Disruption has become a new normal. Misalignment and disconnections in business can cause amplified problems in a disruptive environment. Few organizations are immune to the effects, which are acutely felt in supply chains — and the more complex they are, the greater the probability of interruptions. Supplier problems will cause a cascade of problems up and down the value stream, leading to supply order delays that cause inventory shortages, production disruptions, missed shipments and lost revenue.
Experts from North Carolina State University and GEP conducted a survey on supply chain, procurement and IT leaders to determine their challenges and priorities, focusing on examining gaps in the supply chain. The study found that these leaders considered the largest gap to be between supply chain and procurement, citing it as a major issue. Such a gap is problematic, as it could lead to higher costs, longer cycle times and less resilience. Furthermore, in a disruptive environment, issues that arise from this misalignment, or disconnect, are exacerbated and amplified.
To be able to predict and respond to these disruptions quickly and mend the gaps, organizations must prioritize collaboration so their supply chains will bend rather than break.
Collaboration is Key
Supply chain collaboration is essential to mitigating the risks that come from exposure to disruption. Supply chains can be inherently complex, involving a multitude of suppliers, providers and enterprises that often operate independently while the supply chains themselves remain fragmented, with no shared visibility.
Organizations need to consider several factors for collaboration to be effective. The solution needs to enable real-time visibility and collaboration across your supply chain to meet demand and ensure the accuracy of quality, quantity and timeliness of supply — all to further a more resilient supply chain. Furthermore, it should leverage advanced AI and analytics combined with a configurable platform to ensure tight communication, information sharing and continuously improved collaboration with multiple tiers of suppliers, logistics providers and partners. A best-in-class solution must also support your workflows and a full range of processes including purchase orders, forecasting, capacity and inventory collaboration as well as quality management and coordination around supply risk.
Establishing real-time shared visibility and processes with supply chain partners facilitates identification and resolution of issues. This is accomplished through a unified platform that uses a holistic framework that provides visibility, intelligence and collaboration to optimize complex workflows.
Consider a purchase order (PO) function done outside of a unified platform: A buyer may send a PO to a supplier, but without being able to share visibility of updated order status, change order activities and logistics and payment information in a managed, guided process between multienterprise parties, neither will have a window into what’s happening on the ground. This will almost surely lead to high cycle times in fulfilling orders, the inability for both to production plan, inventory shortages or delivery disruptions caused by delays, and/or high inventory safety stocks and costs due to poor supply order management. In a disruptive environment, these issues are further amplified, affecting resiliency.
Given the potential issues that may arise, a holistic, unified platform should feature the following characteristics:
- 360 Degree Collaboration – The system should provide multidimensional visibility and collaboration across the supply chain, including specialized and integrated capabilities for purchase orders, forecasting, capacity, inventory, cost management and quality collaboration. This type of holistic collaboration provides the structure for outcome-driven multienterprise collaboration and builds a solid foundation for supply chain resilience.
- Configurable Workflows — Order workflows should be highly configurable and have the ability to adapt processes quickly and easily.
- Dynamic Exception Management — There should be a robust and customizable dashboard that provides visibility into order status and KPIs, with smart alerts that flag exceptions. The user should also have easy access to related attachments and reference documents.
- Multitier Collaboration — The platform should establish a central point of collaboration and visibility with suppliers across tiers, providing a view into supply chain network health. In addition, it must be able to understand and track supplier orders and manufacturing progress including VMI and BOM collaboration.
- In-Context Messaging Capability Messenger App — The platform couples the freeform communication with the underlying supply chain records, such as order numbers, shipment IDs, inventory numbers, etc. Thus, communication between parties can be flexible yet fact-based, promoting collaboration and improving efficiency, which saves both time and money.
Relative to the PO function, the benefits from such a system are clear: higher perfect order rates, fill rates and on-time deliveries as well as lower inventory and inventory-carrying costs and reduced lead time in fulfilling supply orders.
With such a software tool in place that provides visibility and facilitates collaboration, enterprises can work with multiple tiers of suppliers to specify requirements and ensure they meet them. In addition, organizations will respond to disruptions with greater agility without the disconnect between supply chain and procurement operations. Furthermore, they can make accurate forecasts and capacity plans that incorporate real-time data and suppliers’ input, coordinate responses with supply chain partners, create a single source of truth to serve as a foundation for decision-making, and develop and foster relationships with suppliers.
Alex Zhong is Director of Product Marketing at GEP. Alex has more than 20 years of practical experience in supply chain operations and has advised many Fortune 500 companies on their digital transformation. At GEP, he leads product marketing for the company’s AI-enabled supply chain solutions. He is passionate about the role technologies play in driving supply chain excellence and business growth.
