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The Information Superhighway: What Does It Mean For Purchasing?

Author(s):

Charles A. Belisle
Charles A. Belisle, Manager, Contract Administration, Microelectronics and Computer Technology Corporation (MCC), Austin, TX 78759 (512) 338-3597 or belisle@mcc.com.

80th Annual International Conference Proceedings - 1995 - Anaheim, California

ABSTRACT. We are at the threshold of a major technological breakthrough that will revolutionize the way purchasing professionals do business. This breakthrough is commonly referred to as the Information Superhighway, or the Digital Revolution, but is more properly, and more expressively, known as the National Information Infrastructure (NII). This paper addresses the origin and characteristic of the NII and the services currently available, describes the implications for today's purchasing manager, and provides some incentive to keep the PM from becoming overwhelmed by the technology -- otherwise identified as becoming "road kill" on the Information Superhighway! Some examples of actual NII networks are presented.

INTRODUCTION. Most Purchasing Managers I know own several bookcases and have them loaded with catalogues and directories, and they subscribe to more periodicals than they could read in a lifetime. All this, in hopes that they will have the right reference on hand, when the boss comes in with his regular, albeit impossible, emergency. Yet, despite these bookcases, PMs have historically been stymied in their jobs by the lack of complete, accurate, timely, and usable information.

Once they have found a source, the fun really begins. Time is spent on the phone determining availability, price, and terms and conditions. More often than not, the supplier will require a credit check, or require COD terms. This takes more time, and time is the PMs most precious commodity. The situation wouldn't be so disheartening if the time expended were somehow related to the price of a commodity.

The PM needs a source; a source for one stop shopping. A place where he or she can go to access hundreds of catalogs, find price, availability, and delivery information from any potential source, have terms and conditions predetermined, preapproved credit, and instant access to an ordering system. If this sounds too good to be true, read on! The Information Superhighway provides all these features and many, many more. It not only will make our job a great deal less tedious, it will permit us to focus on the important aspects of acquisition management: risk assessment, cost/benefit analysis, supplier relations, contract preparation and negotiation, agile manufacturing etc., etc.

THE INFORMATION SUPERHIGHWAY: THE EARLY DAYS. The backbone of today's Information Superhighway, the Internet, had its origins in 1969 when the Advanced Research Projects Agency (ARPA) developed the ARPANET, an electronic network that would enable an open, non-commercial dialogue between universities, major defense contractors, and government agencies. The concept of an open dialogue network caught on immediately, received sponsorship, additional funding and support from the National Science Foundation, and a name change to Internet, or just "the Net" as it is most commonly referred to today. Concurrently, personal computers became increasingly popular and increasingly common. Computer visionaries saw uses for the PC beyond the usual word processor and spreadsheet applications. They discovered that computers could be viewed as "information appliances", and used to access national news, stock market quotations, and library searches. All they needed to access these sources was a readily available network, and the Internet was instantly recognized as the perfect support system. It worked so well that it soon grew to encompass news groups, bulletin boards, and eventually electronic mail.

As the advantages of being on the Internet spread among the computer literate community, interest in being connected increased, and the membership criteria were relaxed, permitting access first, to non-defense related industries and later to commercial users. The Net became a focal point for educational, entertainment, information, and business activities. Subscribers could access a forum for any activity, and gather information, request advice, or provide help. Its communication capabilities were virtually limitless, and the Net quickly expanded to include the international community.

Despite the fact that the Internet originally prohibited any commercial activities, in recent years they abound on the net, and commercial users have become the fastest growing segment of an Internet population that boasts over 20 million users world wide, electronically participating in some 9,000 different discussion groups (focus groups), and more than 5,500 selected mail lists.

THE INFORMATION SUPERHIGHWAY: TODAY. President Clinton dedicated his administration's support to the Information Superhighway in the first of his Six Broad Initiatives for A Technology Policy for America, by citing the need to invest in a 21st century information infrastructure, and stating that "such a network could do for the productivity of individuals at their places of work and learning what the interstate highway of the 1950s did for the productivity of the nation's travel and distribution system. The analogy is most appropriate.

And just what is this Information Superhighway? To be sure, it is a high capacity communication network, but it is much much more. It is made up of such communications facilities as fiber optic networks, long distance and local telephone systems, cellular radio, cable, satellite, local area networks, paging systems, and microwave systems; it also includes innumerable resources like: data bases, software, movies, television, personal digital assistants, smart home appliances; electronic mail, video teleconferencing, voicegrams and videograms; on-line directories and "yellow pages," electronic catalogs and price lists, personalized advertising, consumer assessments and certification; brokerage systems for coupling buyers and sellers, remittance services, digital signatures, teachers, training courses, books and periodicals for learning to use all of this and, again, much more. This information infrastructure is integrated, intelligent, multi-media and secure. While some of these features seem like they may be years away, they are real, they are here, and most are being used.

To the select few that can surf the net, connection today provides access to a full service network that can find and deliver any form of data or any form of image. Need to find a recipe for Mom's Apple Pie, or Old Fashioned Egg Nog, read this morning's edition of Le Figaro, find a weather report for Point Barrow, check the Harvard University library for a thesis on using junk bonds for leveraged buyouts, or read hundreds of lawyer jokes, or the complete works of Arthur Conan Doyle? Any of these activities are readily accomplished, but they all require more than a basic knowledge of the Net. To be successful, a user need only know how to access the World Wide Web (WWW), the Wide Area Information Servers (WAIS); or which Gopher specializes in which particular academic, artistic, educational, foreign language, geographical, scientific, or governmental specialty.

Unfortunately, many users find themselves overwhelmed by the breadth and depth of these information sources, services, special interest groups, and other activities. They are completely overwhelmed by high tech's version of the Gordian knot created by the ever-present password systems, the innumerable potential places where the information may be hiding, the incomprehensible navigation procedures for finding a source, searching it, then moving from it to another; and perhaps most frightening of all -- the feeling of utter helplessness at being baffled by a little machine that can be operated from your lap. The only "Gopher" they recognize, or want to know, is an animal that lives in a burrow.

Tragically, they have a point. The proliferation of data bases, each developed by different computer wizards, have different structures, unique access requirements, special search procedures, and specialize on very focused data sets. Finding the right data base is difficult in itself, but once found, the user will need to pour over "ReadMe" files in order to learn how to access, query, retrieve, sort, select, save, and print useful data. To a librarian, these tasks may present an interesting challenge, but to a buyer looking for help finding the "impossible" part, it is just another obstacle on a very frustrating path. Fortunately, help is on the way.

Business Week recently reported: "This very public and amorphous collection of computer networks exploded as the techno-fad of the decade.... But did you know that the Internet is getting easier to use? Just turn on, dial in, and see for yourself. Boot up a program called Mosaic.... It's a collection of 7,000-plus independently owned computers that work together as one in an Internet service called the World Wide Web (WWW). Mosaic is the graphical browser, developed by the National Center for Supercomputer Applications, that has been hailed as the world's standard interface to electronic information.

THE INFORMATION SUPERHIGHWAY: USER FRIENDLY? Federal and State Governments have cooperated to improve the US competitive position in the international market. Several major initiatives have been launched aimed directly at increasing manufacturing efficiency and effectiveness. These initiatives target enhancing technology transfer, integrating new technology in products, supporting the manufacturing effort and getting products to market quickly. They are aimed at fostering Agile Manufacturing, Virtual Products, Virtual Corporations, and Electronic Commerce.

Agile or Flexible Manufacturing, (defined by the National Center for Manufacturing Sciences as the ability to respond rapidly to customer driven business requirements with minimal or no additional expenditure of resources), is how Virtual Products (those that are "produced instantaneously and customized in response to customer demand) are produced, by Virtual Corporations. Virtual Corporations are characterized by the ability to quickly create temporary, opportunistic, partnerships, and foster a climate of cooperation between suppliers, competitors and customers. A Virtual Corporation can be made up of any number of partner companies, each providing some critical piece of the end product (their core competence), each willing to share trade secrets, and each ready to provide their companies unlimited support, in an effort to design, manufacture, and bring the product to market. The partner companies could be and usually are separated geographically, and the key to their uniting in the cooperative effort is dependent on the electronic networks. The members need to be able to communicate quickly, across the company, the country, and sometimes internationally, to share designs, discuss issues, and in effect, all types of business information.

Now, what about Electronic Commerce (EC)? Well, EC is what enables Virtual Corporations to produce Virtual Products through Agile Manufacturing! Specifically, it provides the end-to-end digital exchange of ALL information needed to conduct business. To do this, an EC system must provide as a minimum: secure electronic mail, graphical interfaces, Electronic Data Interchange (EDI), access to Value Added Networks, intelligent gateway processor software, open architecture based on client-server model using micros, minis and mainframes, with a flexible user interface. The "standards" contained in this list of capabilities are what make the system user friendly, and they are part of a 1988 Department of Defense policy mandating that 80% of DOD interface industry through EDI and EC by the end of 1994.

In addition to the enhancements being developed in response to Government pressure, helpful hints abound. Publications such as Network World, provide a series of Internet tips with increasing regularity.

THE INFORMATION SUPERHIGHWAY. Some Examples are presented here as a sample of the many commercial and government funded efforts to provide a true user friendly multi-media network.

AMII. In January 1994 ARPA funded an effort to develop and implement an Agile Manufacturing Information Infrastructure (AMII) as the first step toward a national information infrastructure for manufacturing. It will provide such services as network security and directories, distributed design tools, concurrent design services, and distributed parts catalogs. In the words of William Kessler, Director, Manufacturing Technology Directorate, Wright Laboratory, "The AMII will enable the rapid deployment of these vital technologies, and help accelerate their adoption into the nation's military and commercial manufacturing base.

TechNet is an effort, partially funded by the National Institute of Standards and Technology (NIST) under a Technology Reinvestment Program, and by commercial and academic partners. This project is sometimes referred to as Mosaic (Manufacturing Outreach System for Achieving International Competitiveness is not to be confused with the browser referenced in the Business Week quotation above) is an intelligent agent that can search for information for you. The project brings together commercially developed technology and the existing Tufts University network, TechNet, and seeks to eventually provide a service that will permit users to sign-on with a single password, maneuver through the net using common English, access directories, "yellow pages", and the index of selected catalogs, view the contents of catalogs including and photos or drawings, find price and availability information, transfer to EDI to place an order; select a WAIS system and search the thousands of databases that exist on the Internet.

TEXAS-ONE (Texas Open Network Enterprise) is an effort aimed at establishing an electronic communication infrastructure within the State of Texas. This partnership under the leadership of the Texas Department of Commerce other Texas State agencies, NIST, and several commercial entities together, to network a system of regional Texas Manufacturing Assistance Centers, and provide a wide range of manufacturing information and technology extension services to approximately 400,000 businesses in the state. It will also be used to access commercial, defense, academic, and state government installations. By relying on EC and Internet standards, TEXAS-ONE will unify applications and users, move data faster, and enable financial transactions on an electronic network, in a secure environment. The intent is to link all State agencies, all businesses within the State, and provide user friendly access to anyone, anywhere seeking information about Texas, businesses operating within the State, and products and services available. It is expected that TEXAS-ONE will serve as a model that can be replicated for all 50 states.

Sprintlink PLUS is an exclusively commercial effort by Sprint that allows personal computer users to easily create virtual private data networks with their suppliers and development partners. It lets collaborative engineering and design run over the Internet, in addition to providing the standard suite of directory, security and other value added services on UNIX workstations, PCs and Macintosh computers.

The common ingredient in all of these examples is an MCC developed technology known as the Enterprise Integration Network (EINet) which is the communication infrastructure that helps users locate information, similar to the Mosaic browser, but also creates a secure environment for conducting transactions, and provides advanced electronic messaging capability.

THE INFORMATION SUPERHIGHWAY. The Next Steps involve the addition of interactive video, 3-D video, Virtual Reality, interactive CAD, CAE, and CAM applications to the existing suite of features. At the moment the limitation is bandwidth. But the communications carriers are working at breakneck speed to provide the capability to roll real time video capability on top of the search, and retrieve, and mail/ message handling features already discussed. Several different technologies are being investigated, but video telecommunication (compressed video) is available today over separate networks, and integration is just around the corner. Motivation for an early solution to this problem comes from the desire of the movie moguls merging with the telecommunication providers to provide "entertainment on demand" over the Net. Putting this service on line means bandwidth will be made available, and we will have optical fiber connections wherever we go.

IMPLICATIONS FOR PURCHASING MANAGERS. When five computer industry leaders were asked by Upside magazine: What technological advancement will have the biggest impact on business and home? -- their answers -- the Internet, electronic commerce, video on demand, the Information Superhighway, and networking -- were essentially identical. One of the five, Gordon Bell, (who led the development of Digital Equipment Corps VAX computers) was most expressive in stating that the Internet would "restructure buyer-seller relationships.

With the impending successful implementation of the programs described above, and the many other similar efforts currently undergoing validation testing, a purchasing manager will be the recipient of two immediate benefits:

First, and most obvious, a purchasing agent will be able to use the Net to look up items and services through an elec- tronic catalog of worldwide suppliers, view items for purchase via an electronically submitted photograph or a video demon- stration of the item in operation, order and pay for parts on line -- all through the click of a mouse on the buyer's desk; and

Second, a less obvious but a more far reaching result is that the PM will be free to take on those tasks that provide far more organizational impact. The tasks that relate di- rectly to the importance the country's manufacturing archi- tects place upon Agile Manufacturing, and the realization that it is a key to the reassertion of US dominance of the world market. Agile Manufacturing is dependent for its success upon supplier relations, negotiation, partnership formation, con- tract administration, and acquisition management; the skill set of an accomplished professional Purchasing Manager. It places the PM in a position to use his or her skills to cor- roborate the assertion that Purchasing is a profession.

CONCLUSION. The Information Superhighway is revolutionizing the way we live our lives. It will bring the world to our homes and our offices -- in living color. The astute purchasing professional will clearly recognize the implications of being Internet proficient. It is not only a better way to get the job done, but it could be the key for our personal, professional, corporate, business, and national survival. If getting off the access road and onto the Highway sounds important, if it sounds like something you need to do now; that's because...IT IS...!


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