The Supply Chain Year: A Study in Contrasts

Opinion: Along the supply chain, there was hardly a dull moment. 2004 turned out to be a spectacular string of contrasts, ironies and contradictions.

Every industry has its ups and downs, but the supply chain business twisted and turned in some particularly contradictory ways in 2004.

Products got simpler, while customer and regulatory demands grew tougher. Big companies merged, but the overall SCM/L (supply chain management/logistics) market stayed fragmented. Many feared an outbreak of terrorism on the supply chain, yet workable standards for package tracking and security were still emerging.

Trade exchanges touted highly sophisticated back-end integration, but communications with trading partners remained very low-tech in a lot of places.

Lets look at the year in SCM/L as a study in contrasts. Here are a few of the specific highlights and lowlights.

Supply chain managers: Up against hard requirements

Supply chain managers faced difficult RFID (radio frequency identification) mandates from customers, together with tough changes in the federal regulatory climate. As the year wore on, some scurried to meet Jan. 1 deadlines from Wal-Mart and the U.S. Department of Defense, even in the face of RFID tag shortages.

To fight against drug counterfeiting, the federal FDA (Food and Drug Administration) released new policies for stimulating the use of RFID tags in the pharmaceutical chain.

Across the industry, managers worried over how proposed changes to U.S. customs requirements might impact business.

/zimages/5/28571.gifRead more here about tech companies concerns about a "safe harbor" rule.

Vendors: Bouncing back with simplified integration

As the worst part of the recent economic slump receded, traditional SCM/L vendors such as Manugistics and i2 unveiled plans for products designed to streamline integration and add new efficiencies. Unisys overhauled its supply chain strategy.

Meanwhile, with their increased penetration of SCM/L over the past few years, some ERP (enterprise resource planning) giants poured more energy into RFID. Also converging on the RFID space were big systems vendors IBM, Microsoft, Hewlett-Packard and Sun Microsystems.

Next Page: Consolidation along the top edges.