E-Commentary -- Tightening Up The Supply Chain

It's 10 o'clock on Sunday night -- do you know where your raw materials, parts, components and sub-assemblies are? That shipment of motors from Taiwan? The load of automotive frame parts bound for the Port of Oakland that you'll need a week from Thursday on a just-in-time basis? How about those disk drives and capacitors your materials chief ordered from a new supplier in China for your finished-goods assembly plant? Chances are, if yours are among the billions of dollars worth of goods crossing the Pacific Ocean -- or any ocean, for that matter -- you're not sure where your cargo is. The reason is that not even the most technologically savvy shippers and third-party logistics firms track materials once they've hit the high seas. For supply-chain chiefs and logistics managers, the real slack in the "chain" occurs when goods are in transit. From the time a trucker picks up a shipment of parts, until it's delivered to your plant or customer's door, untold days and often weeks pass. And while some trucking firms monitor their fleets electronically via GPS, the cargo aboard oceangoing vessels typically is not monitored. The upshot of this is that manufacturers are wise to keep track of goods in transit whenever possible, if only to keep at least some tension on the supply line. If that batch of motors your assembly line is counting on is going to be more than a week late, you sure as heck want to know about it ahead of time, in order to take some action, i.e., if possible, line up a secondary source, or at least let your customers know things are running behind schedule. "Shippers often lose sight of goods during intermodal transitions, and the Internet can help to increase visibility of goods during transit," states a May report entitled "New Technologies Will Improve Cargo Handling and Logistics" from Gartner Inc. "Track and trace functionality, delivered via self-service Web sites, is also cheaper and more efficient than a telephone call to a customer service center. As a result, logistics portals are increasing in popularity and importance." One such is the GTN Ocean Transportation Portal operated by GT Nexus for a consortium of leading ocean carriers, including APL, ANZDL, Hanjin, NYK Line and many others. The portal has 18,100 registered users from 6,300 global organizations. By using the self-service portal, shippers can check maritime schedules, reserve both container and shipping space, confirm the shipment and track the container's movement both pre- and post-voyage. They also can electronically file the bill of lading detailing each container's cargo, which, with today's post Sept. 11 security regulations, can run a score or more pages in length. "This has become a great control tool for many companies," says Richard Hart, operations director at GT Nexus in Alameda, Calif. "The whole industry has recognized that electronic documentation is the way to go." This kind of innovation is all the more remarkable in an industry that until recently, "was doing things pretty much the same way for 300 years," says GT Nexus' Greg Johnson, vice president for marketing and products. "The bottom line is that companies can run their businesses better if they know that three container loads of critical products are going to be late," Johnson adds. "Earlier visibility can help take some of the variability out of the supply chain and save companies money by making things more predictable." Doug Bartholomew is a former IndustryWeek Senior Technology Editor. He is based in San Francisco.