Supply Chain Trading Partner Integration Report w-INFA...

9 Tips

for Trading Partner

Integration Success in

Modern Supply Chains

Valuable lessons on how leading organizations successfully automate and integrate trading partners

EXECUTIVE INSIGHT SERIES

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2 Copyright 2010 NorthPage Research LLC ! www.northpage.com

About this Report Trading Partner Integration is a business-

critical function for modern supply chains.

Through the tips in this report, executives and

managers will gain key insights into how

leading organizations successfully automate

and integrate trading partners while building

effective and efficient Trading Partner

Integration operations.

NorthPage Research produces independent

publications and online guides to help business

decision makers


9 Tips for Trading Partner Integration Success

in Modern Supply Chains

" Run an Autonomous Trading Partner Integration Operation

" Make Transformation a Trading Partner Integration Force Multiplier

" Ensure Data Quality throughout the Trading Partner Integration Operation

" Prepare for Increased Complexity and Dramatic Growth in Trading Partner Integration

" Do More with Less: Strive to Achieve Greater Levels of Trading Partner Integration Efficiency and Productivity

" Provide Trading Partner Data for Customer, Supplier and Operational Optimization

" Create a Secure Trading Partner Integration Operation

" Get and Keep Trading Partner Integration Stakeholders on the Same Page

" Embrace Trading Partner Integration Standards and Compliance


Run an Autonomous Trading Partner Integration Operation WHY

The Trading Partner Integration (TPI) function represents a high value service center and business-critical function. As business reliance on TPI grows, so does the value of operating the TPI function as an autonomous operation.

Committed TPI planning, resources and organizational frameworks allow TPI operations to better implement best practices and quality control mechanisms and optimize service levels for internal and external Trading Partner constituents.

Trading Partner Integration Constituents

Internal points of integration are of equal importance to external, requiring the TPI function to proactively and formally handle and invest in internal agreements, relationships and service levels.

Developing an autonomous TPI structure supports the growing trend to create componentized internal supply chain functions.

TIP


HOW

• To optimize a Trading Partner Integration (TPI) operation, run it as a well-defined business unit, department, or workgroup. The optimal structure and degree of autonomy is dependent on the size and structure of the parent company and the role and nature of the Trading Partner Integration function within an organization.

Levels of TPI Autonomy

• Regardless of the size or scope, the Trading Partner Integration function should be operated as a well-defined entity. TPI-specific strategies, budgets, plans and reporting mechanisms need to be developed and refined.

• Finding the right mix of responsibility, authority and autonomy for TPI budgets, personnel and business objectives is essential. In many organizations, TPI is funded by and run under IT or operational departments. When operating within such business units, it is essential to setup an efficient and effective organizational and operating structure to set and meet key TPI service level targets and strategic objectives.

• Research or review best practices related to TPI methodologies including Lean Integration and Integration Competency Centers.


Make Transformation a Trading Partner Integration Force Multiplier WHY

All Trading Partner Integration productivity, reliability and performance results begin with transformation. Whether performed manually or through automation, the transformative process of accurately receiving, validating and transporting business critical transactional data represents the intelligent core of the Trading Partner Integration function.

Transformation is the Intelligence in the Trading Partner Integration Function

A transformation process extracts the data structure and data from a source schema or file format and transforms the data into a desired destination schema and file format. The transformation process typically includes data normalization, field manipulations and processing according to an organization’s master data rules. In this process, the data content is not changed.

The quality of an organization’s TPI transformation capabilities relates directly to its efficiency and accuracy, as well as the levels of internal and external productivity and user satisfaction. Effective transformation allows organizations to quickly integrate new business partners and achieve drastic reductions in time and effort expended when defining new transformation “maps”.

TIP


TPI Transformation lies at the heart of optimized supply and demand chains.

HOW

• Make it a high priority to invest in transformation methodologies, processes, and technologies. Advance the TPI organization’s ability to accurately and reliably enable relationships and transactions through intelligent transformation.

• Benchmark and analyze TPI Transformation quality. Measuring at a granular level the accuracy and completeness of each transformation via tests and samples is essential.

• Track and improve upon the ratio of automated to manual transformations. For most TPI organizations, automation holds the greatest potential for substantial gains in productivity, accuracy and reliability. While it may be impractical to believe an organization can reach “transformation nirvana” – automatically transforming data from any source and in any format – it is imperative to look for opportunities to do so and save time, money and resources through the highest degree possible of automated transformation.

• Evaluate, select and implement a single automated transformation solution to gain economies of scale through common transformation definitions, reuse across partners and partner types and TPI user productivity.

• Proactively measure the TPI operation throughput and transformation capacity. Identify current and projected TPI bottlenecks.

• Seek to empower business users to manage automated TPI transformation processes without the hands-on involvement of IT resources. Doing so will optimize TPI operations.

• By design, prepare for and proactively handle unstructured, semi-structured and structured data in the TPI operation. Learn and apply the distinct approaches and best practices related to handling differences between these distinct data types.


Ensure Data Quality throughout the Trading Partner Integration Operation WHY

Trading Partner Integration is a business critical source of data, contributing to the efficient operation of critical supply chain and customer processes.

As Trading Partner Integration “changes” data through the transformation processes, stakeholders must understand the profound effect that TPI data quality has upon the parent organization’s Data Governance and Master Data Management initiatives.

TPI operations are only as good as their data. And TPI data is only as good as the TPI operation’s ability to cleanse, normalize and process the data.

Trading Partner Integration Data Quality Objectives

TIP


HOW

• Early detection of data quality issues is the key.

o Identify bad data at the point of entry into the transformation process and automate the process of delivering error feedback to the sender. This practice will result in the creation of a process that delivers continuous TPI data quality improvement.

o Use data quality sampling and testing as important tools and early warning indicators.

o Identify the causes of TPI data quality problems including broken or non-existent processes, ineffective quality control and poor system design.

o TPI data quality symptoms and problems can be readily identified. Addressing these problems requires a proactive investment in the plans and resources needed to find them.

• The primary cause of poor TPI data quality is the manual processing of trading partner data. Remove manual steps wherever possible and improve data quality.

• Identify and update “hand coded” transformation interfaces to eliminate errors and inefficiencies. Hardened, manually-coded interfaces lack the ability to maintain transformations due to partner-initiated changes to the data which obscure TPI process visibility.

• Look for disconnected or limited-function systems and processes that cause users to rekey the same data in different places.

• Ask for help. Most organizations have ongoing Data Quality, Master Data Management and Data Governance standards and initiatives. Seek expert assistance to ensure high-quality TPI operations and achieve the necessary levels of data “trust”.


• Apply data quality methodologies focused on the five dimensions of data quality:

The Five Dimensions of Data Quality

• Review levels of Data Quality and Data Management knowledge in the TPI operation.

• Look for opportunities to use industry standard codes and unit definitions, TPI-focused solutions and industry-specific TPI methodologies.


Prepare for Increased Complexity and Dramatic Growth in Trading Partner Integration WHY

Trading Partner Integration operations are experiencing dramatic growth. Failing to prepare for increased TPI complexity and scale compromises the successful operation of supply and demand chains resulting in significant negative consequences for the organization.

Trading Partner Integration Complexity & Volume Drivers Complexity

• Demand-driven product strategies and increased reliance on Trading Partner Integration

• Supply chain globalization and geographic expansion

• Government and trading partners compliance mandates

• Increased business reliance on Trading Partner Integration

• Increasing levels and degrees of Trading Partner sophistication

• Improved Trading Partner Integration reliability and functionality in support of new initiatives

• Increased use of service-level guarantees and increasing levels of service expectation

• The integration of new systems, processes, data and partners resulting from corporate acquisitions

Volume

• Increasing numbers and types of partners

• Increasing volumes of transactions handled

• Increased types of information required to be exchanged

TIP


Infrastructure

• New trading platforms and standards

• New communication methods and protocols

• New industry standards

• New data formats

• Technology advances

• Trading Partner Integration and Supply Chain security threats

HOW

• Review the Trading Partner Integration function across the above-listed areas.

• Plan and resource the Trading Partner Integration function aggressively.

• Build the strongest-practical infrastructure, processes and resource-base to enable trading partner growth.


Do More with Less: Strive to Achieve Greater Levels of Trading Partner Integration Efficiency and Productivity WHY

In the era of limited growth or shrinking IT and infrastructure budgets, successful Trading Partner Integration operations must “do more with less”. TPI operations also face increased demands including the onboarding of additional partners, handling of new document types and the supporting of new and more rigid service level agreements.

Disconnect: Trading Partner Integration Budgets and Volumes

Flat or shrinking TPI budgets battle transaction volume increases

TIP


HOW

• Improve the Trading Partner Integration function within budget constraints through optimization. Conduct operational analyses to find efficiencies and savings. Eliminate unnecessary functions. There are many drivers of Trading Partner Integration efficiency including:

o Simplification of the enrollment processes

o Implementation of online self-enrollment for new trading partners

o The promotion and rewarding of partners for self-administered testing and compliance

o Reductions of resources required to process paperwork

o Implementation of automated core TPI functions including transformation

o Reduction of expenses related to VAN and outsourcing services through developing the ability to directly exchange data with large partners using advanced protocols such as AS2

o Identification and elimination of TPI bottlenecks and inefficiencies including

# Manual processing

# Inefficient tools and processes

# Inability to scale trading partner onboarding

# Time- and resource-intensive troubleshooting

• When facing TPI-specific budget reductions:

o Relate them directly to TPI effectiveness. Forecast the impact of such cuts on key performance indicators.

o Make a case to executive management for additional TPI resource investment by demonstrating Trading Partner Integration as a business-critical function.

o Look for opportunities to recover and increase Trading Partner Integration resources by pursuing budget, resource and headcount contributions from internal constituents (e.g., IT, supply chain / operations).


Provide Trading Partner Data for Customer, Supplier and Operational Optimization WHY

The Trading Partner Integration function provides a unique and valuable source of customer and supplier performance data that improves key demand and supply chain partner analyses. TPI constituents, including internal stakeholders and external trading partners, that aggressively measure and share key TPI data elements reduce costs while enabling greater levels of automation, data quality and productivity.

HOW

Work with internal stakeholders including procurement, supply chain/operations, front office groups and external trading partners to develop customer and supplier scoring systems. These systems enhance fulfillment capabilities and end-to-end processes, move the organization closer to “perfect order” attainment and sharpen vendor performance analyses.

Trading Partner Scorecard Elements

To optimize demand and supply chains, track and share Trading Partner performance and compliance data with TPI constituents.

TIP


Create a Secure Trading Partner Integration Operation WHY

As a gateway to internal and external networks and systems, Trading Partner Integration operations represent a target-rich environment for hackers. With many moving parts and large numbers of diverse constituents, modern TPI operations possess many potential security vulnerabilities.

The information transported through and managed by TPI systems represent a transactional and at-rest data goldmine for hackers. Securing TPI environments is a critical business imperative necessary to avoid costly disruptions to service, losses of data and disruptions to the supply and demand chain operations.

HOW

• Incorporate Trading Partner Integration Security within Policies, Procedures and Systems

o Configure TPI Systems to limit access and exposure

o Harden Trading Partner Integration entry and delivery mechanisms

o Identify and protect critical processes and data elements

o Incorporate Trading Partner Integration security elements in functional requirements

o Promote awareness, educate, and train personnel on Trading Partner Integration security risks

o Select secure TPI system components

o Protect, monitor and audit all TPI systems

o Test for security vulnerabilities throughout the TPI development, change and enhancement lifecycles

TIP


• Trading Partner Integration security risks and remedial strategies should be identified and developed by:

o The TPI system owner(s)

o IT security personnel

o Supply and demand chain stakeholders

o External IT security experts (optional)

o TPI technology component and service providers


Get and Keep Trading Partner Integration Stakeholders on the Same Page

WHY

The relationships that develop and flow through the TPI function represent the function’s lifeblood. Aligning priorities, plans, processes and resources with key stakeholders is critical to the success of the TPI operation.

Balance and Integrate Internal Trading Partner Relationships

HOW

• Analyze the drivers of change in key TPI stakeholder relationships. Forecast and plan with the full involvement of key stakeholders.

• Proactively identify and remove resource, process, and throughput bottlenecks in conjunction with the stakeholders.

• Set up systems and processes to identify and communicate problems - particularly at the points of intersection between the TPI stakeholders.

• Use service levels and scorecards as tools to quantify relationship performance among the stakeholders.

TIP


• Introduce planned and event-driven communication between the TPI operation and stakeholders.

Embrace Trading Partner Integration Standards and Compliance

WHY

Standards represent an opportunity while compliance grows as a requirement and reality for Trading Partner Integration operations. The need for both is consistent with the increased realization that TPI is a business-critical function.

The proactive use of standards in TPI provides businesses with the opportunity to gain advantage in the growth of trading partner volumes and TPI complexity.

Compliance is a multi-level and multi-directional framework that ensures the TPI function is compliant while ensuring Trading Partners maintain compliance. When used properly, compliance provides an effective discipline for the development and evolution of successful TPI operations.

HOW

• Standards implementation and compliance adherence is a journey, not a destination. Start small with an internal focus.

• Alignment is the key. Design standards usage and compliance into systems and processes.

• Standards usage and compliance is typically led by operational users and groups within the supply chain organization.

Standards, Regulation and Compliance Drivers

TIP


WORKS CITED Andreas Wechselberger, STI Innsbruck. B2B Integration Concepts. < http://www.sti-innsbruck.at/fileadmin/documents/teaching_archive/b2b05/B2B%20Integration%20Concepts.ppt>

Thomas Kluckner, Florian Haider, Biomed Central. B2B Integration Modeling Methodology. < http://www.sti-innsbruck.at/fileadmin/documents/teaching_archive/b2b05/B2B%20Integration%20-%20Modeling%20Methodology.ppt >

Roy Hayward, The Integration Engineer. BooknetCanada: Real Life Standards and Usage Spec. < http://www.theintegrationengineer.com/booknetcanada-real-life-standards-and-usage-spec/>

Roland Dachs, Crown Europe. 2009. The Future Supply Chain. <http://www.ciesnet.com/pfiles/2018Webcastfinal.pdf>

Leslie Hand, Ahold. 2006. Measuring Data Quality. < http://www.gmabrands.com/events/2006/dacp/presentations/MeasurementTolerances.ppt>

Michael Flaherty, Government of Canada, Organization. 2010. The Canada – U.S. Trade Relationship. <http://www.supplychainmanagementconference.com/US-Canada%20SUNY%20Plattsburgh%20Supply%20Chain%202010%202.ppt>

Mickey North Rizza, AMR Research . Electronic Integration Promises Retail Trading Partners Big Bang for their Buck. < http://www.apparelmag.com/ME2/Audiences/dirsect.asp?sid=749887DB58424896AE5FC2F6F37D3DF5&nm=Electronic+Integration+Promises+Retail+Trading+Partners+Big+Bang+for+their+Buck&AudID=E5C3BAB69B684CFD8BC3E73735D9DB69>

Richard Y. Wang, Yng-Yuh Richard Wang, Elizabeth M. Pierce, Stuart E. Madnick, Craig W. Fisher. 2005. Information Quality. M.E. Sharpe.

Dimitris Folinas, Maro Vlachopoulou and Vicky Manthou, University of Macedonia, Marianna Sigala, University of the Aegean. 2004. E-volution of a Supply Chain: Cases and Best Practices. <http://www.emeraldinsight.com/Insight/ViewContentServlet?Filename=/published/emeraldfulltextarticle/pdf/1720140401.pdf >

Dr. Archie Lockamy, Samford University and Dr. Kevin McCormack, DRK Research and Consulting LLC. Supply Chain Event Management Best Practice Models.


Marianne Swanson, Nadya Bartol, and Rama Moorthy, National Institute of Standards and Technology, US Department of Commerce. June 2010. Piloting Supply Chain Risk Management Practices for Federal Information Systems. <http://www-08.nist.gov/publications/drafts/nistir-7622/draft-nistir-7622.pdf>

Dr. Ir. J.G.A.J. van der Vorst,.2004. Supply Chain Management: Theory and Practices. <http://www.ldi.wur.nl/NR/rdonlyres/B75DC197-FC52-4CD8-9282-3B80BC9B921A/26752/SupplyChainManagementbijdrageJackvanderVorstv10.pdf>

Marcel Bijlsma and Johan Koolwaaij, Telematica Instituut. 2001. B2B Integration: The Playing Field. <https://doc.freeband.nl/dsweb/Get/Document-21651/D1.3.5v1.3%20B2B%20integration%20the%20playing%20field.ppt>

Efraim Turban, Jae K. Lee, David King, and Ting Peng Liang, 2010. B2B E-Commerce: Selling and Buying in Private E-Markets. Electronic Commerce 2010. Prentice Hall

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