IBM wins expanded Telstra deal

IT’S not every day that IBM’s global chief rolls into town. So when Big Blue CEO Sam Palmisano blew into Australia for the first time since taking the helm, it was always a good bet that the local subsidiary would make a big announcement.

No surprise that the announcement should involve Australia’s largest company (and a nine-figure number).

IBM said it has expanded its existing seven-year supply chain deal with Telstra, an extension that would deliver $200 million in additional cost reduction benefits to the telecom giant.

Telstra procurement executive director Ian Wheatley said Phase One of the company’s supply chain project with IBM had been a success and the company was on target to save $500 million over seven years.

The next phase of the supply chain transformation program would focus on improving Telstra’s efficiency in ordering, managing and delivering telecommunication parts needed by technicians and engineers to perform network maintenance, fault repairs and activation of customer services.

“In the first phase of our supply chain transformation, we replaced four payment and ordering systems with IBM's out-of-the-box software,” Mr Wheatly said.

“In phase two of the program, IBM will provide a single end-to-end view of our inventory supply chain and enable us to deliver the right part, at the right place, at the right time – improving customer service and reducing costs. This is great news for our customers and shareholders,” he said.

Telstra says it has reduced its procurement costs by $159 million since September last year.

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Oracle Suite release adds supply chain functions

ENTERPRISE software giant Oracle has unveiled new capabilities aimed at manufacturers within its E-Business Suite 12 that it says gives users better control and lower operating costs.

Among a series of advances, Oracle said the latest E-Business Suite release delivered capability that simplified compliance processes, increased performance for leaner, global operations.

“Oracle E-Business Suite Release 12 offers many, new process-industry capabilities enabling our manufacturing customers to lower operating costs, increase efficiencies and effectively compete in today's global economy,” Oracle process manufacturing industries vice-president Doug Souza said.

It includes new collaboration-style functions to better develop and execute enterprise-wide plans, and to improve product innovation. The new release functions are especially aimed at process manufacturers, the company said.

Process manufacturers are challenged with supply chain complexities including shelf life limitations, product customisations and regulatory surveillance.

The release includes improvements to Oracle Advanced Supply Chain Planning software, including sequence-dependent setups, shelf life, and support for complex process routings.

A new distribution planning capability in Oracle Advanced Supply Chain Planning software includes support for fair share allocation, multiple inventory policies, circular sourcing, global forecasting with local allocation of supply and ship method.

Customers can use out-of-the-box integration between Oracle Process Manufacturing and Oracle Production Scheduling to pre-empt supply chain disruptions and maximise shop-floor efficiency while minimising cost, the company said.

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DHL tempers overheated RFID plan

GLOBAL couriers DHL has scaled back its ambitions for radio frequency ID in its supply chain system, citing cost as a major issue.

The company has previously said it planned to put an RFID tag on every parcel it shipped globally by 2015 as part of a worldwide technology upgrade. It said the RFID technology would improve controls over shipments by giving it better tracking information, and cut costs.

But speaking at an RFID conference in the US this week, DHL’s senior program manager Bob Berg for RFID told InformationWeek magazine it had scaled back the plan.

Mr Berg told the conference that DHL still had huge implementation plans for supply chain systems using RFID technologies, but that it no longer was tying its goals to a date.

“If we went gung-ho [on an RFID deployment] it would cost over $1 billion,” Mr Berg told the conference.

“It's not going to be done on a lark. It's going to be carefully thought out. There has to be ROI.”

Mr Berg said DHL wanted to provide more “slap and ship” services in the US to customers but had not seen much demand for it. In Europe the company provides a slap and ship service to retail giant Metro which has one of the only RFID powered supply chains in the world.

Despite the interest from WalMart in RFID in the US, even WalMart suppliers had not shown much interest in the service.

Mr Berg said DHL would not be rolling out global RFID infrastructure simply to improve its own internal efficiencies at this stage.

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RFID national standards pilot extended

SUPPLY chain electronic standards body GS1 Australia has been given additional funding from the Federal Government to extend its national RFID/Electronic Product Code (EPC) pilot program.

Called the National Demonstrator Project (NDP), the pilot aims to develop a full business case and clearly show the return on investment for EPC/RFID for electronic proof of delivery by individual Australian businesses.

GS1 Australia general manager John Hearn said the project extension would run until the end of April to test the concept of paperless delivery and electronic proof of delivery (ePOD). It has been part funded by the federal Department of Communications, IT and the Arts (DCITA).

RMIT University and GS1 Australia will jointly manage the project and provide technical advice, while Telstra will continue to provide EPC communications through its Adaptive Asset Manager RFID solution and networking infrastructure for the project team.

Companies on the project team include Capilano Honey, CHEP. Franklins, Linfox, Masterfoods and Procter & Gamble. Retriever Communications will RFID-enable their application at CHEP and provide a scanning application for RFID readers, integrated into the Telstra systm.

“This extension will be useful to illustrate how EPC standards facilitate the interoperability of different pieces of technology, allowing companies to achieve complete integration of EPC information into their business process,” said RMIT University’s head of Manufacturing and Materials Engineering Dr John Mo.

The team expects that the pilot will provide quantifiable results about the benefits of using RFID technologies and EPC standards to facilitate paperless delivery and electronic proof of delivery (ePOD).

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