A variety of technologies platforms are enhancing the way electronics OEMs manage their increasingly complex supply chain, quickly becoming must haves for organizations of all sizes. Business to business electronic integration (B2Bi) platforms that support and enhance collaboration are joining supply chain management (SCM), risk management and others on that list, according to a new study.
“What we found through interviews and survey information there are significant benefits to using technology to connect customers and suppliers both on the supplier side and customer side,” Dr. Paul Dittmann, executive director of the Global Supply Chain Institute at the University of Tennessee told EBN in an interview. “It's definitely a win/win to enable collaboration. You would think that it would be ubiquitous but we didn't find that to be the case.”
In hopes of cutting costs and making business flow more smoothly, more organizations are investing in B2Bi but there's still plenty of room for improvement, the study titled Transform Your Supply Chain with Collaboration found.
“The benefits of collaboration aren't fully understood. There's this traditional mindset that goes back decades that relationships between supplier and customers need to be arms length,” said Dittmann. “The benefits of collaboration are numerous. Those that don't do it are at significant competitive disadvantage.”
Conducted by the University of Tennessee's Global Supply Chain Institute, in collaboration with B2B integration provider DiCentral, the survey tapped 200 organizations in a wide range of industries. The study looked at a variety of topics relating to collaboration such as inventory visibility, supply chain costs, ERP integration, responsiveness to customer demands, and more.
For those who were using B2Bi managed services, many saw measureable business benefit. “Things happen faster and more seamlessly with electronic collaboration and it take out a lot of errors,” Dittmann said. “Today, there is still a lot of lack of compliance due to errors in data and data transmission and penalties get assessed. That totally disrupts any attempt at collaboration. People are arguing about whose fault it was. We have to get beyond that and using technology is one way of doing that.”
The survey found that:
- Suppliers captured a 25% savings by processing orders electronically and 20% savings by processing invoices electronically, compared to manual processes;
- Suppliers processed invoices 4.5 days faster;
- 94% saw significant improvement in their electronic connectivity capabilities;
- 68% said that that clients found them easier to deal with than before; and,
- 69% said they could respond more quickly to changes in their clients' environments.
In fact, the study found, the benefits reached across the organization, offering benefits to both those buying products and those selling products. “Companies on the sell side are having to meet the requirements of their customers and they are being dictated to adhere to standards,” Peter Edlund, senior vice president of global product marketing at DiCentral told EBN in an interview. “In the study, not only did we find that this technology helped them be easier to do business with, but beyond that it helped customer service deal with more complex scenarios. If you can be more engaged with customers, ultimately you can do more business.”
As with any system upgrade, timing is everything. Organizations often find that adding this type of technology is most readily done as other systems are being upgraded. “There is inflection point. The CIO or CFO starts to look at this when they are implementing or upgrading system that impacts supply chain (such as TMS, ERP, or MRP),” said Edlund. “It's easier to get into this hewn the plumbing is exposed so to speak.”
When deciding to embark upon embarking upon B2Bi managed services, organizations should take a few steps to get prepared. “First, make sure internal processes are well defined,” Edlund said. “A lot of times they aren't.” Next, organizations should consider which external partners have the biggest impact on those internal trading processes. Finally, consider the complexity of the processes since highly complex processes will benefit most from automation. Measure all possible scenarios against financial return, Edlund added.
— Hailey Lynne McKeefry, Editor in Chief, EBN