High Tech

A Flexible Approach to Solving High Tech Supply Chain Challenges

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	Executive Summary
	Building Block Solutions
	Iterative Supply Chains
	About the Analysts

Executive Summary

Optimizing supply chains is key to achieving manufacturing profitability. But it's a tough challenge for high tech companies juggling changing technologies, short product lifecycles, volatile customer demands worldwide, and regulatory and standards compliance. Information technology can be an important tool for management teams, yet many high tech manufacturers "worry about not being able to keep up with the Joneses because of the costs of the investments," says Shoshanah Cohen, PRTM's Lead Director, Supply Chain Management Practice, Western U.S. & Asia. PRTM is a management consultancy focused on supply chain operations and related issues.

Fortunately, it does not take a high tech giant to make smart use of technology and improve a supply chain. According to Pleasanton, Calif.-based NetWoven, a Microsoft partner and integration consultancy, even small and midsize high tech manufacturers can make their supply chains work for them. And the Microsoft application platform—including Microsoft BizTalk Server, Microsoft SQL Server, Microsoft SharePoint Portal Server, and Microsoft Visual Studio—can form the foundation to let them control their own processes while closely working with suppliers and customers.

Acting, Not Reacting

"We see a lot of midsize companies starting to automate their supply chains," says NetWoven CEO Niraj Tenany. Companies are looking to speed transactions with customers and suppliers and apply business intelligence capabilities for real time alerting and trend analysis. "A tightly integrated supply chain can improve the predictability of both demand and supply, and early warning systems can notify you when critical things happen."

Users in a high tech company can benefit from supply chain automation in many ways. Consider the following scenarios. Marketing can begin to receive up-to-date sales data piped directly from customers and use it to create a more accurate forecasting system. That same sales information can also help manufacturing plan their operations better. And through automation, vendors can provide the manufacturer with near real-time parts availability so purchasing will immediately know who is able to provide quick turnaround for a rush order.

BizTalk Server's features make it an excellent application platform for implementing such solutions, starting with the ability to work with the existing systems of business partners and customers. "There is data transfer that needs to happen," says Tenany, and BizTalk Server is designed to facilitate the flow of data among different applications no matter where they are located—whether within the four walls of a single company or halfway around the world.

Core disciplines for top supply chain performance

Source: Strategic Supply Chain Management, by Shoshanah Cohen & Joseph Roussel (McGraw-Hill, 2005)

The foundation for business-to-business communications is industry standards and protocols. For example, high tech companies have collaborated, and agreed on, an approach to supply chain communications and control called RosettaNet—and BizTalk Server has built-in support for it. Equally important, says Tenany, "The BizTalk Server framework is extendible. If standards don't exist today, you can build them in later." Because there are many third-party software vendors building BizTalk Server adapters for specialized needs, the wait will likely be short.

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Building Block Solutions

BizTalk Server owes its flexibility to its underlying architecture. Instead of requiring that companies directly fuse applications and processes, it treats them like building blocks that have defined ways data enters and leaves. Companies do not need to bother with what are in the end unnecessary details of what goes on inside each block. So a company can manage the data flow at the heart of any supply chain transaction without the far more difficult and expensive task of directly knitting together a set of software applications.

A high tech company can add or remove blocks (which can even represent partners) as business demands without having to change the overall supply chain support system. This approach means that a change in one of the blocks will only have a minimum impact on the integrated supply chain.

General benefits of BizTalk Server

Source: NetWoven, November 2005

As importantly, BizTalk Server can achieve building block integration within the heterogeneous technical environments that are common in the supply chain processes of high tech manufacturers. "You have to make partner applications work together," says Tenany. For example, while his team often uses Microsoft SQL Server as part of a solution because of its natural affinity with BizTalk Server, virtually any major database can become part of the supply chain system.

This integration extends to the critical back-office systems whose data is the lifeblood of the high tech company. Without the ability to work with other key in-house applications, such as ERP and CRM systems, supply chain integration would have limited effectiveness. BizTalk Server is ready to work with virtually all enterprise systems, from Microsoft Dynamics applications such as Axapta, Great Plains, and Navision, to suites from SAP or PeopleSoft. This range allows the supply chain to scale to any need, whether for a boutique independent software vendor to the largest names in consumer electronics.

Without the ability to address what must happen in real time, the business will never have control over its supply chain. NetWoven turns to BizTalk Server's complex workflow routing to handle the operational aspects. "The BizTalk Server workflow and orchestration are easy to understand and make it easy to develop applications," Tenany says.

By using workflow and message routing, NetWoven can automate the thousands of tasks that go into normal supply chain operations, all the while implementing BizTalk Server's business logic to ensure that the activities are intelligently undertaken. "You can trigger specific events, you can get real-time information, and you can get approvals along the way," he says. For example, if a buyer makes a purchase over a Web site, BizTalk Server might add the person to the customer database, pass the information to the company's CRM system, and alert the marketing department.

Still, with supply and demand volatility a fact of life in high tech, supply chain problems will come up that demand immediate attention. That's when Tenany turns to BizTalk Server's Business Activity Monitoring (BAM) to provide real-time alerting. Using BAM, management can choose to monitor any business process. If the results swing outside of prescribed limits—in other words, something goes "wrong"—then BizTalk Server can alert any number of people. By automating systems and reducing manual interventions to critical cases, a company can increase business efficiency.

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Iterative Supply Chains

An added benefit of using BizTalk Server is how it fosters an iterative approach to project development and deployment, which NetWoven strongly favors. "I typically allow three months for a project, starting from analysis and design to the first iteration of implementation," says Tenany. While the initial version may be modest in scope, his consultants continue to extend and improve upon it over additional iterations.

By developing this way in stages, a company has the opportunity to redefine and expand its initial requirements. For one high tech client, Tenany turned to Microsoft SharePoint Portal Server to help the marketing organization post events such as Web seminars and conferences to the company's Web site. "By automating the posting process, Tenany says marketing now plays a bigger role in demand generation." That's a very powerful integration and we do it using BizTalk Server."

Despite the advantages of staging development, Tenany has found that many high tech manufacturers still try to implement solutions with a "big bang" approach, doing everything a business envisions in a single step. But a company using an all or nothing strategy risks the latter, as projects become overly complex and candidates for failure. That could put a company well behind its supply chain goals.

Steps for iterative development

Source: NetWoven, November 2005

When NetWoven first introduces the concept of iterative development to clients, IT management often reacts by saying that the discipline appears too slow. This happens because they can see only a subset of the functionality they have envisioned rolling out. Or they may be uncomfortable with what appears to them as an unconventional way to develop software. "But it really increases the reliability and reduces the risk of the solution," explains Tenany. Iterative development also helps demonstrate functional milestones to business users, making them more comfortable with progress as they see results along the way.

All the Microsoft application platform products work well with iterative development because a company can add functions and change parts without having to overhaul the entire supply chain structure. "The Microsoft framework allows you to build modules, then hook them up to build systems," says Tenany. In other words, a company can use BizTalk Server to build step-by-step on its previous supply chain work.

Tenany counsels high tech companies to not only start small and expand, but to carefully choose a supply chain partner for a pilot project. Ideal partners are both highly trusted and at parity in terms of the technology they have implemented. With the choice of the right partner and BizTalk Server's flexible data architecture—and wide selection of adapters for working with other systems—any midsize company can have powerful tools that can improve its supply chain.

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About the Analysts

PRTM

PRTM works closely with leading companies worldwide to achieve business results and is a recognized thought leader and innovator. The company has practices in product development, supply chain and operations, customer service and support, sales effectiveness, and strategic IT management, as well as a benchmarking subsidiary. It serves clients in multiple vertical sectors.

NetWoven

NetWoven, Inc. is a Microsoft Solution Provider and technology and systems integration company founded in 2001. The company's business model leverages centers in both United States and India to assist with systems implementation. The company provides both off-site and on-site services and is able to create high value-added solutions that meet business needs.

Brian Mulvey is a senior writer for Triangle Publishing Services Co. Inc. with extensive experience describing how to optimize supply chains for various manufacturing industries. Triangle provides articles for BusinessWeek, CIO, CFO, Managing Automation, and other publications.

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