By Julie Fraser

Synchronization is a key word being used in supply chain management concepts today. Synchronization represents perfect coordination and timing between separate operations, which should be the goal of supply chain management. Because we hear the term so often, it may seem mundane. Executed to its fullest, however, synchronization could take supply chain management to a different plane.

What do we mean by synchronization? There are four major factors that characterize how synchronized operations work:

• operate from a consistent set of shared data between pairs of trading partners
  
  
• consider all activities involved in the process
  
  
• communicate to all relevant parties as rapidly as possible
  
  
• function proactively -- driven by events, changes, or exceptions

Synchronization means that as events or exceptions occur, all of the next-level links in the supply chain get alerted. This process is replicated to each link or level in the supply chain rapidly enough so that the entire process is adjusted soon after the event. This way, all members in a supply chain are in sync with each other and market demands. The results: faster cycle times, less inventory in the pipeline, and more satisfied customers. As a supply chain synchronizes, it can create a dramatically different basis of competition.

I say dramatically different because what we see in our work shows that synchronization is almost non-existent in supply chains, and quite rare even within single companies. Let's compare this synchronized view to what we see in current operations.

Within one Plant -- Despite all of the advances in cycle time and throughput, most plants don't meet the four synchronization criteria. Most plants use multiple systems with overlapping and inconsistent data. For example, production planning systems are usually not in sync with the actual production on the lines during a shift. Few plants create schedules with a coherent and simultaneous view of all materials and resource constraints. Operators may work proactively, but usually based only on local events. There are inevitable time lags between their actions and notification of those in other parts of the operation because they use manual and paper-based systems.

Business Unit or Enterprise -- ERP systems go a long way toward shared data, but nearly every company still has multiple forecasts. One may come from sales and marketing, another from customer data, and yet another from production planning; the factors considered in all of these should be synchronized. While a "one number" concept is coming into play in forecasting, it is not yet widespread. A major reason for multiple sets of numbers in the past has been slow or no communication of the forecasts and plans to everyone who may need to know. The plant's actual progress to plan should drive the next round of plans, but the data is often woefully out-of-date.

SupplyChain -- Even if the plants and business units were in perfect synchronization, they are almost certainly not synchronized to trading partners. Many production companies are reluctant to share data with customers and suppliers directly, fearing an erosion of bargaining power, or competitor leaks. We have not yet seen replenishment planning collaboration involving customer, supplier and transportation provider, let alone distributor and warehouse operations. Rapid communication is possible, but not common; many EDI transactions are sent by fax and almost all are sent in batches. It's also rare to find trading partners setting up triggers to respond to events; that requires not only an agreement to the data format, but also creating common processes that cross company lines.

To synchronize a supply chain, customers will need views into actual order status and schedules of their suppliers. At the same time, manufacturers need views into actual consumption and demand data from their customers. To the degree all of this communication can be conducted securely over the Web or other electronic communication means, the simultaneous nature of synchronization between two levels of a chain can begin to take place.

Synchronization is a goal for leading companies. Not all of the technology is there, so an evolution is taking place. Daily batch EDI to create reorder point replenishment as a joint process between customer and supplier can be an effective synchronization step. Longer-range forecast sharing efforts such as collaborative forecasting and replenishment are the next step. Interactive collaboration between trading partners is an emerging possibility as Internet and Web-enabled tools join the supply chain software suites.

Synchronized supply chain collaboration can result in inventory reductions simultaneous with customers getting the products they want at the right moment. Beyond its status as a buzzword, synchronization hits at core business objectives: profits and competitiveness.