1. Workshop on Information Society Technologies Applied to Transport and Tourism Brussels, 23 rd May 2000 Web Infrastructures for Logistic Networks The FLUENT Project Paolo Paganelli Gruppo Formula S.p.A., Italy

2. 2 P.Paganelli, Gruppo Formula Objective To design, implement and experiment a new IT solution for managing materials flows, occurring in a logistic network with multiple plants and co-operating firms. Objective FLUENT: Flow-oriented Logistics Upgrade for Enterprise NeTworks n Esprit IiM Project 29088 n 9 months from completion n Focus on logistics vs. manufacturing n Network approach Distributed sites Distributed sites Multi enterprise Multi enterprise Heterogeneous information systems Heterogeneous information systems

3. 3 P.Paganelli, Gruppo Formula Two definitions for Supply Chain Supply Chain Management is about managing the flow of products and services and the associated information, across the whole business system to maximise value to the end consumer. Price Waterhouse (‘98) Supply Chain Management is about managing the flow of products and services and the associated information, across the whole business system to maximise value to the end consumer. Price Waterhouse (‘98) For a start, the supply “chain” is really not a chain at all - it is a complicated web of relationships between demand and supply. The concurrent and multidimensional nature of these relationships creates a complex fabric woven step by step. Gartner Group (‘98) Linear supply chain (source: SCP vendor) Interenterprise visibility (source: Gartner Group) Enterprise

4. 4 P.Paganelli, Gruppo Formula FLUENT vision n Network visibility “.. the ability to see processes, events and data throughout the trading partner community.” n Across enterprise boundaries n Network velocity “.. the speed at which products, processes and data move through the supply chain.” n Network variability “.. the ability to manage the unique combinations of SCM processes and control the infinite permutations of events and processes as they occur throughout the supply chain.” “ Creating a revenue-enhancing SCM strategy requires enterprises to work toward the primary definition of collaboration, where enterprises act together for mutual benefit.”

5. 5 P.Paganelli, Gruppo Formula FLUENT vision n Real-time collaboration “Throughout the supply chain, closer collaboration is replacing arm’s length transactions..” "Just as Esperanto has failed to become the universal language, we believe universal data semantics and process models for business will remain a fantasy.." n Integrate but not overlap with ERP “(a SCM producer) larger challenge continues to be its lack of a clearly differentiated message vs. Enterprise Resource Planning vendors targeting the SCP market.” n Connect nodes, not assimilate them

6. 6 P.Paganelli, Gruppo Formula SCM today: evolving goals “Agile” SCM = SCP + SCE

7. 7 P.Paganelli, Gruppo Formula SCM today: Largely incomplete functional coverage SCP / APS: i2, Manugistics, Adexa,.. ERP world-class: SAP (APO), JDE (Numetrix),.. FLUENT

8. 8 P.Paganelli, Gruppo Formula

9. 9 SCP vs. SCE

10. 10 P.Paganelli, Gruppo Formula Supply Chain Inventory Visibility: An unfulfilled promise

11. 11 P.Paganelli, Gruppo Formula E-commerce impact on business: SCM is not an option Real-time intranet/extranet communications

12. 12 P.Paganelli, Gruppo Formula FLUENT functions Non-ERP Logistic execution Local ERP SCM data Node Planning & Execution Supply Chain Planning Forecasting & Performance Measurement Network Supply Chain Visibility & Execution ERP Interface ŸData interchange across heterogeneous systems ŸBased on the XML standard ŸScriptable transformation logic Network Execution  Demand evasion cycle  Alert system for exceptions notification  Workflow-based Network Visibility  Real-time access to different nodes data  Data normalisation and conversion across nodes (codes, units,..)  Clear data ownership and visibility rules Network Modelling ŸConfigurable links (push/pull, visibility, ordering rules,..) ŸDifferent viewpoints on the net (by node, product, channel, …) SCM = An integrated environment for sharing data, communicating events and taking decisions in a network of independent logistics units SCM Processes Planning Supply Chain Links Forecast XML

13. 13 P.Paganelli, Gruppo Formula Legacy Logistics Local ERP SCM data Network XML Supply Chain Links SCM Processes Planning Forecast FLUENT Extranet Manufacturing Cooperation  On-line delivery plan management  Order change/release cycle  Notification of order status/exceptions Co-Managed Inventory  Visibility of planned and actual demand at any node  Allocation of planned production  Replenishment cycle Virtual Stock Management  Warehouses/distributors network  Collection of customers demand  Consolidation and corss-docking Application scenarios

14. 14 P.Paganelli, Gruppo Formula Example: Co-managed Inventory Visibility Visibility, Executio n Visibility, Execution Visibility, Execution Planning Manufacturer or distributor ERP1 Wholesaler Subsidiary Custom. ERP3 ERP2 Demand Production, Inventory, Movements Stock levels, Custom. orders Availability, Order status, Shipments Orders Availability, Shipments status

15. 15 P.Paganelli, Gruppo Formula Example: Co-managed Inventory Visibility, Executio n Manufacturer or distributor Wholesaler Subsidiary Custom. Verify availability Publish order status Publish Demand

16. 16 P.Paganelli, Gruppo Formula Visibility, Executio n Manufacturer or distributor Wholesaler Subsidiary Custom. Advantages On-line access to SCM data From every point of the network According to existing links and rights Aggregated on more nodes In the viewing node format or in the original format Inter-company processes Notification of demand Orders negotiation Alerts in the execution phase Workflow automation Decentralised system Each node is responsible for (pays for) its own data Preservation of existing local standards (product codes, units, currency,..) Interface to existing systems Different ERPs (Formula,SAP,Baan..) Legacy systems and other tools Transport-independent (XML) Calling conventions independent Scriptable conversion logic

17. Thank you for your attention