If you want to minimize supplier risk and maximize end-to-end supply chain efficiencies, you must first understand how to make the right technology connections.
When you think about supplier relationship management, do you think about how many phone calls, emails or other “communications” it takes to coordinate every last transaction to a tee? Or, do you consider the deeper scope of supplier management: the behind-the-scenes coordination it takes to onboard and collaborate with a single supplier? Technically, you should be focused on both, if you want to minimize the IT and administrative burdens of managing both high and low volume suppliers.
IDC predicts that, “by 2020, 80% of supply chain interactions will happen across cloud-based commerce networks, dramatically improving participants’ resiliency and reducing the impact of supply disruptions by up to one-third.” They also noted that “manufacturers are looking to digital platforms as the underpinnings for collaboration and coordination processes, bringing together the essential technology components for the benefit of cloud-based ecosystems — including employees, customers, suppliers, and partners.”
However, if you are like most organizations, the mismanagement of supplier management activities is probably costing you a lot of money and wasted labor right now. It may even be increasing the risk of quality issues and material delays, both of which increase the risk of reputation issues for your organization.
- Your IT group has to manage each connection to each supplier’s supported B2B technology, which means every new supplier that is on-boarded is a new format that must be mapped. This process can take from weeks to months—just for one supplier.
- Your IT group must then setup and maintain a new communication protocol for each supplier. As your supplier pool grows, so does the burden on IT.
- Even worse, suppliers that do not support B2B communications have to be managed manually through phone or email from the functional side of the business. That leads to a lot of miscommunication and missed communications.
Here’s the thing: You wouldn’t send the same email 80 different times to 80 different people when you could just create a group email and send it at once. So, why map to 80 different supplier profiles when you could simply map once (via an orchestration platform) and connect to 80 different supplier interfaces?
That is precisely why, in a perfect world, every supply chain would have an orchestration platform in place that provides the following capabilities from both an IT and administrative perspective:
- Multiple integration options to directly connect your business systems with your external suppliers;
- A workflow and messaging engine that can map to your existing business processes; and
- An end-to-end visibility and collaboration portal that enables all internal and external stakeholders to stay in step with your business in real time, in one place.
Not only would this orchestration platform serve as an “ERP orchestration engine” on the back-end, but it would be the workflow and messaging engine that your team needs to communicate with trading partners. This orchestration platform would facilitate “information exchange and processes, at scale, simplifying connectivity and ensuring a level of security and trusted business interactions. It would also “be anchored by an open architecture and open access and, in many cases, by an open marketplace to support monetizable information flows and new revenue opportunities.” In other words, it would meet the mission-essential criteria that IDC has defined for “cloud-based commerce networks” and give you the tools needed to dramatically increase supply chain “participants’ resiliency” and reduce “the impact of supply disruptions by up to one-third” per IDC’s predictions.
Everyone from procurement to logistics and even accounts payable would be able to communicate with suppliers without having to pick up the phone, or send an email, at all. They simply login to the collaboration portal from any device to send either a mass communication or individual message to the appropriate party. Quality issues can be resolved immediately, if not completely averted. Responsiveness to shifting market demands will increase. And, IT resources will be more efficiently utilized. In short, everyone in your supply chain will be able to focus on more strategic tasks once the burdensome process of manually onboarding and managing supplier relationships is removed from the equation.
Just be sure that the orchestration platform you select enables you to:
- Maintain a direct connection to both high volume suppliers via their B2B system and low volume suppliers via one login/portal. The key is making sure that your IT team isn’t the one that will have to maintain that connection. All they should have to do is map to the orchestration platform’s portal one time. Then the platform provider should be willing and able to manage the supplier on-boarding process. That is how your IT team regains valuable time.
- Configure each workflow to match your current business processes, down to an individual message flow between you and your suppliers. Just be sure you can define which workflows to automate—and when. This will minimize disruption of refined supplier processes and maximize the advantages of a manage-by-exception flow.
Ready to simplify your supplier management processes? See how the OneSCM Supply Chain Orchestration Platform can ease both your IT and administrative burden immediately upon deployment.