Supply Chain Management
-- Anjana Srikanth
Abstract: Geography is irrelevant in today's world.
How did this happen? Who changed it? The Web, of course! The Internet
and it's related technologies are redrawing the boundaries of organizations
today. Business headlines herald a revolution in the way businesses are
conducted leveraging the Internet. This article is a case study about
a freight carrier that has become a leader in Supply Chain Management
(SCM) today. Using the net to manage inbound and outbound flows from the
time an order is made to mapping out a complete distribution plan, they
are recognized for their EZTDBW (easy-to-do-business-with) customer orientation.
Haven't we heard enough about how nearly all web sites were founded (or
cofounded!) in garages? We've also seen how many of them relapsed into
near oblivion. A few years ago business sites used to be simply places
for companies to enthrall their visitors with marketing material and histories.
But today customer expectations have outstripped the rate at which web
pages are created - believed to be about 30 pages per sec. Customer requirements
have morphed into something more complex; customers have turned architects
while companies are mere contractors. Interactive and informative web
sites - places to track orders and confer with online help desks and access
records of buying histories are what the customer demands.
Let us review a brick and mortar company who leveraged Internet technology
to enhance their "core competencies".
Organization: Viking Freight Services Inc.
Application: Freight carrier (LTL)
Scope: 5000 employees
Viking Freight Services, Inc. is a company that specializes in next-and-second-day-door-to-door
less-than-truck-load (LTL) services through a network of 66 centers in
the Western United States. A leading freight carrier recognized by their
on-time delivery performance record, they have developed into a premium
global provider of transportation, e-commerce and supply-chain management
services. A part of the FedEx group of companies, they are headquartered
in San Jose, California. Founded in 1966, their work force of about 5000
handles 13,000 shipments in a day. The American Trucking Associations
Presidents Trophy handed them a safety record award in 1999, one among
the many that adorn their shelves.
The need for a dynamic Web presence
Until a few years ago, all the information that Viking's customers were
aware of was when their shipments left and when they arrived. The black
hole that existed between origin and destination wasn't easy to eliminate.
Also, aging legacy systems had become costly and difficult to maintain.
Customer records urgently needed to be updated and integrated with information
from other departments. Electronic Data Interchange (EDI) helped them
develop an efficient Document Imaging System, but this still didn't address
all their customer requirements.
Viking's customers ranged from Fortune 100 companies to smaller businesses
with revenues under $2 million. The former required highly integrated
information exchange while the smaller enterprises were comfortable with
rapid and frequent communications. With such varying information needs,
the IT challenge was to provide a solution that met the needs of customers
at all levels. Web-based applications became the undeniable solution.
They realized that a data storage center that provided a consolidated
view of all customer activities and that was universally and instantaneously
accessible was essential. A net-based infrastructure seemed to be the
answer and therefore Viking collaborated with Sun Microsystems and deployed
their iForce initiative to leverage the power of the Internet. Sun helped
them strategize their services and forge a well-defined supply chain,
entirely dictated by customer requirements.
Satisfying customers in newfangled ways gave them a competitive edge,
not to mention the added benefits of reduced costs and the seamless flow
of data within heterogeneous levels in the company. Web-based transactions
afforded greater efficiency levels that ensured a tighter supply chain.
What did their web enabling process entail?
An infrastructure upgrade with the use of a new suite of e-tools, EDI
and satellite tracking was what they aimed for. Using the web enabling
services provided by their Application Source Provider (ASP) they accomplished
this in a swift and low-risk manner. Achieving the same internally within
their own company meant higher risks and costs. An outsourced solution
proved to be more cost-effective.
EDI helped record freight invoices, shipment status and load tenders
thereby eliminating severe backlog. Data marts and Data warehousing were
thus made more proficient, but static data wasn't of much use. In an era
where the customer is king, critical data delivery to customers over the
web using state-of-the-art technologies was imperative. Satellite tracking,
bar coding helped their customers track shipments with pinpoint accuracy
on a real-time basis.
Establishing more than a simple web presence meant dynamic and interactive
web pages. IShipViking.com was launched with this in mind. Not just a
pretty web site it was a mini data center that gave customers immediate
access to all transactions. It allowed proactive tracking of the pipeline,
the kind of tracking that helped decipher problems much before they disrupted
a shipment. On the whole it was a site that furnished greater visibility.
All that a customer needed to do was enter a password and then travel
with his shipment, albeit virtually! A drop-down address book helped users
enter information about their shipments and destinations. This eliminated
the need for reentering data and the introduction of errors. A customer
could create, print and email bills of lading using the bill of lading
generator and send these forms to multiple consignees at remote sites.
Instant access to shipping activity reports, collective summary reports
and email delivery notifications helped improve operations and inventory
thus achieving an optimal value chain. Visibility of the product at all
levels meant a greater degree of transparency in all operations. Employees
performed more efficiently and shipments began reaching destinations in
All shipments could be traced and tracked until their delivery. Trucks
were equipped with satellite modems to ensure 100% nationwide coverage.
Calculation of customized rates and customer-scheduled pickups became
more of a reality. On arrival, the driver scans the bar code on the package
with his handheld computer that transmits this information to the company's
headquarters from where an email message with the dates and times of delivery
and receiver's signature are sent automatically to the customer. To quote
Keith E. Lovetro, Viking's VP of marketing, the iShipViking.com web site
"gives customers an integrated set of account-level information tools
that help simplify their daily work processes."
Returns on upgrading to the Net
By upgrading their fragmented data centers and linking them with the
web helped Viking to bridge the technological distance that existed between
origin and destination. A united web-based infrastructure also equipped
them for future e-commerce expansions.
Internal access and relay of real-time information - package, driver
and routing information and then linking this information to their freight
tracking system ensured that shipments reached on time. New Internet technologies
using XML or eXtensible Markup Language helped in the smooth flow of data
between disparate systems both within and outside the organization.
The company could now respond with off-hour pickup and delivery systems
and build 24-hour terminals to handle freight at a moment's notice. Fostering
an intimate and long - term relationship with customers helped them offer
a string of services that weren't possible before.
Armed with the new e-business model, a trucking company that moved goods
from one point of the highway to another strategically transformed itself
into a dominant provider of a large piece of the supply chain. Incidentally,
in August this year, they extended their second-day delivery areas thus
shortening the supply chain!
What does this confirm? That Internet ROI isn't an oxymoron. It is dependent
on your customers and how well you treat them.
www.sun.com: The home page of Sun Microsystems,
Viking's chief web enabling ASP.
In addition to offering creating Supply Chain Management as a service,
we also offer other services like Business Process Engineering, Porting
Legacy applications to the web and Enterprise Application Integration.
Please contact us here
for more details.