CIO — Integrating one company’s systems is not anend in itself, and it’s not just a means to aligning corporate and IT goals. As the discussion below among three executives from this year’s CIO-100 honorees demonstrates, integration is all about embracing players who work outside your company’s walls. That means sharing information from different parts of your organization and convincing suppliers, business partners and especially customers that they and you will both profit from this information exchange. This trio of CIOs represents companies of different sizes and different industries, but each faces famous competition: Paul Ingevaldson, senior vice president of IT at Ace Hardware, battles for consumers with the likes of Home Depot, while Quaker Chemical CIO Irving Tyler vies for business with the likes of Dow Chemical, and Solectron Corporate Vice President and CIO Bud Mathaisel competes with Flextronics among others in the electronics trade. But each of the three reach a common conclusion: The knowledge that comes from this effort yields both value and a competitive advantage.
Rick Swanborg, president of ICEX, moderator: Tell us what you mean by integration. What does it look like? How is it changing? And does it really represent a competitive advantage?
Paul Ingevaldson: We are right in the middle of the supply chain, as a wholesaler with 15 distribution centers. We have 65,000 items in those distribution centers that we’re distributing to 5,000 retailers. On top of that, we end up with thousands of vendors supplying products to our distribution centers and directly to the stores. We continually look at ways to automate and integrate the supply chain. Even though we don’t control the whole supply chain, we are trying to integrate it though significant automation.
We’ve been aggressive in vendor-managed inventory and have recently been aggressive with something called CPFR [collaborative planning, forecasting and replenishment]. This is where the [suppliers] actually look at our files on our computers and automate supply functions through us. That’s been a very positive development [because] supply chain automation is extremely important to us. Any time we can automate part of the relationship with our dealers and eliminate paperwork, it really makes it easier for everybody.
Bud Mathaisel: Our definition of integration is inter-enterprise process reengineering. The whole movement toward reengineering has shifted to inter-enterprise, and it includes suppliers, it includes customers, it includes visibility up and down the supply chain to the next point of contact.
What’s happened in most organizations is that the monolithic ERP movements where integration was one large ERP project have been replaced with separate instances of ERP, and integration between and among those. Integration within the enterprise characterized by the EAI movement and inter-enterprise integration goes to levels within the supply chain.
