@RJ: excellent point! Part of the story I didn't get to, but will write about in a follow-up, is the other parts of the supply chain this system can open up. For example, the financial side. If a company stops shipment for non-payment, the GT Nexus system can provide that information, assuming someone knows to go looking for it. There are so many things going on behind the scenes of any supply chain that can muck up the works, it's pretty mind-boggling.
Manufacturer supply chain issues. Companies want the SEC to take into account the realities of today's global supply chains. The intent is to have manufacturers trace the metal in their products to the mines from which it was sourced. The problem is that most companies currently only have direct contact with a first tier supplier or a company immediately upstream from themselves. Components are typically sourced from multiple countries and manufacturers.
Companies want the SEC to take into account the lack of transparency in the electronics supply chain and the challenges faced by manufacturers in tracing conflict minerals.
The cloud doesn't replace those systems, but it does provide economies of scale. GT Nexus users pay a subscription fee based on their level of engagement. This means small companies that don't have costly ERP platforms can participate in GT Nexus.
Partners are being driven to the platform by large, global OEMs and brand owners that source from hundreds of suppliers.
Kefer points out that most freight -- whether shipped via sea, land, or air -- is managed by a finite set of companies. Participation by these companies is half the battle in supply chain visibility. "Let's say 95 percent of container traffic is managed by 30 companies. If we can get these 30 companies on the [GT Nexus] network, hundreds of companies can access the information that's important to them."
Could be rolled out in lots of other areas as well where companies want to demonstrate their ethical sourcing. Think GT Nexus could be onto a real winner if there is not a similar competing product.
correct Barbara, more visibility will also mean a better customer service. A customer need not to call to the company's toll free number to know about the current status. Also, if the shipment is delayed then it will be easier to track. The only problem with the facebook like system is that once you are invited to share the data then anyone and everyone can check the status. I am sure that something must have been done to avoid it.
@Himan: The idea is similar to the tracking systems that UPS, FedEx and other carriers provide for their customers. The problem with these systems is that they are "closed:" they only track within the UPS or FedEx system itself. Now, let's say Foxconn uses a system to let people know a PC order is done; the ship out of China alerts partners the PCs have been loaded; the Port of Oakland lets partners know the ship has arrived; Customs says the shipment got the green light to unload; and Bob's trucking company says the PCs are en route to Best Buy Chicago. This is an "open" system that provides a lot more insight into the flow of prducts.
the idea in itself is pretty niche. Customer may want to know at every point of time about the status of their shipment. The greater advantage though could be the visibility of companies that usually do not have enough visibility in the supply chain. Customers will know who and why is someone involved. So, good and fast work will be appreciated and with increased business.
Dave, The reason "visibility" into demand, supply and pricing is so difficult is because for many companies having a cloud cover on these issues is part of their competitive differentiation. They want to keep competitors, even suppliers and business partners, guessing. This, of course, may be bad for the entire industry, but if you can hide information long enough to gain market share, increase sales and boost profitability, then you'll do it. This is the way many businesses operate.
@Dave: I am constantly amazed at how difficult it is to actually achieve visibility! The ERP and MRP systems currently available are great systems, but were not meant for the kind of collaboration GT Nexus envisions. It is true that the supply chain is something that evolves, and technology has to keep up.
I can also see a reluctance to simply scrap a legacy system, so a soltuion you can use in conjuction with a legacy makes sense.
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EBN Dialogue enables you to participate in live chats with notable leaders and luminaries. Open to the entire EBN community of electronics supply chain experts, these conversations see ideas shared, comments made, and questions asked and answered in real time. Listed below are upcoming and archived chats. Stay tuned and join in!