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Trading exchanges are expanding rapidly from this nar­row base. They will soon transform into collaborative trading communities by moving in two directions. First, they will handle the full trading lifecycle—from procurement, to supply chain management, to cus­tomer relationship management—spanning raw mate­rials suppliers to consumers. Second, they will move into other product and materials channels, including direct replenishment.


The full trading lifecycle and channel requirements of a collaborative trading community imply many spe­cific functional requirements. Figure 2 positions these business functions in the trading model.


For replenishment-based products, a collaborative trading community must consider the time-phased re­quirements of supply and demand. Purchasing nego­tiations are infrequent. A forecast-driven process is required to maintain availability, while keeping inven­tory at a minimum.


The community identifies and negotiates planned promotions, new product introductions, inventory policy changes, and store/DC/plant openings/closings. It forecasts demand, allocates demand to selected sup­pliers, calculates replenishment plans, authorizes ship­ment, selects loads and routes, and tracks shipments to delivery. The community also captures historical data, such as actual sales on-hand, orders, and shipments throughout the supply chain to be used in future plans. Finally, the community uses exceptions and alerts to ensure continuous feedback and improvement.

To Be Continued

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