Put it on Autopilot

To thrive in the global marketplace, your business must establish a flexible and lean global supply chain, or GSC, covering everything from your supplier's supplier to your customer's customer, anywhere in the world. Automation is the key to a streamlined GSC because it eliminates a disjointed system of phone calls, e-mails, spreadsheets and faxes, and improves your ability to meet shipment and production deadlines.

Automated GSC can result in operational improvements, cost reductions and increased profitability. "It has huge cost benefits because you can buy as much as you need, when you need it," says Evan Goldberg, CTO and founder of business software firm NetSuite Inc.

Another advantage is credibility. Auto-mating helps suppliers prove they are real companies that meet governmental regulations in places where they conduct business, and it helps buyers verify that the parties in a transaction are legitimate and authorized to carry out deals. In addition, before the end of 2007, the U.S. Department of Homeland Security will require every importer and exporter to comply with a set of supply chain security standards.

To get started creating an auto-mated system, Goldberg suggests taking a fresh look at your business processes and documenting them if you haven't already done so. "This ensures a smooth transition, and that the implementation [will] meet your needs," he says.

The next step is to buy software that provides a complete and integrated platform of global supply chain solutions, including back office processes, CRM and e-commerce. Plan to invest anywhere from $99 per month (for a single user) to $499 per month plus $99 per user for more advanced versions. Growing businesses typically purchase implementation services as well--consulting to help set up the systems--which range from $5,000 to $10,000, says Goldberg. SAP Solutions for Small Business and UPS TradeAbility both offer a range of automation services.

Allow time to fully automate and integrate your product application. The amount of time it takes will depend on how well you map out your processes. The more you standardize aspects of your business, such as pricing, the format for sending quotes and invoicing, the faster the process will go.

For more information, see the report "Innovators in Supply Chain Security" at nam.org. Go to "Media Center" under "Communications and Media," then click on "Studies and Reports About Manufacturing."

This story appears in the October 2007 issue of Entrepreneur. Subscribe »