'net gain

At a logistics seminar I attended a couple of years ago at the height of the Internet boom, an executive representing the automotive supplier exchange Covisint summed up the developers' vision for a completely interconnected supply chain this way: "When a customer in the showroom orders leather seats in a Cadillac," he said, "I want the cow in the field to shiver."

Though the ability to capture and manage information has come a long way, we're still far from that goal of complete supply chain connectivity. The evolution of logistics exchanges is a case in point. Three or four years ago, startups offering an array of online se rvices were publicly predicting an end to the old ways of purchasing logistics and distribution services. But that hasn't happened. As Ken Ackerman, one of the sages of our business, observed last month in these pages, despite all the technology, distribution is still fundamentally a matter of managing time and space. Or as another observer, an IT specialist for UPS, noted a few years ago, after you move the bytes, you still have to move the boxes. Unfortunately, despite their dazzling IT expertise, many Internet startups had scant understanding of how the distribution system functioned.

In this issue, we update the state of Web-based logistics services in a report by contributing editor Helen Atkinson. Those services have not yet quite remade the world,the article reports. In fact, the first rush of euphoria was followed by a rash of failures. But today, the survivors—those with the better business plans - are starting to deliver on many of those earlier promises.

How quickly will businesses adopt these services? Many have already done so, of course, but others—particularly those burned by failed providers in the past—have been somewhat reluctant to move forward. Another obstacle has been the problem of connecting disparate systems, which has yet to be fully resolved. Nonetheless, for many businesses, the potential returns these online services can offer in inventory management, customer satisfaction and velocity make them worth a second and careful look.