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Building an interconnected and resilient supply chain infrastructure

In a recent study conducted by IDC, almost 75% of Asia Pacific manufacturers see the lack of supply chain visibility and resiliency as the top gaps that will likely be problematic for supply chains if these are not addressed. To realize the value of Supply chain investment equally depends upon how the collaboration and visibility with vendor is managed. Most supply chain initiatives focus on the forecast planning, supply network capacity planning, and supply chain optimization initiatives. IDC report shows how linear supply chains are replaced by ecosystem of interconnect trading partners.

Building a resilient supply chain with interconnected trading partner, one needs to look for right network of unified platform. It not only breaks down the barriers of siloed systems but also opens opportunities for better ways to work together, enabling collaborative processes and connecting all trading partners. Collaboration via network not only helps in increasing the real-time information processing, but it also increases transparency of forecasts, supply availability, orders, shipment, while designing the collaborative platform following best practices can be followed.

 

  • Top-performing organizations communicate with suppliers through advance ship notifications, bar-coded information or even RFID-tagged pallets that allow for visibility of incoming products, which reduces physical labor needed to process inbound deliveries and helps to reduce dock-to-stock-cycle time.
  • Maintaining real-time visibility into price, delivery, quality, and service KPIs of supplier performance and communicate to the supplier regularly helps proactively identify and avoid supply chain disruptions. This can be achieved by having Planning and PO Collaboration, forecast and manufacturing visibility.
  • Don’t Just Track stock outs, but also its root cause and impact. Stock outs causes customers to delay purchase, substitute products, substitute provider, or don’t buy the item at all results in revenue loss and the biggest business disruptions.
  • Inventory Carrying Cost should be used in trade-off analysis, EOQ (Economic Order Quantity) & production lot decisions. On this trade off leverage MOQ (Minimum order Quantity) in the buying decisions. This helps to bring down the inventory carrying cost and visibility can be improved by integrating Planning and PO Collaboration forecast and manufacturing visibility.
  • Integrating network intelligence with the ability to apply business rules helps reducing inspection time, e.g., disallowing ASNs for items with unfulfilled inspection requests or open-quality notifications. It helps make sure that the parts and raw materials are of the correct quality or specifications before it enters the plant, protecting total quality of the finished goods.
  • Outsourcing to low cost and multiple countries requires a moderate to high level of organizational and technology maturity. Business Networks automate solutions that extend your ERP and back-office processes onto a single, cloud-based platform, allowing users to safely share information and insights with trading partners.
  • Collaboration design need to accommodate the real-time insight. Collaborate in real time, not just for structured data, but also for unstructured data, helps to respond against unpredictable events—like of weather delays, traffic strikes, etc.

 

SAP Business Network with SAP Ariba Supply chain collaboration helps to transform today’s fragmented supply chains into a unified, collaborative, intelligent network. The supply chain transforms towards resilience against global disruptions and maintain the flexibility to transform business models. Microsoft successfully built their supply chain collaboration in multi-tiered inventory strategies, their evolution to a build-to-order supply chain, and the significant inventory reductions helped them save 200 Million $.

 

Pic Credit – Pexels

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