Supply chains of the 21st century are incredibly complex, cross-functional and global. The term “seamless” is increasingly being used to illustrate the ideal supply chain state, one that delivers a superior customer experience consistently, while maintaining profitability. Being able to deliver a product from one end of the supply chain to the other, while ensuring that the customer receives his order and any supply chain disruptions are “masked,” is essential in creating that “seamless” experience. However, to accomplish this, a company needs a complete view of the supply chain, ideally with synchronization of information and processes across all areas. This requires collaboration, both internally and across the enterprise.
Fundamentally, creating a seamless experience should be easy, right? Understanding consumer demand, leveraging data, planning and replenishment is nothing new. Internet accessibility continues to shrink our world, enabling near real-time communication across the supply chain grid. One key barrier that companies continue to face is that of collaboration; it is hindered not by technology, but by a lack of aggressive movement toward sharing information for the common good.
Despite some resistance by trading partners to fully embrace collaboration, we have seen that greater levels of information sharing can drive more value and support more proactive decision making. Collaboration not only enables visibility across the enterprise, but it is also provides the data you need to manage and track inventory across many points of distribution and many potential selling locations. Both B2B and B2C organizations can benefit from collaboration.
When done properly, collaborating across the supply chain grid can actually absorb fluctuations or disruptions caused by what is being referred to as SNEW: social media, news, events and weather. While SNEW data can yield tremendous insights, each one can also potentially disrupt or delay movement of product across the supply chain, negatively impacting the customer experience. One way collaboration can drive value is by enabling product localization. With access to more consumer insights, companies can determine the right amount of product to put in the right locations, helping to improve service levels and customer loyalty, a critical success factor in our omni-channel world. These processes deliver the largest impact when operated in a collaborative environment.
When looking at driving value and developing a seamless supply chain, collaboration among trading partners is critical. By working together, retailers, suppliers and trading partners can achieve many benefits such as reducing carrying costs and inventory levels, increasing turns, and eliminating out-of-stocks. Just the possibility of achieving a 5 percent inventory reduction at a retailer, or a 5 percent increase in turns at a supplier, creates a compelling argument for trading partners to work more closely together. Manufacturers can also gain an improved ability to monitor raw materials and equipment needed to produce their goods. Third-party logistics providers can benefit by not only improved product movement and location awareness, but also the ability to effectively change distribution efforts as needed. Additionally, all parties are motivated by a strong intersection of interests — creating the most optimal experience for the customer. As companies commit to greater levels of collaboration, the reciprocal value is maximized, providing companies with the insights and ability to respond more quickly to opportunities or threats in their specific markets at the point where the sale is taking place.
At the highest, and most ideal, level of collaboration, data from the point of consumption is the place to start. This data is then used to plan inventory needs upstream, flowing to retail or supplier distribution centers and then up to the factory. With this level of insight, a manufacturer can better manage its inventory from its plants to the retail stores, or in B2B scenarios, to its customer — be it end consumer, distributor or warehouse. Without any gaps in information flow, the end-to-end supply chain becomes very responsive — ensuring that there aren’t any disruptions or delays that could potentially impact the customer.
Today’s customers expect a seamless purchasing experience. Whether in-store, online or through another channel, customers want to be able to order product when, where and how they want, and they expect their needs to be met. Embracing a collaborative approach is essential to ensuring that your customers, regardless of vertical or business, receive their orders quickly and profitably. Collaboration is not a goal, it is a journey — so take the first steps now to share and benefit!