One of the key challenges in logistics today is the lack of collaboration and integration between the various parties in the supply chain. The web and RFID are two tools that are helping companies overcome this challenge and remain competitive. A third, and increasingly valuable contributor, is RosettaNet.
Formed in 1998, RosettaNet is one of the most ambitious standards organisations in the world, spanning the Americas, Asia and Europe. A non-profit consortium dedicated to the collaborative development and deployment of open, internet-based standards for aligning trading processes, its standards provide a lingua-franca for business-to-business (B2B) transactions. It offers a foundation for integrating critical processes among partners within the global trading network. In 2002 it merged with the Uniform Code Council (UCC).
Among the numerous standards available, RosettaNet has unquestionably made the biggest inroads into, and impact upon, logistics. Its open standards are driven by the industry for the industry.
Unlike organisations focused on s pecific business units or proprietary solutions, RosettaNet uses existing open standards, guidelines and specifications for crossplatform, cross-application and cross-network communications. It takes standards to the next level, creating e-business frameworks that transcend the boundaries of individual companies to enhance business processes for all.
The Global Logistics Council is RosettaNet’s sixth Council (formerly Board). Its aim is to engage value chain shareholders in developing RosettaNet e-business standards – to reduce costs, increase velocity, improve data quality and accelerate trading partner connections. It is also involved in compliance with government regulation, security considerations and in reducing the variability inherent in complex supply chain models. In addition, it partners with many of the world’s leading universities and technology institutes to develop graduate coursework and conduct focused research on e-business practices and supply chain management.
Council members comprise electronic component, information technology and semi-conductor manufacturers, telecos, solution providers, government agencies, universities, standards bodies, trade associations and third-party logistics specialists. In total, more than 500 multinational and regional organisations – including American Express, Ericsson, Exel, HP, IBM, Microsoft, Motorola, Netscape, Nokia and Sony – participate in its standards and services development, covering areas such as product descriptions, part numbers, pricing data and inventory status.
RosettaNet’s standards are analogous to the way humans do business. Typically this works and is reasonably efficient because the partners agree on the processes from the most basic level. For example, we produce and hear sound, we use a common alphabet to create words, we apply grammatical rules to words to create dialogue, and we use dialogue to conduct our business – perhaps through an instrument such as a telephone.
In an automated environment, RosettaNet employs servers to exchange information over the internet. HTML/XML functions as the alphabet, and electronic commerce applications are the instrument through which e-business processes are transmitted. The lack of agreement on the words, grammar and dialogue that currently constitute many e-business processes illustrates the need for standards. RosettaNet offers the ideal solution; its dictionaries provide the words, the RosettaNet Implementation Framework (RNIF) acts as the grammar, and its Partner Interface Processes® (PIPs®) form the dialogue.
In short, the aim of the Global Logistics Council is to take the pain out of logistics. One of the many areas it is currently working on is RFID deployment using RosettaNet standards, for example.
Integration and Collaboration
RosettaNet recognises the need for a co-ordinated and strategic approach to supply chain management issues. By consolidating independent logistics initiatives under a common leadership structure it aims to deliver added value to both its members and industry at large.
Industry is demanding ever greater supply chain visibility in response to global competitiveness and heightened security requirements. It is important that all companies integrate their IT systems, so that processes and information flows can keep pace with dynamic market conditions.
The RosettaNet Council provides an ideal platform for shippers, logistics providers, forwarders, customs authorities and carriers alike to define and adopt process-driven global standards, with the aim of reducing costs, improving visibility and enhancing data quality across the supply chain.
The requirements of the ‘shipper’ community are driving most current trends in the logistics industry: shorter product lifecycles, reduced time-to-market, lower stockholdings, improved order, shipment and stock visibility – and the need to highlight exceptions as early as possible in the supply chain.
Logistics is also changing as intense competition foments innovation, with providers jostling to provide enhanced services at lower cost. In addition, manufacturers and retailers are constantly looking to their logistics providers for innovative solutions, so that production, storage, transport and distribution costs can be reduced.
Many industry players are affected by manufacturing’s move to lower cost-base regions, such as China. This is also aligned with constant pressure to reduce costs and provide quality services with low margins. Again, such challenges can really only be overcome through constant innovation and investment in technology.
These forces are exposing weaknesses in the fabric of the global trading network and demonstrating the need for new standards in logistics and e-business.
RosettaNet has already developed major initiatives in support of logistics operations – such as the eCustoms Declaration Milestone Programme, that focuses on automation of customs import/export procedures, and the Shipment Notification Management Milestone Programme, that deals with Advance Shipment Notification (ASN).
The ubiquity of the internet is fuelling the growth of electronic commerce and changing the way products and services are bought and sold. As more business takes place electronically, using powerful search features, cross-channel inventory access and deep content, the burden on manufacturers, distributors, resellers and end-users grows. They are too often faced with tremendous inefficiencies – inhibiting their ability to deploy the web as an effective business tool.
For example, there may be no agreement on how a part number is defined or how inventory queries are made. Similarly, distributors providing pre- and post-sales technical support to resellers on tens of thousands of SKUs must grapple with disparate forms of product information from hundreds of manufacturers with no common taxonomy.
Resellers must also learn and maintain different ordering/returns procedures and system interfaces for each distributor, and have to channel considerable resources into back-office functions.
Intel is one company making major strides in the deployment of a B2B integration strategy based on RosettaNet standards. As it establishes a 100 per cent automated, customer-centric e-business solution, with fully integrated back-end systems, it is already achieving a significant return on investment. In 2002 Intel processed more than e2.5 billion in customer orders and e1.6 billion in supplier purchases using RosettaNet – an increase of almost 700 per cent in a single year.
But RosettaNet standards are supplanting more than just manual business processes. While EDI and barcode standards provide a foundation for electronic transactions across many sectors, some companies are building on them with electronic interfaces that encompass all aspects of commercial relationships. Intel, for instance, has said it intends to phase-out EDI transactions inside the company by 2006.
Quality Management System
In another development, the RosettaNet Council is evaluating a collaborative approach to fulfilling the requirements of the Cargo2000 community. This IATA interest group brings together major airlines, freight forwarders and ground handling agents with the aim of implementing a quality management system for the worldwide air cargo industry.
The Council is making it possible for all adopting companies and organisations not only to compete, but also to thrive in the digital marketplace. By leveraging the internet as an efficient B2B commerce tool, such organisations can realise measurable cost savings and productivity gains.
Exel and other major supply chain solutions providers have recognised the importance of this initiative, and are actively involved in the RosettaNet Global Logistics Council. RosettaNet is already sweeping the board in B2B standards in the high technology and telecoms industries, and is now carving out a clear pathway for other sectors to follow.
RosettaNet standards may be freely downloaded from www.rosettanet.org.
Mark Patel is Vice-President of e-Commerce and Supply Chain Integration at Exel, and Chairman of the RosettaNet Global Logistics Council. He may be contacted at email@example.com
The name RosettaNet is derived from the ancient Rosetta Stone – a basalt slab discovered in Egypt in 1799. The stone, found near the town of Rosette, was inscribed with the same message in three languages, dating back to 196 BC. Although the message itself was of little significance, scholars used the Greek text to translate the other two forms of Egyptian writing – thereby cracking the code of hieroglyphics.