Talk about networks is all the buzz. Everyone says they are one. Or at least, everyone wants to be one. At ChainLink we receive all sorts of announcement and pronouncements from solutions providers and do give them a fair hearing on what they do — and how they do it. Some recent acquisitions at the aforementioned tech companies got us thinking about networks and just what the differences are from the user’s perspective. Turns out, not all users are interested in an Uber-like experience. But they do want the support of a 3rd party managed service and technology solutions to ease the challenges of complex business interactions and integrations.
Why we need networks
Supply Chain defacto is the interaction of collaborative processes amongst many entities. As the internet evolved, developers leveraged many of the technology advances to create architecture unique solutions for the supply chain solution to align, enable and enhance the supply chain business model. Where in the past, vendors struggled to reduce the number of players in the chain in order to manage the data, compliance and so on, the web has allowed enterprise to keep their options open and to operate more dynamically.
Leveraging web architectures has fostered standards and more agile integration approaches. Yet there is more to managing interactions and trade. If I want lots of partners, there is still a lot of work to do. So a third party solution is managing more services — not just the data, but establishing and auditing business credentials appropriate to the market they participate in, creating work flows, accessing and integrating information, creating standard searches and so on, reducing the work load of the enterprise.
Network providers are pitching the number of members in their networks and/or the amount of solutions they host. So, when we looked at the solutions and how they serve their markets and customers, two paths emerged. Fact is, not everyone needs to join a solution network with a vast number of players — but some do. For example, for procuring commodities I probably always want to see many choices and prices and keep my eye open to new options being offered in the market. Yet for more strategic relationships, say strategic sourcing for a computer server or automobile, the OEM is probably working with a key set of known design partners, so the use and expectations of the network solution will be quite different.
Let’s look at these two perspectives.
Open Networks
In a dynamic trading environment or market, a network with a lot of pre-built connections is desirable. A buyer wants to discover new players, products, services and prices — often dynamically. As a seller, all those pre-built connections are very valuable, making it easy to be discovered and get connected to prospects and customers. The solution provider supports the exact compliance preference for the trading partner community, reducing order to cash/ procure to pay cycles and noncompliance issues.
For organizations who just have a lot of partners, like transportation companies who on any given day may be serving dozens of new customers as well as their regulars, or general merchandize retailers who have many suppliers, transportation companies and so on that they deal with every day, these types of networks reduce a huge amount of work as well as allow them to evaluate and better manage costs.
These types of large networks have to be highly resilient, secure and scalable since the workload they carry is immense. Examples here range from in B2B Descartes, to a consumer one like Uber. In B2B portals, techniques to allow some enterprise and user personalization are important; but in consumer networks, we all take the GUI as offered from Amazon, Uber or Expedia. Under the hood, they have the ability to pull complex, highly dynamic data, like routes, schedules and rates from carriers, which is très difficult. That is why, in transportation, for example, these open networks have been so successful.
Limited Partnership in a Network
Not all processes and partnerships need lots of choices, and the activities are less dynamic. Strategic sourcing and design as we mentioned above is such an example. When designing and procuring parts for the 2017 MkIV Supra, Toyota has only about a dozen key suppliers involved, with BMW as a key player, for example. So they are not searching for these suppliers, but they do want smooth processes — and a lot more and different data. An example is sharing forecast data or production schedules or inventory status.
There are two basic architectural approaches today in the marketfor managing these:
Portals: The past architectural approach and often still used is the portal. Portals are often used to support a one-to-many approach. This is an effective model when all power resides with the buyer. Organizations like Walmart, GM, Ford and so on, have portals, and it is the responsibility of suppliers and partners to access the data posted on these portals to get their information and integrate into the customer’s portal. Suppliers usually wind up with a fairly large burden of integrating to a lot of portals over time. So they prefer network solutions that also offer technologies to translate and integrate for them amongst many different web sites portals and standards.
Multi-tenant supply chain services: Here common services, code, data, workflow management and so on are offered by the network solution provider as well as the trading partner connection management. Key trading partners can be set up and configured to create can exclusive eco-system of partners. Web EDI, collaborative design, collaborative forecasting models are all common processes in these arrangements.
Retail industry examples of this more limited partnership are: JDA for dynamic allocation or Flow Casting; GT Nexus for Intelligent Fulfillment; Logility for Collaborative Forecasting; e2open/Terra for multi-echelon demand sensing; demand supply matching with One Network; collaborative design with PTC/Windchill; or distribution pooling with Descartes/BearWare.
The role users want the network to play should be considered, then, before signing on.Some providers do play both roles well, providing the scale and tens of thousands of industry connections, as well as robust supply chain solutions. But some only play one role well.
Why Network Architecture
If you think about it, some processes operate in a single location or enterprise vs. others which distribute across sites, locations, enterprise and processes. The portal of the past is a one-up, one-down like EDI — one to one — not a grid-like structure that supply chain probably needs. Today’s business dynamics generally call for new options, since each transaction may require making different choices at each key point — from where to supply from, where to ship to, to which carrier to use. The architecture, then, has to be able to sense what the business logic needs to explore and seamlessly transport instructions, move or access data and so on across multiple nodes, across fire walls and so on to complete a ‘simple’ transaction. We take for granted that all the searching, integrating, translating and so on can be done, but it turns out that not all providers are up to date technically to perform these feats.
In addition, data is just getting a lot more complicated. All those formats — video, voice, search, social, sensors and location as well as traditional enterprise data, need to be understood, harmonized, translated, co-related and so on. These types of complex services need to be provided — a holistic pallet for the user.
Conclusion: Wish list for the Future in the Network
Networks have become the preferred platform for inter-enterprise processes. And yet, we are just at the beginning of this network phenomenon. The network approach can genuinely solve many industry issues over time, as more organizations adopt them. Today there is more focus on procurement, but in the future we will see networks tackle some thorny problems such as Product Data Management, content acquisition and sharing, integrating/leverage trade data Import/Export to support other business processes, and full traceability of critical products.
Yes, there are already solutions in the market for these, but as yet they are not as popular as transportation and procurement.As the enterprise gets used to 3rd party platform services as a host of, not only the technology, but a facilitator of better business practices, organizations will turn more to these 3rd party providers to introduce, mediate, and manage so many data types and processes across eco-systems.
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