Microsoft, NAM Announce Alliance To Promote Use of Internet Technologies Within Supply Chain
CHICAGO, March 17, 1998 — Today at National Manufacturing Week, Microsoft Corp. announced a strategic alliance with the National Association of Manufacturers (NAM), the nation’s largest industrial trade association, to promote the use of Internet technologies within the supply chain.
As part of these efforts, Microsoft and NAM are co-sponsoring the Manufacturer of the Future Seminar, where Microsoft will be showcasing its comprehensive, scalable platform, which allows manufacturers and distributors to dramatically reduce customer support costs and stimulate real-time interactions. In his keynote titled Manufacturing in the Next Millenium, Microsoft Executive Vice President and COO Bob Herbold highlighted many ways that Internet technologies can be used to automate the supply chain, minimize transaction costs, enhance customer service and increase productivity.
In his presentation, Herbold quoted recent International Data Corp. (IDC) data that illustrates the value of this technology in the supply chain. “Return on investment from this technology results primarily from reduced costs and improved productivity. However, because it enhances real-time interactivity it can also lead to increased sales.” According to IDC, the use of Internet technology in the form of extranets alone can cut customer support costs up to 75 percent.
“The ability for manufacturers and distributors to communicate smarter and faster while providing customer service at a lower cost is more critical than ever,” said Jerry Jasinowski, president of the National Association of Manufacturers. “With Internet technology, supply-chain members of any size can increase productivity, sales and customer service for a fraction of what it costs them to do business using conventional communication methods.”
Revolutionizing Business Processes
Microsoft offers a unique platform that allows for the automation of information sharing and distribution processes currently delivered by most manufacturers and distributors through conventional mediums such as telephone, fax and U.S. mail. The platform includes the Microsoft® Windows NT® Server operating system 4.0 with Microsoft Internet Information Server (IIS), Microsoft Site Server 3.0, Microsoft SQL Server
™6.5, Microsoft Exchange Server 5.0, Microsoft Commercial Internet System, Microsoft ActiveX® Technologies and the Microsoft Internet Explorer 4.0 Web browser, featuring the latest in push technology.
Until now, electronic data interchange (EDI) solutions have been the traditional enabling technology for electronic commerce and supply-side management. While addressing an audience of more than 500 manufacturers, Herbold added that solutions built on the Microsoft platform “enhance existing EDI investments by enabling manufacturers to integrate existing EDI systems with state-of-the-art packaged applications that leverage Internet standards.”
Small and large businesses are interested in purchasing packaged line of business applications more frequently. Microsoft’s program for integrating best-of-breed applications is the Value Chain Initiative (VCI), a consortium of more than 130 industry-leading independent software vendors (ISVs) seeking to extend application integration internally and then beyond the enterprise to incorporate suppliers, partners and customers. This plan includes packages for accounting, warehouse management, transportation management and EDI.
Some of the benefits of this extended approach include the following:
Stimulated productivity and increased sales, enabling manufacturers and distributors to increase interaction with customers and increase sales during and after business hours, with the option to handle administrative operations such as ordering and sales tracking when most convenient
Compatibility with existing EDI technology means solutions using Internet technologies cost 20 percent to 40 percent less to operate than traditional EDI systems and require 80 percent less in training costs.
Reduced costs (and saved time) associated with internal and external business transactions, including purchase of paper materials, printing and postage
Enhanced communication and information distribution capabilities, enabling manufacturers to share both static and dynamic information with colleagues, suppliers and customers 24 hours a day, 365 days a year
Streamlined business processes, such as report generation, order placement, fulfillment, personnel information and database management
Secure interactive communication among all members of the supply chain
Increased Opportunity for VARs and Internet Service Providers
According to IDC, extranet solutions also create many opportunities for technology suppliers, especially networking and systems integration companies. By definition, extranets require a higher level of security and reliability than the Internet to support business transactions and communications. A network service provider is required to host the extranet and create manageable and secure connections between business partners. IDC predicts that the vast majority of companies will rely on partnerships with technology suppliers and consultants to accomplish this. In addition, this opportunity allows VARs to expand their window of opportunity beyond hardware and software to include installation and management services.
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