You likely know the IT buzz words that light up your supply chain people-event planning...alerts and dashboards...wireless information feed from cell phones to radio frequency identification (RFID)...enterprise resource planning (ERP) beyond the enterprise...operational visibility and transparency...supply chain risk management.

These are among the hottest tech trends in the world of global supply chain management. But what do they mean for your company? Nobody expects the CEO to be ahead of the tech curve, but before you approve a costly investment, it pays to be savvy enough to talk the same language as your CIO or IS manager.

Read on and you'll learn not only about these developments, but how they matter most to an operation's bottom-line.

The issues driving the tech trends

If you're like many clients who seek out Greg Aimi for advice, you may be overwhelmed by the move to global right now. Aimi, director of supply chain research at AMR Research, in Boston, Massachusetts-a consulting company devoted to tracking supply chain technology-is finding offshore globalization is forcing many clients to reconfigure their entire supply chain and re-evaluate logistics operations.

It's not just the enormous distance from anywhere in the United States to Central America or Southeast Asia that's creating massive challenges. Meeting export/import compliance and security regulations on a pre-clearance basis, means providing authorities shipping information out front of the shipping process, counsels Aimi. As if that weren't enough, going global means having many more parties to the transaction. Complexities keep compounding: the farther away from home base, the longer the supply chain, the more individuals participating and the greater the need for data transparency.

Going global means you need to be able to collect, store and disseminate vast amounts of information. Optimally, this should be done using wireless transmission, whether it's through cellular, satellite or radio frequency communication. Your whole operation should be integrated to be able to process data and release it to all supply chain parties quickly and efficiently online or through a Web site.

Given these pressures, some major companies-including tech businesses like Dell Computer-are re-evaluating their supply chain networks, says Aimi. "They're considering the difference between low-cost manufacturing in Asia versus meeting demand. Dell, for example, is opening a manufacturing center in North Carolina for high-demand PCs to meet both the American Northeast market and Europe," he explains.

Larry Ferrere, chief marketing officer for Manhattan Associates in Atlanta, Georgia, finds lots of companies struggling with the increase to offshore sourcing and manufacturing. But, he also sees smart companies re-evaluating their sources and practices, particularly exploring ways to alter supply chains to source goods from Asia.

For these reasons, he believes regulation, globalization, and integration are the most important global trends managers must stay on top of in 2005. "All three are causing companies to look at business systems, re-evaluate, and implement some sort of technology change," Ferrere says. The challenge is how to continue effectively managing supply and demand when suppliers are farther away, and how to maintain control and visibility. "A lot of ERP and supply chain systems don't fully address this," according to Ferre. What's needed are more flexible systems, able to adapt to changing global trade environment and interface with other systems that are needed. "People might say it always is globalization and regulations, but today, more than any time in my career spanning a couple of decades, these are absolute business drivers causing managers to re-evaluate their systems," cautions Ferrere.

Technologies to keep you competitive

In moving further and further offshore, companies must increasingly rely on the logistics assets of others. This means new systems and thinking with an emphasis on "coordination and control," explains Art Mesher, CEO of Descartes Systems Group, a global supply chain vendor based in Waterloo, Ontario.

The key to success is recognizing that technology systems designed for short supply chains covering regional territory aren't adequate for today's growing supply chains. Managers must first recognize this difference and then identify where "the decoupling point is" between a short and long supply chain.

John Lebowitz, senior vice president for strategic business development at the 3PL Kuehne and Nagel, goes one step further. He advises managers to think in terms of what's required for planning, execution and event management. For example, he says Vendor Managed Inventory (VMI) type of applications are becoming prevalent as firms look to move inventory to their suppliers, requiring precision planning and communication among the supply chain partners.

He also advises managers to explore flexible and robust 3PL Order Management Systems (OMS), which "are becoming more and more important as OEMs and distributors look to provide optimal costs and service to their customers, as orders are no longer just moving from A to B. Companies now require multiple combinations of point-to-point in order to provide postponement at the latest point of customer acceptance."

As for pulling all the technologies together so data flows into one central repository and can be analyzed in real-time, there are vendors like PeopleSoft working on extending ERP systems-originally designed to integrate a company-to include the entire supply chain. Dave Scott, vice president for marketing and strategy for PeopleSoft Global Services in Pleasanton, California, says, "the next level of software has to provide interoperability and interconnectivity so everyone's talking the same language. When you ask for information you need to know it's going to be there, and preferably in a self-service way."

The good news, says Scott, is that PeopleSoft has products in its Enterprise line that help companies integrate "two to three levels removed" from home base. Global corporations, for example, should be able to communicate in the same fashion from a natural resources supply base in Africa "all the way through the refinement process and to the inventory system at Wal-Mart in the U.S. for finished goods. You can do that all around the world at multiple sites with one software package," he says.

How you view all that data that's cranking worldwide is another crucial factor that many vendors are tackling under the general header 'visibility.' Maintaining control of your own organization first-what Eugene Blaine calls "operational visibility"-is the focus of Atlantic Global's software suites.

Based in Leeds, the United Kingdom, Atlantic Global works a great deal on the credit management and human resources side of global trade with clients like pharmaceuticals and banks. Tagging the right person do to the right job and then being able to track the progress of a given progress is "a hugely immature market," explains Eugene Blaine, Atlantic Global managing director.

Several years ago, Pfizer approached them to provide visibility to their IT portfolio, which Blaine says included things like determining what resources to deliver, the cost and means of benchmarking and monitoring deliveries. Rather than relying on spreadsheets, which he considers "a waste of thousands of man days," they were able to put all of this information in one system-what they call Corporate Vision.

A UK insurance company that used the tool was able to reduce preparation time for its quarterly planning exercise from six weeks to four days and eliminated thousands of spreadsheet pages by allowing participants to view information on the Web, according to Blaine. He adds that the system also helps align the project and resource managers so they "fit into the operational side rather than the operational side guessing what they're doing."

Moving from providing data visibility to your internal enterprise to disseminating data transparently to your supply chain partners involves a whole other set of technology, including data warehouses and data analysis tools. It also requires a means to post the data and information electronically.

To this end, Mesher recommends companies deploy inter-enterprise components to manage visibility across the long supply chain. Descartes, for example, provides a Web-hosted solution for 3PLs to post shipping and data information for their customers. PeopleNet, a Minneapolis, Minnesota-based transportation software vendor, is one of a number of manufacturers developing alerts and dashboards to provide near real-time glimpses of various functions within the shipping process like delivery or pickup.

Lots of that data and information will come to you wirelessly in the years to come. One wireless technology always in the news, of late, is RFID (radio frequency identification) because it has major implications for tracking and tracing goods throughout the transport/logistics trail and even into a major retailer like Wal-Mart.

In terms of RFID, Ferrere suggests thinking beyond "mere implementation to strategic planning. There is a shift from RFID being an additional cost to being a competitive advantage for those who harness and leverage that data," says Ferrere. As more advanced applications appear, he says managers should research new applications to mine the data. Again, that means new systems as companies move from tracing and tracking to using the data strategically.

Lebowitz warns that companies will need global platforms in place to fully reap the benefits of RFID for world trade. In time, the combination of RFID data feed with Event Management and other systems for real-time analysis and data transparency will mean knowing what's taking place in your operation 24/7 and in real time. But those capabilities are just in the making, he adds.

Ways to take charge

As Dave Scott of PeopleSoft observes, more companies are turning technology decisions over to their board of directors rather than allowing the IT department to make costly purchases and costly mistakes. The result is that many of you are taking a harder look at the technology you are buying and insisting that vendors provide value.

As advisable as this approach appears to be, it also puts the onus back on senior executives to be tech savvy enough to communicate with vendors and IT professionals. If the thought of reading technology journals-even easy reading ones-makes you queasy, then there are ways to keep abreast of technology change without actually getting an advanced degree in computer science.

Focusing on technology as a solution to business problems-the area CEOs know best-is a crucial first step to honing in on those technologies that matter most to your business, says Mesher. That way, you can learn what is most important to your operation and put aside technologies with less immediate impact.

Consulting companies like AMR can provide tutorials. "We can help them understand their business strategy and drivers and then sort through vendor offerings," says Aimi. "And, we can offer a spectrum of peer company examples so they see what the leaders in their industries are doing, including the kind of metrics they're able to attain."

Scott, meanwhile, recommends turning to vendor Web sites for customer case studies that offer examples of how given products have worked for companies like yours. "Case studies are key to understanding a customer's business problem. Try to find a customer with a similar problem see how they solved it with a software solution. Most problems aren't distinct. You'll find most companies have shared yours," he says.

No amount of study, however, will replace actual experience. Mesher suggests having a vendor install a product on the condition they take it back if it doesn't provide value. "Start treating software vendors as if they're selling a service, not a commodity, and engage them in making it work. And, if it saves you money, pay them," he says.

Sidebar: The WORLD TRADE Savvy Trader

Sources for logistics & supply chain technology information

• Logistics-related conferences: www.wbresearch.com/LSPUSA/related.asp

• Conference Board (including logistics, supply chain, and more): www.conference-board.org/conferences
  
• Ports, shipping, transport, logistics, supply chain management: www.transportevents.com
  
• Transportation (also lists all conferences by category): www.allconferences.com/Business/Transportation
  
• Europe: The Logistics and Supply Chain Forum: www.logisticsandsupplychainforum.com/conference

Books/Reports/Publications/Learning:

• Managing the Supply Chain: The Definitive Guide for the Business Professional
  by David Simchi-Levi, Philip Kaminsky, and Edith Simchi-Levi (2004)

• The Goal
  by Eli Goldratt (North River Press)
  ARM Outlook 2005 is posted at www.amrresearch.com