Supplier Collaboration Has Resurfaced as a Strategic Business Priority
Last week, I had the opportunity to present in a webinar with a key SAP Ariba customer/design partner of our direct materials solutions and SAP Ariba’s go-to-market lead, Tony Harris, vice president of direct procurement solutions. It’s interesting to note that the more things change, the more they stay the same. Many years after startup companies launched the first business networks to help companies connect and collaborate, we’re seeing business trends today that demand companies take collaboration with suppliers to a whole new level.
Consider trends in online retailing and drop shipping fulfillment. Online retailing is a competitive necessity that’s often combined with a drop-shipping fulfillment model to achieve significant cost savings. But in order to manage, control and monitor drop-shipping of products to customers directly from manufacturers or wholesalers, retailers need to connect and collaborate in ways that are seamless to customers and highly efficient (for example, for rapid delivery of orders). This requires integration with disparate technologies used by trading and logistics partners so information can be accessed and shared in near real time across systems. Equally important, data exchanged must be truly clean and trusted by all parties. Accurate and clean order data, for example, is vital to achieving 100% perfect order rates and other KPI targets.
Globalization trends are also necessitating new levels of collaboration with suppliers. To cut costs, for example, companies are sourcing materials from low-cost suppliers around the world. And even small and midsize companies now do business globally (for example, via e-commerce sites) and must fulfill orders from customers in a timely manner. These trends have created new complexities, as businesses need to work efficiently with many more trading partners – and across more geographies, currencies, and time zones – worldwide.
Companies are also outsourcing manufacturing today. Industry analysts estimate that one-third of manufacturing is outsourced today. For example, high tech companies rarely manufacture their own products, and even auto manufacturers are outsourcing the sub-assembly of core vehicle components to accelerate production lines. But speed can’t be won at the expense of visibility into core assembly processes – including when sub-assemblies will be completed and delivered to plant floors. To maintain visibility into processes they no longer manage, companies need to connect systems and share real-time information.
And then there are key business initiatives like lean manufacturing that are also driving the need for new ways of working with suppliers. In the webinar, our customer guest speaker described in detail how a global ERP instance combined with Ariba Network enables seamless supplier collaboration for their lean manufacturing initiatives. This collaboration is vital to ensuring reliable supply of the right materials – and in the right amounts and with desired quality – to fulfill customer orders.
These are just a few examples in which deeper, more real-time supplier collaboration and transparency is fundamental to staying competitive in today’s marketplace – whether it’s by cutting costs, boosting business agility, or meeting customer demands for faster product delivery locally and globally.
In this webinar, our guest speaker, along with supply chain and IT leaders from a global crane and industrial manufacturer, addressed other aspects of deeper supplier collaboration – for example:
- How continuous business transformation efforts and their lean manufacturing implementation necessitates collaborating with suppliers on supply chain planning and execution – starting with forecasting all the way through invoicing. Are you able to support this level of collaboration?
- How supplier and supply chain collaboration solutions can help create a “bridge” between back-end ERP system and suppliers, providing a single face to suppliers and eliminating the need for costly, homegrown supplier portals. How would it help your business to have a bridge that enables real-time information sharing between you and your suppliers?
- The complementary roles of the ERP – first, as the single, trusted source of truth, and second, as a system updated with real-time commit information from suppliers. Are you able to share and access reliable order and forecast information from back-end systems to drive efficient collaboration?
To get the details on all this and more, check out a recording of this webinar today. Because supplier collaboration is no longer a “nice to have” – it’s mission critical to business today.