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Responsive Supply Networks and Standards

My colleague, David Frankel, recently wrote a blog post entitled Business Networks: Powered by Business Suite 7 and Standards.  His post serves as a good introduction to this post, where I will begin to explore the concepts further and focus on one aspect of everyone’s business where standards are most critical: the supply chain. 

Increasingly companies are relying on a wider array of partners to accomplish their daily business goals.  This includes out-sourcing specific functions that aren’t core to your business to companies whose sole focus is that particular function, as well as relying on supply chain partners to get the right product to the right place at the right time. Both of these types of business processes require varying degrees of cross company co-ordination, but the movement of physical goods from company to company can make this type of coordination even more complex.

Cross company coordination currently lives in email and spreadsheets, which certainly is an improvement over fax or snail mail, but still leaves a lot to be desired.  Standardizing the data formats and transmission mechanism could remove a lot of friction from the cross company business processes by enabling the information to flow smoothly out of one system and into another, avoiding the manual labor of cut and paste or error prone data entry.

Supplier networks grow as the global reach of a business increases, and cross company coordination needs to scale accordingly.  One way to improve scalability is to agree on common data formats.  SAP’s solutions for auto-id and serialization are just one example of supply chain systems that support industry standards and enable efficient cross company business process coordination.  In this case, the solution supports the EPCIS standard, which enables businesses to capture events related to physical goods with RFID tags affixed to them in a standard format.  This data, since it is in a common format, can easily be exchanged with supply chain partners to provide status reports on where goods are and what state they are in. 

This capability increases the speed and accuracy with which a company can gain operational insight into its business processes, which in turn enables actionable decisions to improve the business.  This is just one brief example of how standards support in the SAP Business Suite 7 can improve your business network, and is the first in a series of blogs where I will highlight additional areas and/or go into more detail about standards related to responsive supply networks.

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