Technology research firm Gartner, Inc. recently noted a new trend towards supply chain “protectionism,” presumably due to the extraordinary combination of external forces proving capable of disrupting once-optimized processes and, therefore, destroying once-healthy profit margins. Economic instability, an increase in competition and the globalization of sourcing partners have compelled manufacturers to seriously consider the viability of – or lack of – existing operational technologies and ultimately embrace a slew of new digital technologies that provide direct visibility into every aspect of their supply chain. This is especially relevant for manufacturers who are challenged to keep their head above water as new competition floods the marketplace and long-time competitors diversify their product lines in an attempt to remain relevant.
But just like every living thing needs air and water to survive, every manufacturer – and every one of their supply chain partners – needs a single source of data truth to survive the massive wave of change that’s hitting from all directions. In other words, they need a collaborative digital supply chain platform that can share and extract data between the ERP, WMS and other connected workflow-specific systems. A platform that can serve as a single point of access to all workflow-derived data so that manufacturers can orchestrate cross-departmental transactions with complete accuracy and facilitate a completely synchronized “decision network” between their internal stakeholders and suppliers.
Five Reasons Why You and Your Suppliers Need a Single Source of Data Truth.
- Unprecedented technology utilization across every aspect of our lives has forced manufacturers to innovate at record rates – and somehow manage to keep their high-volume production and supply chain operations moving at a comparable pace. Many are still operating via spreadsheets and/or disparate departmental-specific back-office systems, which is no easy feat (and really not feasible anymore). As both manufacturers and suppliers are learning, the data silos that exist in most supply chain environments today make it challenging to adapt to the constant churn of product lines and accommodate frequent product customization requests. A digital supply chain management solution becomes a necessity for companies unwilling to compromise customer satisfaction or lose control of their quality and performance levels.
- Product lifecycles continue to decline, even for products with longer lifespans, where components are being “upgraded” each year. That means materials sourcing, procurement, production, and shipping lead times are even shorter. Remember that economic instability I mentioned previously? And the use of technology in every aspect of our lives? Speed is expected in this digitally powered world, especially when it translates into greater financial stability. Therefore, manufacturers must find better ways to communicate with trading partners and coordinate every last logistical detail from purchasing to payment with complete precision. Especially if they want to execute in a just-in-time manufacturing business model. Again, spreadsheets are a no-go in this case as the data is typically outdated by the time it becomes available for evaluation. That causes choke points during shipping and receiving and can lead to overall quality issues. Even if there was an efficient way to input the data, extracting and analyzing it via spreadsheets or multiple systems will slow down every workflow and therefore the output of every interconnected business function. Thus, the demand for digital supply chain management increases.
- Then there’s the increase in mergers and acquisitions, which is one of the only ways many manufacturers have been able to stay competitive. This has led to the forced integration of disparate processes, systems and tools, which automatically causes limited end-to-end supply chain visibility and data latency issues. Without a single, digital supply chain management platform to bridge these “data silos”, the potential ROI of the M&A transaction can be tainted by excess inventory, poor customer service, and poor response capabilities to newly acquired customers’ demands.
- Don’t forget that supplier variability can complicate already complex logistics, even for the most mature supply chains. Or that cluttered marketplaces are contributing to greater demand volatility and, therefore, driving a greater need for more effective demand planning tools. Without complete visibility into every last piece of operational data available at that moment – or without access to completely accurate data sets – it will be impossible to make profit-driven decisions, execute more efficient business processes, or act fast on revenue-generating opportunities. The only way to achieve complete visibility and/or accuracy is through a digital supply chain management solution that can eliminate the data silos and bridge the gaps that have historically existed between supply chain organizations’ internal and external data “systems.”
- The future will be bleak for those incapable of achieving greater automation or employing predictive analytics tools due to continued disconnects between disparate data systems or, worse, an inability to effectively capture “clean” data in any system. In order to execute more aggressive technology roadmaps, and introduce more advanced digital tools such as augmented reality, predictive analysis, or blockchain, supply chains must invest in the right fundamental technology today.
So, what can and should you do right now? (Over the next 6 months.)
Invest in a supply chain management solution that provides a non-disruptive path to your mandated digital transformation. It doesn’t matter if you’re motivated by new compliance, efficiency or cost standards, or just trying to gain centralized oversight and control of all supply chain activities and supplier actions, look for a solution that (bottom line) enables you to…
- Source more strategically without exhausting resources – or suppliers;
- Take more efficient procurement actions that will subsequently accelerate production timelines;
- Achieve the precise level of supplier/inventory predictability needed to execute just-in-time manufacturing;
- Track and trace inventory, invoices and all information critical to creation of a supply chain “profit center” from one place, in real time;
- Simplify inbound materials management via automatic purchasing and receivables matching to mitigate shipment mistakes or mishandling;
- Alleviate the risk of costly data entry errors, reduce administrative overhead, and take advantage of early payment discounts;
- Anticipate new demands, act on revenue opportunities and react to fluctuating market conditions – harmoniously with your suppliers;
- Maintain accurate, real-time data transfers across multiple supply chain systems…via a single workflow, no matter how much data is coming in;
- Enjoy revenue gains and expenditure reductions all the way from purchasing to payment.
Think it’s impossible to find a single solution that does all of the above? Without requiring you to completely redesign your business processes or reconfigure your existing ERP and WMS systems?