Direct business benefits by improving Supplier Integration

Getting products to the market faster has never been so important. Receiving accurate information from the suppliers faster is the first step to achieving that objective. Supplier integration is a model for improving the link of the supply chain between manufacturers and their tier of suppliers of materials for their products. Cooperating, both parties sharing information are able to exercise judgment on costs, quantities and timing of deliveries in order to rationalize the product flow and to move to a collaborative relationship.

Supplier integration should onboard suppliers quickly and efficiently so that the flow of business with them is smooth and error free. This requires a good B2B integration platform, and easily monitoring the processes involved, such as inbound logistics, procure-to-pay etc.

You ought to consider seriously re-assessing your B2B infrastructure if you identify with any of the following:

You are Encountering one of the following pains
VP Supply Chain •       Out-of-stock situations with financial consequences

•       High-level of safety stocks blocking capital and reducing flexibility

•       Inability to measure supplier performance against SLAs

VP B2B Operations •       High cost to maintain existing EDI infrastructure

•       Connecting to new suppliers takes too long

•       Inability to manage multiple redundant systems with existing resources

VP Inbound Logistics •       Inability to track the full procure-to-pay process

•       Often in firefighting mode due to late reaction to exceptions.

•       Relations with suppliers often in ‘blaming’ mode without facts & figures.

•       Recovery from lost orders is too long

ERP application owner •       Lack of analytics on order lead-times deviations

•       Inability to provide analytics on the procure-to-pay process

EDI or IT Director/Manager •       Not meeting business requirements due to outdated EDI platform features and functionality

•       Lack of visibility into business process breakdowns

•       High resource costs due to cumbersome methods for remediating transaction issues

If these issues are not remedied, the impact on your organization can be considerable:

  • Financial costs and availability of cash flow
  • Loss of industrial flexibility
  • Assembly line halt
  • Regular out of stock situations that could have been prevented.
  • Deterioration in relations with suppliers being without facts & figures.
  • Low visibility on supplier performance.

A 2016 Capgemini survey observed that in five years:

  • More processes with suppliers will be automated than today (95%)
  • Organizations will receive more real-time status updates from across the entire supply chain than today (94%)
  • Organizations will use more data analytics to benchmark and evaluate our supplier’s performance than today (92%)

You should consider the following capabilities when looking for a solution:

  • When you need to identify what is causing delays in the supply process: A solution that provides a web link to a dashboard with a view of the value and volume at risk including a real-time view of potential deviations that might affect your manufacturing resource planning.
  • When an order or its acknowledgement is lost somewhere in the procure-to-pay process, this can create unexpected delays in delivery: Before the crisis situation occurs, negatively impacting operations, the solution should provide notification of the critical issue(s), allowing your teams to take the appropriate corrective measures?
  • If you have an inefficient legacy B2B environments running on disparate systems : A solution that could simplify and consolidate your B2B environments while also adding the ability to monitor, report and audit systems to better meet SLA commitments.

Gartner has reported that those who have implemented visibility on their supply chain processes, have obtained a clear and positive impact on their business:

  • Inventory savings of up to 20% of value
  • Increased forecast accuracy of about 25%
  • Improved SLAs to consistent 98% levels
  • Decrease of inventory on stock from just over 10 days to fewer than seven days

 

 


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