MAY 16, 2005 (COMPUTERWORLD) - PHOENIX -- Globalization is having a hefty impact on companies' supply chain management systems, requiring greater scalability of applications and better integration with far-flung partners.

That was a key theme repeated by attendees of i2 Technologies Inc.'s Planet 2005 user conference here last week.

With cheap manufacturing, distribution and supplier resources available overseas -- particularly in the Far East -- even companies with established supply chain backbones are finding that they need to adapt to survive, users said.

These global companies, facing ever-thinner profit margins, see an increasing need for centralized, accurate data, greater integration and the ability to respond nimbly to changes in demand.

For instance, at Payless ShoeSource Worldwide Inc., planners must factor some 22 billion variables when crunching annual supply and demand numbers, said Darrel Pavelka, senior vice president at the shoe retailer's merchandise distribution, planning and supply chain unit.

The Topeka, Kan.-based company runs i2's Merchandise Planner software, and when making supply chain decisions, its system must account for 4,600-plus stores, 2,000 unique brands of footwear and 13 sizes, as well as 200 factories in seven countries, said Pavelka.

Supply chains also suffer from an inconsistent worldwide infrastructure, said Kevin Bott, vice president of supply chain solutions and technology services at Miami-based Ryder System Inc., which uses i2 Transportation Manager.

While North America and Europe have sophisticated telecommunications systems to support enterprise tools, Southeast Asia is "an entirely different ballgame," Bott said. "The infrastructure is not as good there. In China, some stuff is being horse-drawn and there is no technology [to support supply chain processes]."

40 Years Behind
Places where contract suppliers or manufacturers are technologically behind are much like North America was 40 years ago, when supply chain systems began to be automated, said Ellen Martin, vice president of supply systems at apparel maker VF Corp. The Greensboro, N.C.-based company runs i2's Demand Fulfillment and Supply Chain Planner products.

Martin noted that because companies have already implemented supply chains -- and are now savvier than when they first installed them -- it won't take 40 years to get overseas operations up to speed. But "it will take a lot more creativity," she said.

VF is now contracting with suppliers and manufacturers in the Far East, which requires a high level of trust, said Martin. She said she would like to see vendors such as i2 and SAP AG -- which provides VF with its ERP backbone -- be more willing to collaborate so data can be easily integrated between their systems.

Logistics is also a vulnerable point in a global supply chain, noted Dick Hunter, vice president, Americas, for manufacturing and distribution operations at Dell Inc., which runs i2 Factory Planner and Supply Chain Planner. Dell imports inventory from China and Korea, and receiving it on time is crucial, he said.

Companies are beginning to realize that their supply chains are global and need to be centralized, said Gartner Inc. analyst Dwight Klappich. Some companies run multiple supply chain applications in different regions and don't consolidate the data in one place. They're finding that integration task to be difficult, he said.

Dallas-based i2 is looking to address a number of those issues, offering more-extensive training services and, from a technology perspective, what it calls the agile business platform.

Michael McGrath, i2's CEO, said that the new platform can help companies get supply chain installations up and running in as little as four months by allowing them to snap in applications on a Microsoft .Net- or IBM WebSphere-based middleware platform.