Supply chain collaboration: key to thriving in the digital economy


Supply chains today are more global, more complex and riskier than ever. From natural disasters and economic volatility to human trafficking and geopolitical events, businesses are faced with a number of challenges on a daily basis that threaten their ability to successfully manage inventory.

As competition intensifies, companies are striving to attract and retain customers through the “perfect order” – that is delivering the right product to the right place, at the right time, in the right quantity. To do this, they need efficient ways to connect and collaborate with their suppliers across the entire process.

>See also: Can drones be taken seriously in the supply chain?

Advances in technology, such as business networks and the cloud-based applications underlying them, machine learning and the internet of things (IoT) are making this possible.

Connected businesses

Just like the social networks we use to manage people’s personal connections and activities, business networks provide a single place where companies can manage their trading relationships and activities.

An increasing number of companies are using them to collaborate on everything from orders, confirmations and scheduling agreement releases to advance ship and goods receipts notices, financing and invoices.

These business networks also provide insights and intelligence that companies can use to anticipate risk in their supply chains and act in more informed ways to mitigate it before disruptions occur. Many are beginning to use this data to drive a more predictive approach to inventory management.

Supply chain professionals therefore require solutions that help them assess supplier performance and quickly identify and respond to unplanned supply chain events to avoid shortages and damaging errors that may result in lost sales and market share.

>See also: Brexit: what are the supply chain implications?

There are plenty of point solutions that can address these issues, but most companies are looking to simplify their IT landscape and want a single platform that can connect all of their systems and stakeholders – both internal and external – and which allow them to collaborate in real time with multiple tiers of trading partners. This is where business networks and cloud-based applications come into play.

With just an internet connection, companies can connect to networks and, regardless of the backend systems they – or their suppliers – may be using, seamlessly collaborate in real time across the entire procurement process.

They can easily transfer data and activity between the network and their planning and execution systems through standard integrations, creating a more efficient, effective inventory management process.

The devil is in the data

Many firms are now using this data to drive a more predictive approach to inventory management. Stock outs are becoming a thing of the past as artificial intelligence (AI) powered bots mine historical transaction data to identify items that need to be ordered and, unless directed otherwise, automatically purchase them in line with company policies before supply gets low.

>See also: The benefits of graph databases in relation to supply chain transparency

Machines analysing billions of financial transactions alongside the historical and real-time purchasing data can now identify changes in buying patterns or pricing trends. Armed with this intelligence, buyers can more accurately plan, forecast and drive optimal business outcomes. Similarly, the IoT is revolutionising supply risk management.

The IoT is rife with a host of data that procurement can use to manage risk across the supply chain in completely new ways. Delivery vehicles, for instance, will be connected and monitored in real-time to proactively predict maintenance needs and prevent accidents or breakdowns – ensuring goods get where they need to be, when they need to be there.

While planning and optimisation tools have helped companies streamline internal operations, efforts at cross-enterprise supply chain collaboration have lagged behind. Manual collaboration limits visibility into suppliers’ capacity to meet demand requirements, causing uncertainty about the status of supply and shipments.

>See also: Internet of Things: a retail perspective

The knock-on effect of this is inaccurate data and poor enterprise resource planning, which drive up supply chain and operational costs and increase the risk of stock-outs. Point solutions fail to connect the internal and external systems that are required to drive the multi-party collaboration required for effective sourcing and order collaboration.

Supply chain professionals will increasingly realise that simply solving problems within the four walls of their own company is not enough. The world is increasingly becoming a digital network and success will lie in the ability to connect to the rest of the ecosystem to ensure customers are being served exceptionally well.


Sourced by Tony Harris, general manager, SAP Ariba


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Nick Ismail

Nick Ismail is a former editor for Information Age (from 2018 to 2022) before moving on to become Global Head of Brand Journalism at HCLTech. He has a particular interest in smart technologies, AI and...