In an age of global commerce, connectivity between buyers and suppliers that is enabled by technology will be a critical piece of the global business networks and supply chains that unify the world’s enterprises. In the short-term, the reason to enable suppliers is as simple as significantly lower transaction processing costs. In the medium-term, the opportunities move beyond these efficiencies to improving the communication, collaboration, and visibility between trading partners that ultimately improve agility. As we look into the future, the ability for participants to mine value from the information available on and from the network as well as the introduction of new services from the network providers and third-parties will be critical.
One large opportunity for some business networks today is the ability to extend their capabilities and support to include direct materials procurement. Earlier today, SAP Ariba announced the latest release of its “Ariba Collaborative Supply Chain” offering which promotes real-time collaboration for buyers and their direct material suppliers. This solution is a part of the larger Ariba Network and supports some planning and execution processes that enable procurement and supply chain teams to better manage their supply and streamline the supply chain.
In a session called “Using Supply Chain Collaboration to Drive Visibility into Supply” at AribaLIVE this past March, ULTA Beauty and VWR International each discussed how the Collaborative Supply Chain solution had impacted their supply chains. ULTA Beauty began to use the solution in support of its aggressive growth strategy that began in 2013. ULTA focused its efforts on the accounts payable process; they used the solution as an EDI replacement and reported positive results in the areas of receiving merchandise and in lead-time planning. ULTA also noted that their suppliers were able to improve their performance based upon better visibility, which translated into a better ability to consolidate shipments among other benefits. VWR International, a leading global, independent provider of products, services, and solutions to laboratory and production facilities, provided the supplier’s view of the solution and reported that its customers had gained better visibility into both inventory and deliveries and into overall logistics.
While SAP Ariba has developed its own network-based supply chain collaboration solution, Tradeshift has identified a series of technology partners to develop apps that build upon its core solutions and extend the overall supply chain capabilities (physical and financial) available on the Tradeshift platform. One example is Tradeshift’s partnership with supply chain management (“SCM”) solution provider, Quyntess, which has developed a series of apps focused on enabling collaboration on orders, shipping, and inventory management between buyers and their direct material suppliers.
As network-based, supply chain collaboration capabilities continue to develop and advance, procurement teams with direct material supply chains should begin to investigate what is available in the network market, particularly if they are currently using one on the indirect side of their business.