerned. (With the rate of change of e-business and even supply chain management, it's pretty much impossible for any publication to keep pace with the jargon in those spaces.) So if transportation and logistics are big parts of your job, an investment in the new Supply Chain and Transportation Dictionary is a sound one.

Logistics Software, 2000 Edition

Richard C. Haverly and James F. Whelan

Council of Logistics Management and Andersen Consulting, 2000

$75 for CLM members, $100 for non-members

To order: Call (630) 574-0985 or visit www.clm1.org

After 20 years of publication, the annual Logistics Software survey by Andersen Consulting and the Council of Logistics Management (CLM) ends its run with the 2000 edition. According to CLM, the two organizations do not have the resources to continue with the effort. This is a shame because the survey listings, which come in the form of a CD-ROM, provide a useful directory of more than 1,500 software packages.

The survey does not strive to evaluate or rank software. Rather, Logistics Software provides a tool for performing an initial sorting or search for software providers. Each entry contains basic information on a given package, such as functions (for instance, order processing, materials requirements planning, and transportation analysis), price, and hardware requirements. The entries also provide contact information for the vendor.

The directory is searchable by vendor, software, function, or keyword. This enables companies to discover which offerings fulfill their requirements and then proceed to deepen their search from there.

The CD-ROM provides a good format for the directory, making it easier to search and less bulky than a paper format. Requiring only a Windows 95, 98, NT, or 2000 system, the directory is easy to install and run.

CLM says that it will continue to make the 2000 CD-ROM available in the coming years, as well as the results from previous years' surveys. The hope is that some other organization will pick up the project—maybe taking the directory another step forward by posting it on the Web with links to the vendors' Web sites. Otherwise, logistics and supply chain professionals will have lost a valuable resource.

www.mckinseyquarterly.com

Web site of The McKinsey Quarterly

McKinsey & Co.

The electronic version of The McKinsey Quarterly avoids simply paying homage to the latest in buzzwords, three-letter acronyms, and fad management concepts. Instead, its articles provide thoughtful insights into key issues facing today's business practitioners.

The Web site contains the current issue of the Quarterly and also allows the user to search for articles stretching as far back as 1992. Users can search the archives by keyword, industry, function, and/or region. The Web site offers articles not only from the North American version of the Quarterly but also from its European and Asian editions.

Written by consultants from McKinsey & Company, the articles succeed in taking a new view or angle on the hot topics in business today. For example, every guru and pundit is talking, writing, or presenting on e-marketplaces. The McKinsey Quarterly, however, chooses to look specifically at their role in Asia. In "The Asian Difference in B2B," consultants from McKinsey's Delhi, Mumbai, and Jakarta offices identify four factors that make the Asian B2B environment different from that in North America and Europe. They then discuss how these factors will shape the creation of e-marketplaces. As multinationals begin to spread their e-commerce initiatives to other areas of the globe, this concept of adapting technology to a region's culture will increase in importance.

The quarterly proves particularly strong in its coverage of e-commerce issues. It manages to walk the fine line between being overly technical and being too basic and general. Recent articles on m-commerce (mobile commerce) and virtual pricing are particularly informative.

Beyond e-commerce topics, supply chain professionals will find several articles of interest to them in the site's archives. "The Other End of the Supply Chain" (from the first-quarter 2000 issue), which was written by Jan Holmstrom, Perttu Louhiluoto, and Antti Vasara, is just one of several articles on supply chain management. The authors see the supply chain and the demand chain intersecting at two places: the order penetration point (the place in the supply chain where the supplier allocates the goods ordered by the customer) and the value offering point (the place where the supplier fulfills demand in the customer's demand chain). They explain how supply chain partners can create a win-win situation by moving both the order penetration point and the value penetration point together.

This is a Web site that contains no fluff. Admirably, The McKinsey Quarterly does not overload its site with extraneous information; the main focus is on the articles themselves. If anything, the site may have erred on the side of providing too little information. It contains no information about the print version of the magazine, its connection to McKinsey & Company, or what it views as its general purpose. But overall, by choosing to focus on its strengths, McKinsey has ensured that it maintains a high-quality product.

Making the Move to Cross Docking: A Practical Guide to Planning, Designing, and Implementing a Cross Dock Operation

Maida Napolitano and staff at Gross & Associates

WERC, 2000

ISBN 1-892663-18-X

176 pages, $35 for WERC members, $70 for non-members

To order: Call (630) 990-0001 or visit www.werc.org

The very first page of this useful handbook promises to focus on practicality and not on logistics philosophy or mathematical models. From beginning to end, this Warehousing Education and Resource Council (WERC) book delivers on that promise.

After providing an overview and brief history of cross docking, author Maida Napolitano quickly cuts to the chase and gets down to the actual basics of implementing a cross-docking program. The book divides that process into four phases (assessment and negotiation, planning and design, justification and cost sharing, and implementation and maintenance) and discusses each in turn.

Napolitano provides a detailed look at the implementation process—right down to making sure that the dock floor itself is in good condition. Rather than vague ideas, the text offers specific recommendations on actions managers can take and tools they can use. For example, the book provides examples of three techniques that managers can use to determine which products are best suited for cross docking. These are cube-movement profile, SKU order completion profile, and a shipment variation analysis.

Making the Move to Cross Docking also identifies three different types of cross-docking systems and spends a considerable amount of time detailing how each process would work in the real world. For each system, it describes how the system works in the supply chain; the equipment, information systems, and facilities it needs; and the type of products suited to the system.

This is not, however, a cross-docking sell job. The book points out not only the benefits of cross docking but also the drawbacks and difficulties. And it succeeds in being realistic about what readers can expect from cross docking. As Napolitano puts it, "An objective of maintaining zero inventory and cross-docking everything in the product line is rarely practical. Unless a company has unlimited resources, there will always be products, suppliers, distribution operations, etc., that are not ideal or economical for cross docking." This realistic, practical approach makes the book a must read for all managers looking into implementing this increasingly important supply chain activity.