I can see clearly now…the constraints are gone.

To many, the quest for Supply Chain Visibility has been the Holy Grail for efficient and effective supply chain management for the past 40 years. Elusive as end to end supply chain visibility has been, we may be sipping from the chalice sooner than later. But, “you have to choose wisely.” As supply chain control tower solutions mature beyond the hype and into reality, “multi-enterprise supply chain business platforms (MESCBP)” as Gartner refers to them, will leverage the convergence of digital technologies to offer “the next big thing” in the evolution of technology promised by Business 4.0.

Back to the future
This is back to the future for me. Back in the early 90's, when I was at Digital Equipment Corporation, I worked on a project called the Global Logistics Venture, powered by DEC “VAXClusters.” GLV was a joint venture of CSX and AMR Corporation (American Airlines, not AMR Research), to create a global PC Client-oriented freight tracking system (multi-enterprise platform) called Encompass. Our vision was to extend it to a commercial freight transportation reservation system similar to AMR’s SABRE passenger transportation reservation system. Think of a shipper saying, “Hello Encompass, book me the next 800 pound pallet position available to depart Boston, MA on 28 May 2019 for arrival in Austin, TX on 5 June 2019 between 1:00pm CST and 3:00pm CST.” Encompass would calculate the optimal modes, routing, and carrier(s) to meet the shipper's requirements. The skeptics were correct; the concept was ahead of the technology.

Visibility unchained
Today, most of the technology constraints have been removed, solutions such as, E2Open, One Network Enterprises, Infor Nexus, SupplyOn and others are emerging as mature MESCBPs that started as EDI transaction management platforms or industry marketplaces that have the enterprise subscriber scale to manage market ecosystem visibility, optimization and synchronization.

Since I don't have another 40 years to realize the Encompass Vision, I'd like to propose some nomenclature changes that I hope will speed adoption. Market ecosystems platforms are dependent upon scaled subscriptions by common interest connected communities of commerce. The ecosystem management platform collects, aggregates, consolidates and federates data to facilitate global commerce including competitors.

The platform leaders are already executing this requirement. Instead of calling them MESCBPs, what if we call them “Ecosystem Commerce Platforms (ECP).” Business 4.0, in general, is dependent on connectivity. ECPs provide instant connectivity. I don’t see just one standardized cross industry ECP, rather I think we will see ECPs deployed based on current industry community adoption and will compete and consolidate over time similar to the evolution and consolidation of the current ERP market.

Maturing control towers
Speaking of ERP, let's explore the evolution of ERP and the analogy of “airport control towers” to the supply chain strategies and capabilities of the emerging ECP market leaders.

Companies are realizing that their supply chain is not really a chain at all. Rather, it's is a supply network and a complex one at that. To address this complexity, companies are implementing control towers to enable their enterprise supply network (ESN) with connectivity to trading partners for visibility, and to optimize the flow of goods (inbound and outbound loads) within their ESN. However, as control towers are implemented, visibility to the flow of goods reveals that the ESN is simply a node in an “Ecosystem Supply Network of Networks (ESNoN)” community that is comprised of all of the participants in the market ecosystem including not only trading partners, but suppliers', customers', competitors', and their suppliers', customers' and competitors' ESNs as well. (And, not to mention, including all of the support enterprise networks as well).

Just as each airport has a control tower to manage and control inbound and outbound flight traffic, enterprise supply networks have a control tower to manage and control inbound and outbound loads of enterprise goods traffic. The emerging issue is that while these control towers have visibility and control over their loads, they don't have visibility to all of the loads in the market ecosystem in which they operate. ESN complexity results not just from the enterprise flow of goods, but also to the flow of goods from competitors', suppliers' and customers' ESNs that must adapt to changing demand, resource constraints, bottlenecks to flow, capacity utilization/availability and the plethora of variability, tradeoffs and uncertainty that has plagued ESN operations for years.

One more acronym!
The solution lies in what I will call ERP4.0, or Ecosystem Resource Planning. The first breakthrough wave was Material Requirements Planning (MRP), followed by the second wave, Manufacturing Resource Planning (MRPII) and the third wave, coined by former Gartner analyst Erik Keller, Enterprise Resource Planning (ERP). Whether you call our current fourth wave the Connected Age, as I did in my book, or Industry 4.0 or Business 4.0, the underlying enabling technology that will lead ESN maturity will be an ecosystem planning and optimization application suite, ERP4.0 that will be enabled, managed and deployed by ECPs.

Ecosystem optimization and synchronization
Individual airport control towers (ESNs) take their orders from the Air Traffic Control (ATC) system that is not a control tower; rather an ECP is a network of control tower networks with visibility to all of the flight traffic in its airspace (ecosystem). ECPs are connecting communities of commerce in market ecosystems. They are leveraging Business 4.0 digital technologies such as cloud computing, mobility, the IoT, AI/BI and location services to optimize business processes across the market ecosystem.

The leading ECP providers are developing and acquiring operations applications. For example, E2open has acquired Terra Technology, Steelwedge and Amber Road. They emerging into ERP4.0 suites, or ERP4.0, that will enable ESNs to connect to an ecosystem platform that enables the optimization and synchronization of ecosystem flows of goods to lower the cost and complexity of integrating enterprise flows of goods within an ecosystem's multi-enterprise traffic flow of goods.

Will the Vision Become Reality?
ECPs encompass entire market ecosystems and enable efficient and effective supply network management for the benefit of all of the participants. The Japanese used to say, “Know when to cooperate and know when to compete.” We are not really competing while goods are in transit. For the better part of my career, I've said that the perfect logistics system is beaming product to the consumer just as the consumer wants it. We can't beam product yet; but, we can beam information at near zero latency speeds. As ECPs and ERP4.0 mature, realizing zero latency and optimal efficiency within market ecosystems' flow of goods may transform the Vision into Reality.

Let’s do it! I can't wait anymore.

By: Richard J. Sherman is a senior fellow in the Supply Chain Centre of Excellence at Tata Consultancy Services. He can be reached at [email protected].

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