the “mainstreaming” of supply chain management · 16 case study: southfield packs in double...

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The “Mainstreaming” of Supply Chain Management: Simpler, More Affordable Integration for Mid-Size Organizations

WINNING STRATEGIES FOR DISTRIBUTION AND MANUFACTURING

Contents

1 Abstract

2 The growing need for supply chain management among small and medium-size businesses

3 Supply Chain Management at the top has defined the need and revealed the problems

4 Removing the obstacles to “mainstream” adoption of Supply Chain Management

8 Microsoft Business Solutions delivers the mainstream Supply Chain Management solution

10 Case study: Herzog meets the changing demands of customers faster and easier

16 Case Study: Southfield packs in double revenue

17 Footnotes

Abstract

For more than a decade, the embrace of supply chain management by major manufacturers and distributors has been driven by cost-cuttingpressures from large customers.

As the customer-driven demand-planning trend moves deeper into the marketplace, small and medium-size manufacturers and distributorsare experiencing a growing need for Supply Chain Management, as well. Those who wait too long to implement Supply Chain Managementface the prospect of being left behind – losing their best customers by failing to comply with stringent requirements for demand planning,inventory management and other supply chain functions. But the cost and complexity of supply chain management solutions create substantialchallenges for small and medium-size players – many of whom are still confused as to what actually constitutes Supply Chain Management.

This paper examines the need for a standardized or “mainstream” model that makes Supply Chain Management more approachable andcost-justified by small and medium-size organizations. Such a model must address the investment end of the ROI equation (cost of ownership),as well as the return (increased margins, lower operating costs, improved AR/AP flows, etc.), but should also take into account the extendedvalue of a integrated Supply Chain Management solution (impact on other enterprise applications, strategic agility, risk reduction, etc.)

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The First Steps to Achieving Inventory Control >> Microsoft Business Solutions 1

The “Mainstreaming” of Supply Chain Management >> Microsoft Business Solutions2

>> I. The growing need for Supply Chain Management among small and medium-size businesses

The proliferation of Supply Chain Management (SCM) solutions among large manufacturers and distributors is a response to thedemand for greater value from large customers. And that customer demand trend is rapidly moving “downmarket,” creating a challenge for small and medium-size manufacturing and distribution organizations.

The primary pain point: customer demand for collaboration

For many Small to Medium Enterprises (SMEs), the operational and financial efficiencies offered by Supply Chain Management arelargely theoretical, especially in the face of industry reports that detail mixed reviews on ROI in larger organizations. For smaller companies,the more immediate value of Supply Chain Management centers on simply keeping customers – customers who are now demandingthat suppliers play a more collaborative role in automating product flow, including:

> Demand planning> Managed inventory> Commitment-to-ship dates> Collaborative forecasting

The penalties for non-compliance can include greater risk of discounts, charge-backs, back orders, lost sales and lost customers.

The challenge

Unlike Fortune 2000 companies who have large budgets and competitive stability, Small to Medium Enterprises can’t afford long andexpensive Supply Chain Management deployments. They are typically restricted by tight cash flow and shallow IT departments, andusually require near-term return on new IT investments. Therefore, an Supply Chain Management solution must:

> Be simple to integrate> Offer a low total cost of ownership (TCO)> Provide accurate information about customer and supplier requirements> Include easy-to-use tools for timely analysis> Include inventory management that works> Provide simple upgrades as needs change

In short, small and medium-size manufacturers and distributors need a “mainstream” Supply Chain Management solution. This solutionmust be one that is simple to deploy and manage, is flexible to accommodate changing requirements, and provides the neededvisibility into customer and supplier enterprises – all at a small fraction of the cost typical of Supply Chain Management solutions in large organizations

Microsoft Business Solutions >> The “Mainstreaming” of Supply Chain Management 3

II. Supply Chain Management at the top has defined the need and revealed the problems

News and analysis concerning Supply Chain Management are focused primarily on the portion of the market where the bulk of thetechnology development has occurred – in large corporations, primarily those manufacturing and distribution organizations with annualsales in excess of $500 million (as evidence of this upper-end focus, many studies actually define the “mid-market” as companieswith sales of $500 million to $1 billion). Even so, the lessons and trends of Supply Chain Management adoption in the top tiers of themarket provide important clues to how Supply Chain Management models must be re-thought for mass deployment in the lower tiers.

As a business strategy, Supply Chain Management has been around since the late 1980s, driven by such mega companies as Wal-Martand GM. With their enormous buying power, such organizations have pursued ever-lower costs by requiring key vendors to shorten thetime required for goods to move through the supply chain. As a result, major manufacturers and distributors have been compelled toassume a lot of new responsibilities on behalf of customers, including demand forecasting and inventory management. Additionally, theymust provide real-time reports and analysis for major customers at one end of their business, as well as for suppliers at the other end.

Supply Chain Management, by its nature, must be highly customized to suit the unique requirements of each organization. Supply ChainManagement investment can vary significantly, based on enterprise environment, business segment, customer base, supplier base, and dozensof other factors. Such variances in integration complexity contribute to Supply Chain Management’s spotty record for ROI. But best-in-classperformance studies indicate that, when deployed efficiently, Supply Chain Management delivers a powerful advantage. To cite just one study1 :

> % of on-time delivery of orders: up 14%> Inventory (months): reduced by 60%> Cash-to-cash cycle: reduced by 62%> Net asset turns: up by 280%> Total Supply Chain Management cost (% of revenue): reduced by 75% to 80%

Critical mass, and big budgets

In pursuit of these advantages, the majority of upper-tier organizations (companies with annual revenues of $500 million or more) havecommitted to Supply Chain Management, as noted in a recent survey by Forrester Research, Inc.2 Just as important, the same surveyreveals that the budget for an Supply Chain Management project among these organizations averaged between $4.6 million and $7.6million. The high price tag is a function of the complexity of these deployments and is a red flag to many smaller organizations deliberatingover the viability of Supply Chain Management in their more modest business environments.

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III. Removing the obstacles to “mainstream” adoption of Supply Chain Management

Encountering speed bumps “downmarket”

Of the trillions of dollars in goods and services exchanged each year, only a small fraction is managed via integrated Supply ChainManagement processes. This reflects the fact that, despite the strong upper-tier penetration, vast numbers of companies in the lowertiers have yet to adopt Supply Chain Management processes.

Industry analysts recognize the Small to Medium Enterprise market is still a vast frontier where Supply Chain Management is concerned,and generally agree that cost and complexity are the main inhibitors of adoption. Gartner contends that even though external collaborationwill be the biggest demand faced by Small to Medium Enterprises beyond 2004, only 30% will meet the challenge.3

In a fast-moving connected economy, such a meager rate of progress is unacceptable and, fortunately, can be corrected.

Clearly, customer demand for collaboration is increasing, and requires that smaller organizations provide Supply Chain Management solutions or riskbeing left behind.And while it is largely accepted that Supply Chain Management offers the potential to reduce the costs and uncertainties of business,it is essential to reduce the costs and uncertainties of Supply Chain Management itself – so that smaller organizations can reap the benefits.

First, a streamlined, easy-to-understand view of Supply Chain Management

For the small or medium-size company doing its due diligence, Supply Chain Management can look intimidating in its complexity –often depicted with intricate diagrams with sub-components and functions that have little relevance to many organizations. To makeSupply Chain Management manageable for smaller firms, a solution set should have power and functionality compressed into a relative few primary processes. Basically, supply chain management is the combination of art and science that goes into improving the way acompany finds the raw components it needs to make a product or service, manufactures that product or service and delivers it tocustomers. The following are the basic components for supply chain management.4

1. Plan: This is the strategic portion of supply chain management. You need a strategy for managing all the resources that go toward meeting customer demand for your product or service. A big piece of planning is developing a set of metrics to monitor the supply chain so that it is efficient, costs less and delivers high quality and value to customers.

2. Source: Choose the suppliers that will deliver the goods and services needed to create a product or service. Develop a set of pricing, delivery and payment processes with suppliers and create metrics for monitoring and improving the relationships. And put together processes for managing the inventory of goods and services received from suppliers, including receiving shipments, verifying them, transferring them to manufacturing facilities and authorizing supplier payments.

3. Make: This is the manufacturing step. Schedule the activities necessary for production, testing, packaging and preparation for delivery. As the most metric-intensive portion of the supply chain, measure quality levels, production output and worker productivity.

4. Deliver: This is the part that insiders refer to as “logistics.” Coordinate the receipt of orders from customers, develop a network of warehouses, pick carriers to get products to customers and set up an invoicing system to receive payments.

5. Return: The problem part of the supply chain. Create a network for receiving defective and excess products back from customers and supporting customers who have problems with delivered products.

These “foundation” processes, as depicted below, provide a company a range of visibility that extends from its supplier’s supplier to itscustomer’s customer (see Diagram 1):

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Rethinking ROI and performance – so Supply Chain Management makes business sense for smaller companies

As shown in the diagram5 below, once primary Supply Chain Management processes are properly customized and integrated, theprevailing assumptions dictate that ROI will ensue – due to positive impact on both net income and invested capital.

ERM> Human resources management <

> Finances management <> Asset management <

*VALUE-ADDED INTERMEDIARY FACILITATING SUPPLIER INTERACTION, E.G. FORMAT TRANSLATION SERVICE, SUPPLIER AGGREGATION, PUBLICEXCHANGE, PRIVATE NETWORK, PEER-TO-PEER INFRASTRUCTURE

SOURCE> Direct procurement> Indirect procurement

MAKE> Manufacturing/ Production> Scheduling> Execution> Management

COLLABORATEExecution: Supply-chain visibility > Plan: Collaborative planning and forecasting

SUPP

LIER

S

DELIVER (TO CUSTOMERS) &

> Materials mgt. - Sales order mgmt - Purchase order mgmt - Inventory mgmt > Logistics mgt. - Warehouse mgmt - Transportation mgmt> Returns mgmt.

SELL (TO FINAL CUSTOMERS)

> Direct Ops (B2C, Catalog)> Store Ops - Core POS> Merchandizing

EXECUTE OPERATIONS

PLAN OPERATIONSDemand planning and forecasting, Mfg planning, Inventory planning, Transportation planning

CRM> Marketing <

> Salesforce automation <> Customer support <

HUB*

HUB*

SUPP

LIER

S

Diagram 1: From My Supplier’s Supplier to my Customer’s Customer

NETINCOME

GROSS MARGIN> LOWER MARKDOWNS <

> IMPROVED AVAILABILITY <> REDUCED COGS <

> LOWER INTEREST EXPENSES <> MORE EFFICIENT PROMOTIONS <

> FASTER INVENTORY TURNS <> ADVANTAGED AR/AP FLOWS <

> OPTIMIZED NETWORK <> ASSET UTILIZATION <

SG&A

WORKING CAPITAL

ASSETS

RETURNON INVESTED

CAPITAL

INVESTEDCAPITAL

Diagram 2



While these assumptions are valid, there little in the way of standard guidelines that tell small and medium enterprises how to best getall the pieces in place to reach this benefit stage. Plus, Small to Medium Enterprises need insight into what variables contribute to thescale of the investment (cost), as well as the performance issues that can positively impact income. Such details can reveal importantcontrol points and provide Small to Medium Enterprises greater confidence in approaching Supply Chain Management.

The revised diagram below includes those essential “mainstreaming” factors that can make Supply Chain Management simpler, lessexpensive and more productive for smaller organizations:

Lower total cost of ownership (TCO)

Lower license fees: License fees are the most visible cost obstacles for many Small to Medium Enterprises. A streamlined “mainstream”Supply Chain Management suite allows for much lower license fees, because it establishes a level of standardization, while stillproviding the foundation for highly tailored solutions.

Simpler integration: An Small to Medium Enterprise-friendly solution should provide an open, scalable architecture to make integrationeasier, less experimental and less expensive.

Easier training and use: Common code sets and built-in functional compatibility with other business applications – as well as simple,intuitive user interfaces – keep training and user support requirements to a minimum.

Faster time to benefit: With simpler integration and ease of use, an Supply Chain Management solution can be up and running faster,to meet urgent customer demand and accelerate ROI.

Broad channel support: A broad expert channel assures that the integration talent pool is large enough to assure ready support, and itintroduces healthy competitive pressures. This results in real choices for organizations of all sizes, as well as lower, more predictable integration costs.

IMPROVED FUNCTIONALITY & PERFORMANCE EXTENDED ENTERPRISE VALUE

NETINCOME

> Lower license fees

> Broad distribution (channel)

> More predictable installation costs

> Competitive service and support options (channel) etc...

> Faster time to market = faster time to benefit

> Familiar operating environment for easier training and use

> Easier propagation to customers and suppliers > Standardized environment for ISV enhancement

> Easier customization across diverse inventories

> Seamless visibility contributes to effectiveness of CRM and other key applications > Scalability enables rapid growth

> Greater adaptability improves strategic agility: to meet competitive challenges, or move into new markets, etc...

LOWER COST OF ENTRY

GROSS MARGIN> LOWER MARKDOWNS <

> IMPROVED AVAILABILITY <> REDUCED COGS <

> LOWER INTEREST EXPENSES <> MORE EFFICIENT PROMOTIONS <

> FASTER INVENTORY TURNS <> ADVANTAGED AR/AP FLOWS <

> OPTIMIZED NETWORK <> ASSET UTILIZATION <

SG&A

WORKING CAPITAL

ASSETS

RETURNON INVESTED

CAPITAL

INVESTEDCAPITAL

VALUE

VALUE

VALUE

VALUE

Diagram 3


Improved performance and functionality

Internet foundation: An Internet backbone allows a flexible network infrastructure for Supply Chain Management, plus it leveragesemerging industry standards for messaging and security.

Easier propagation to customers and suppliers: The attributes that contribute to easy internal integration and user-friendliness alsoenable faster, more seamless expansion of Supply Chain Management functions to new customers and suppliers.

Easier customization/market segmentation: Open architecture and strong support from vertically specialized integrators providesimpler and more precise market segmentation, which, in turn, leads to more effective customer service.

An environment for functional enhancement: A standardized Supply Chain Management environment spawns development tools andencourages the development of additional, best-of-breed functionality from third-party vendors – giving users a greater opportunity toprovide added value to customers.

Extended enterprise value

Stronger customer relationships: Successful collaboration through Supply Chain Management processes secures customer (andsupplier) relationships that are more stable, and more valuable.

Integration with other business applications: Within an integrated framework, important data used in Supply Chain Managementprocesses can be shared and leveraged among other business applications, including CRM, financials and HR – further enhancing thevalue and effectiveness of the overall enterprise.

Strategic market agility: The integrated, open-systems approach allows for the development of unique services for market differentiation,and enables faster and easier adaptability to changing market environments.

Enhanced company value: Lower cost of operations, improved profitability, and greater market staying power all add up to increasedfinancial stability and greater shareholder value.


V. Microsoft Business Solutions delivers the mainstream Supply Chain Management solution

The above-described ideal Supply Chain Management approach is a vision pursued and achieved by Microsoft Business Solutions.Microsoft Business Solutions now offers a broad array of robust and integrated Supply Chain Management solutions – all designed forsmall and medium-size firms, and all highly customizable to the needs of distinct market segments.

The extended operating environment

Both Supply Chain Management suites draw on market-proven applications that cover every major Supply Chain Management process,from demand planning, to inventory management, to purchase order management. In addition, they link seamlessly to other vitalbusiness applications from Microsoft Business Solutions, such as financials, CRM and Human Resources.

These applications that have been finely integrated within the Microsoft operating environment, and work with other Microsoft businessapplications, including Microsoft Office and Outlook, as well as with Microsoft .NET.

This places Supply Chain Management processes within a proven environment that leverages information across the enterprise and isalready familiar to users in organizations at all points in the supply chain.

Establishing the standard for affordability

The use of proven applications in an established integrated operating environment reduces license and deployment costs to a fractionof what has been typical in large Supply Chain Management projects – and puts the benefits of Supply Chain Management within thereach of even relatively small organizations. And to further clear away cost obstacles, Microsoft Business Solutions even providesfinancing of complete solutions, through the Microsoft Capital program.

An army of experts at the ready

An important and unique feature of the Microsoft Business Solutions approach is a large and well-established expert channel – over 4,500 partnersworldwide, with deep technical and business experience that covers virtually every market segment imaginable. This vast resource makes top-gradeSupply Chain Management consulting, integration and support available and affordable for companies of all sizes, in all geographic markets.

The Microsoft Business Solutions commitment

The effectiveness of these applications has been proven by thousands of distributors and manufacturers around the world. With morethan 40 years of combined experience and over 250,000 customers, Microsoft Business Solutions is known worldwide for deliveringquality, easy to use, and high value business applications and services. Our goal is to empower companies to:

> Make smarter, faster business decisions > Improve employee and business productivity > Gain a competitive advantage

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Microsoft Business Solutions for Manufacturing connect easily with the Microsoft platform –a highly versatile environment that scales to meet nearly any business software protocol. From

Windows applications to specific industry programs, Microsoft integrates seamlessly with yourexisting and future enterprise systems, providing solid and reliable performance.


Microsoft Business Solutions for Distribution connect easily with the Microsoft platform – a highly versatile environment that scales to meet nearly any business software protocol. From

Windows applications to specific industry programs, Microsoft integrates seamlessly with yourexisting and future enterprise systems, providing solid and reliable performance.

Diagram 4: Microsoft Business Solutions for Distribution

Diagram 5: Microsoft Business Solutions for Manufacturing

V. Case study: Herzog meets the changing demands of customers faster and easier

Herzog GmbH, a small just-in-time manufacturer of precision machine parts and driving gear based in Germany, illustrates how SupplyChain Management solutions from Microsoft Business Solutions can improve supply chain efficiency and secure customer loyalty:

Herzog serves such top-name customers as Bosch, Siemens and Black & Decker. “Customers come to us because they know that wecan meet their demands at short notice. We can help with design, and we can deliver one item or a million items,” says Herzon ITmanager, Joachim Baum.

Being able to meet any customer demand at short notice has certain consequences for the way Herzog operates. Raw materials need to arrive on time and production must be swift. All machinery and expertise is located in one facility to streamline operations. Andcontingency plans are in place: the company has 30 suppliers on stand-by – at least two or three per process – in case it needs tooutsource when customer demand exceeds in-house capacity.

The need for speed and accuracy

With greater customer demands for flexibility and on-time delivery, the company knew in 1998 that its existing Unix based system wasnot capable of taking the company forward. Baum clarifies.

“It couldn’t give us the overview we needed over materials, work in progress, production processes, delivery and stocks. It wasn’t flexibleenough to cope with short-term changes in demand or capacity, and it was expensive and time-consuming to adapt to newrequirements, like adding functionality or designing new reports.”

Baum looked at 10 potential new systems, but either they didn’t fulfill the needs of Herzog, or they were just too heavy, inflexible andexpensive. “By contrast, Microsoft Business Solutions is slim and agile, quick to implement, easy to learn, extremely flexible and cheapto customize. It was the most modern and professional solution for our needs, and still is.”

Live within three months

Installation, customizations, transferring of data and training were completed in just three months.

“Our old system looked very different, but the workers picked up the new one with two full days of training. On January 1, 1999, we turnedon our new system and turned off our old system. The changeover went well. Sure, the first three weeks we were busy with support, butsince then it’s been fine.

“And it’s very easy to customize. We can make new reports, alter user permissions and change or collate forms easily in-house.Most new functionality can be made within half a day or a full day. With the old Unix system it took two to eight weeks!”

Just-in-time collaboration with partners

In general, the plans that Herzog receives from its customers are quite variable. A typical plan might ask for 100,000 parts over sixmonths, delivered weekly in batches of anywhere from 2,000 to 8,000.

Herzog’s customers send their long-term order plans by post, e-mail or fax. One uses an e-marketplace. Another prefers to send andreceive all order documentation electronically via an Electronic Data Interchange (EDI) solution. Herzog can handle it all with MicrosoftBusiness Solutions and quickly share the information with suppliers.

“We send our yearly production plan to our key raw materials suppliers by e-mail directly from within the program. That’s something wecould never do in our old system. Our Microsoft Business Solutions system is also much more flexible in that we can just send each

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supplier exactly the part of the production plan that is relevant to them. They can see straight away what we’re asking for, a year ahead,buy in bulk and get better prices.

When it comes to making a firm order – most often the day before they need the materials – Herzog can see which supplier will be ableto make the delivery requirements. They simply make the choice in the system and e-mail them again.

Deliveries are checked as they come off the trucks and the parts, once accepted, can go straight into production.

Better information at hand reduces waste

As each order makes its way through the various production processes, it is accompanied by a printed production plan that includesbar codes.

“By scanning these bar codes with a pen, the worker can see all the information he needs. He can see the product drawing, all the qualitycontrol material – which might draw his attention to the diameter of the part – and so on. He knows what processes have happened beforeand what’s coming next. This has given us a 2% increase in quality – equivalent to 900,000 Euros ($945,000 USD) this year.”

Supply Chain Visibility enables rapid adaptability to change

If the worker finds out when he starts the job that he can’t get it done in the allotted time – or maybe he can do more in the allottedtime – then he can just change the figure on the screen.

“If the change means that we can’t meet the agreed delivery time then the program indicates spare capacity – including outsourcedcapacity – and the process manager chooses which resource will do the job.”

“With the old system, it was nearly impossible to keep up with all the changes. But now we’re on top of it, with great visibility into allour processes. The system tells us when we’re working behind schedule and when we’re ahead of schedule. When we’re behind, we can make the necessary changes to meet the delivery requirements. When we’re ahead, we can bring production of other jobs forward.We don’t need to have machines and people idle. We’ve been able to increase productivity by 15-20% and cut lead times by around2.5-5%. And our customer relationships are better because we can meet a lot of their wishes that we couldn’t before.”

Happy customers

At the end of a job, the worker enters the number of items he’s made into Microsoft Business Solutions. Once the items have beenchecked for quality, this can also be entered into the system. “This allows us to document our processes. We can demonstrate tocustomers how we assure quality at each and every stage. It gives them confidence in us.”

Most finished items shipped out within half a day. Herzog delivers either direct to the customer’s premises or to a consignmentwarehouse located near the customer. The customer draws on this stock only when it needs to, sending the details of the withdrawal ina credit note, which is used to update inventory in the system and generate an invoice.

“The system tells us what we have in-house, on consignment, on credit, delivered, invoiced, paid, unpaid, everything,” exclaims Baum.“Everything is traceable.”


VI. Case Study: Southfield packs in double revenue

Southfield Packaging packs and distributes promotional materials for many of the USA’s leading hair care, cosmetics, and health and beauty manufacturers. With Microsoft Business Solutions, the company was able to seamlessly link Supply Chain Managementfunctions with financial management systems – and increase revenue without adding administrative staff.

Southfield’s inventory management system program was not linked to the company’s financials, which made it difficult to obtain even a general overview of business performance. Billing and purchase order processing were completely separate, further adding to thesystems’ disconnect.

A neat package

Working closely with a Microsoft Business Solutions partner, Southfield began developing custom applications and processes to integratethe financial, manufacturing and inventory systems. Once complete, they turned their attention to production, order processing, customerrecords, purchase orders and banking.

The training went smoothly, especially for those with experience in a Microsoft Windows operating system environment.

“The user interface was simply one of the best that we saw when looking around,” says Mark V. Melfi, III, Southfield’s executive vice president.“It gave us the information we needed to do our jobs without bogging us down with extra ‘junk.’ It drew us in and was a major reason that wewere able to get up and running on the system so quickly. That same familiarity carries across all of the Microsoft Business Solutions modules.”

Unwrapping the benefits

Microsoft Business Solutions’s capabilities yielded far more benefits than Southfield anticipated. For the first time, Southfield was able tomonitor each job individually at each step and provide updates to its clients quickly and easily. In addition, with all of the different processestied into one unified system, the company has been able to cut the costs associated with fulfillment and purchase orders in half. Southfieldhas doubled in revenue since installing Microsoft Business Solutions almost six years ago – without hiring any additional administrative staff.

The tight integration between Microsoft Business Solutions and the company’s other systems also enables Southfield to capture and analyzeinformation at a much more detailed level. In fact, the company has reduced its estimate-to-cost differential to less than 2 percent. Southfield’ssolutions partner has since customized a report screen that shows all of the programs currently in production, the cost-to-date per unit, anda project profit-and-loss analysis in real-time – all of which translates into better business decisions for both Southfield and its customers.“Customer service has been a hallmark of Southfield since our inception. To us, it is common business sense,” explains Melfi. “The more timely,the more accurately and the more easily we can provide our clients with information on the status of their projects, the more valuable we are tothem. Microsoft Business Solutions has made that business practice exponentially easier for us to accomplish.

Bundling more services

Since the initial installation, Southfield has further enhanced its services by integrating the “anytime, anywhere” capabilities of theInternet with Microsoft Business Solutions. Clients can now check the status of their programs from any computer 24 hours a day,further solidifying the company’s excellent reputation in customer service.

“Logistics dictate that we handle a lot of inventory that doesn’t belong to us,” said Melfi. “Still, the materials going through our productioncenter have a definite impact on our customers, and we need to be able to provide real-time information to them when it is neededwithout losing sight of the fact that we, too, are a business.. By using Microsoft Business Solutions, we are now able to link our productionand inventory information with our financial data, providing a real-time picture of our operation with just a few clicks of the mouse.”


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VII. Footnotes

1 Perspectives on Supply Chain Management, McKinsey & Company (citing The Performance Management Group), July 18, 2002

2 Midmarket Opportunities For Supply Chain Management Vendors, Forrester Research, November 15, 2002

3 SMB Leaders to Focus on Collaboration and Interoperability, Bob Anderson/Joe Outlaw – The Gartner Group, December 6, 2002

4 The ABCs of Supply Chain Management, Christopher Koch – The Supply Chain Management Research Center, CIO.com, January 22, 2002

5 Perspectives on Supply Chain Management, McKinsey & Company, July 18, 2002

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© 2003 Microsoft Corporation. All rights reserved. Microsoft and Microsoft Business Solutions are either registered trademarks ortrademarks of Microsoft Corporation or Microsoft Business Solutions ApS or their affiliates in the United States and/or other countries.

WINNING STRATEGIES FOR DISTRIBUTION

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