Sun already is taking the One Touch program to the next level, with plans to let customers use its order-processing system to configure servers with the software before the products leave the manufacturer. Currently, servers come with only the operating system installed. Using a system scheduled to go live this month for a limited number of products, customers will access their orders through the Web and choose the software they want loaded onto their servers. That information is sent to the contract manufacturer, who installs the requested programs. In some cases, customers can even remotely access their ordered systems on a factory floor and conduct acceptance tests.
What's next? While Sun uses a portal today to share order information with its contract manufacturers, Worrall would like to tighten those links even further by merging Sun's and the manufacturers' order-processing operations into a single virtual system. "The industry is heading in this direction," the CIO says.
Worrall acknowledges that One Touch has raised customer expectations, both for Sun and for other IT vendors. And that's fine with him. "We've set the bar high, certainly for ourselves and perhaps for the industry."
A Special Touch
Sun Microsystems' One Touch Supply Chain program has shortened lead times and increased the predictability of the company's shipments to customers. Suppliers have online access to Sun's systems so they can run transactions as if they're a Sun facility. The IT vendor is shipping more than half its orders directly to customers from its finished goods suppliers and has seen predictability performance to customers jump from 85% to 95%.
Cost control is the primary business driver behind One Touch. Since implementation, savings have been realized, particularly in the areas of distribution spend and inventory holding costs. Last year, One Touch reduced inventory and warehouse costs by 19%. Logistics costs were cut by more than $20 million, or 20% compared with the previous two years. Finished goods inventory has been reduced by up to 40%.