My favorite part of Lora Cecere’s recent post was her third key concept to building a demand-driven supply chain, “B2B is not B2C”. I’ve already discussed her first two concepts in Part 1: Why Traditional Collaboration is Dead, and Part 2: Recipe for Supply Chain Success. Her next concept is worth quoting at length:
Today, B2B relationships in the extended supply chain are based on passing EDI messages or portals. EDI is like passing messages in closed envelopes. It is slow and expensive. Enterprise portals are like a bad party game where no one wins….Data volumes grew 18X in 2011. We are entering an era of machine-to-machine (M2M) messaging that will transform B2B relationships…It will not be as easy as stuffing new signals into last decade’s Enterprise Resource Planning (ERP), Manufacturing Execution Systems (MES) or Warehouse Management Systems (WMS). ..These systems will become legacy applications. Enterprise systems will have to be redesigned for new forms of B2B and M2M connectivity. The Cloud is an enabler…
I completely agree. We’ve taken EDI and conventionally architected enterprise systems as far as they can go, and the result is a confusing mess of standalone systems that are slow to react and do little to reduce overall risk. (If you haven’t already, take my coordination quiz to see just how bad it is out there).
But do any viable alternatives to EDI really exist today? Yes, absolutely. We have the technology today to turn a supply chain into a multiparty network that can take forward demand and translate this back to the rest of the supply chain’s local ERP systems in real time. The type of information being shared is far more useful than EDI, is more free-flowing, and doesn’t require laboriously building connections between trading partners. It’s called a many-to-many network.
What do you think? Are we near the end of EDI? I’d love to hear your thoughts on LinkedIn or Twitter…
Latest posts by Greg Brady (see all)
- Why a Network Model Makes Sense for Automotive Suppliers - July 30, 2019
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