The Future of Supplier Collaboration: New Players, New Opportunities
A guide to understanding the expanding company types connecting through SAP Business Network
This article is meant for leaders in procurement, supply chain, logistics and asset management to understand the emerging importance of business networks and identify the expanded types of companies that they can collaborate with on SAP Business Network.
The same can be said about business networks: as their use becomes increasingly critical to today’s B2B e-commerce, the companies that compose them play specific roles – often more than one – that require accurate definitions. When we at SAP expanded the network beyond simply collaborating with materials and services suppliers, we’ve expanded the types of companies that can connect through the network to include logistics providers, carriers, and equipment manufacturers. This post will help you gain an understanding of the various types of trading partners who collaborate through SAP Business Network.
Defining business networks
As a relatively new technology, we get asked a lot “What is a business network?” We are not referring to your social network of colleagues or contacts in your industry. We are referring to technology platforms. Gartner refers to business networks as “Multi-Enterprise Supply Chain Business Networks” that “support a community of trading partners that need to work and communicate/collaborate on business processes that extend across multiple enterprises, with an end-to-end / shared focus.” IDC defines the same term as “any platform that facilitates the exchange of information and/or transactions among disparate parties pertaining to the supply chain or to supply chain processes”. We define SAP Business Network as a B2B collaboration platform where trading partners exchange information and data for seamless collaboration. “Trading partner” is used here as the broad term given to companies involved in any form of trade, and by extension to any company transacting on SAP Business Network. In other words, it is our basic, original stick figure. These trading partners then need to become more distinct as we delve into the specific business processes.
Procurement & Supply Chain
Asset collaboration on SAP Business Network enables original equipment manufacturers (OEMs), component suppliers, asset owners, operators, and services providers to leverage a common asset data foundation for collaborative workflows to commission, maintain and upgrade equipment. These critical members of the asset lifecycle ecosystem come together on the network to maximize asset effectiveness and customer satisfaction. If we were to place these roles on the typical buy-sell model, manufacturers, whether they are component suppliers or OEMs, would be part of the big supplier family. Meanwhile, owners purchasing the assets and operators using the equipment are part of the buyer side of the network.
When it comes time to move goods from one place to another, shippers, carriers, and logistics service providers collaborate on the network much like buyers and suppliers. Shippers need to send goods by land, sea, or air, while the carriers and logistics services providers support, coordinate, and execute the conveyance of said goods. This intercompany collaboration is a great illustration of the interconnection of trading partners in a business network. Consider this: typically, shippers are suppliers looking to transport their products to customers. These customers could be B2B buyers on the network, end consumers, or even intercompany locations for stock transfer. To perform the shipping, the shipper might use carriers or logistics services providers, who are – from a procurement perspective – suppliers to the shipper. In short, these suppliers supply transportation services to the suppliers who need to deliver products to their customers. And surely enough, these customers are themselves suppliers to others on the network! Yes, it gets a little confusing, but it only mirrors reality, and shows how business networks facilitate a truly interconnected supply chain with synergies throughout.
A category to highlight is finance. The introduction of Taulia adds this new angle to SAP Business Network, that can now also support the liquidity and cash flow needs of both buyers and suppliers. Solutions such as dynamic discounting and supply chain financing allow for suppliers to get paid early on outstanding customer invoices, which helps companies overcome gaps in cash flow and creates more visibility and predictability in collections. In turn these solutions provide buyers with working capital benefits and, importantly, can support and promote the financial health of a supply chain. In doing so, SAP Business Network welcomes a new party to the table: financial institutions. In this context, financial institutions can behave as an intermediary between suppliers and buyers to ensure that all parties remain financially resilient by offering a number of flexible financial offers to both buyers and their suppliers.
The global disruptions of the last few years have shown that effective supply chain collaboration needs to reach beyond your typical suppliers of goods and materials. Our decision to expand capabilities into logistics and asset management in 2022 was no coincidence. The ability to track goods, services, equipment, and their related documents has become a necessity for successful and trustworthy business collaboration. This requires a common, shared platform. Supply chains are complex, and manual methods of just keeping them running can no longer be the status quo. SAP Business Network makes complex supply chains more efficient and easier to manage by digitizing the collaboration and information exchange between the many types of trading partners.
Now, you may be wondering who has more to gain from choosing to operate on SAP Business Network? Buyers? Suppliers? For years, when acting mostly in the procurement realm, the value balanced more to the side of the buyer, as was pointed out by many critics. But today, as these roles intertwine and trading partners collaborate in multiple ways on one same network, the answer clearly has shifted: every company, regardless of their role, has something to gain from operating on SAP Business Network.
Learn more at sap.com/businessnetwork