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BRIDGES: GT Nexus Creates a Supply Chain Network of Networks

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As the spring conference season chugged along, I had the opportunity last week to attend “Bridges, ” a conference for users of two different, yet surprisingly complimentary products. The company is GT Nexus, and the products and providers, GT Nexus and TradeCard came together in January 2013 to form the “new ” GT Nexus. This was their first joint users’ conference and it was attended by about 500 people.

Admittedly, I was far more familiar with TradeCard than I was with the old GT Nexus, but when looking at the solution footprint, you just can’t help but wonder why these two companies didn’t come together long ago. In quick summary (and taken from the companies’ original merger statement), TradeCard’s focus was cloud-based applications for the financial supply chain (activities triggering and supporting the movement of money) and production visibility solutions. The “old ” GT Nexus specialized in cloud-based logistics and global transportation control solutions for manufacturers, retailers and logistics service providers: the movement of products.

The vision for the new company is fascinating, and addresses quite nicely the challenges and opportunities inherent in our new omni-channel world. RSR has long observed that the key to success, which translates to speed and flexibility, on the “buy side ” of the retail business is collaboration between trading partners. Retailers recognize it too, although overcoming decades of adversarial relationships with suppliers has proved challenging. At Bridges I heard some very practical case studies on how collaboration can work and create a more nimble network of enterprises. Executives from Patagonia, Oakley and Clarks talked about the value of collaboration and the use of a single network to gather information from multiple vendors across the entire product life cycle.

Executives from Gap, Williams-Sonoma and DHL talked about the value of knowing where inventory is at any point in the supply chain, allowing the companies to postpone distribution decisions as long as they can and react and reallocate inventory across companies, channels and stores. RSR has observed in our data for several years that retail sales forecasts are pretty volatile. The key to managing this uncertainty is nimbleness, and visibility provides that flexibility. All parties agreed that a zero footprint application (that’s this version of “Cloud “) can help get vendors up and running in new and existing geographies.

Timing being what it is, the elephant in the room was sourcing practices and standards: the disaster in Bangladesh and Tesco’s horsemeat scandal. For those who may not have heard about the Tesco problem (I hadn’t) apparently horsemeat DNA was found in frozen beef burgers sold by the company. Finding pig DNA in the “beef ” created an additional scandal, as both Muslims and Jewish people consider pork to be taboo. Tesco laid the blame for poor quarterly results partially on the horsemeat scandal.

RSR has observed on many occasions that retailers admit to bypassing various types of factory audits, even as they bemoan the quality of the private label product they sell. In response Patagonia has spearheaded an initiative for the apparel industry that includes a group called the Sustainable Apparel Coalition (currently including more than 80 other companies ranging from retailers to NGOs), charged with creating an index to measure the environmental and social performance of apparel and footwear products. This index is called the Higg Index. Further information on the index can be found here. Certainly visibility is a pre-requisite to calculating the index, and GT Nexus is poised to support it.

Finally, most interesting to me was the way GT Nexus Vice Chairman Kurt Cavano described the power of their network, estimated at over 20,000 businesses spanning every major industry, managing over $100 billion in goods. As he put it, imagine if the phone company had to “hard wire ” the connections from your house to everyone you might want to chat with on the phone. Every time a new home was bought, the phone company would have to create customized new direct connections for the residents. Instead, you buy your phone and hop on the network. No muss, no fuss. That’s the analogy and the promise of the GT Nexus network. It’s a powerful metaphor.

I’m looking forward to watching the new GT Nexus and seeing how two separate solution footprints become one and customers take advantage of the entire new platform.

 


Newsletter Articles June 11, 2013
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