Mhlnews 4422 Btob 1
Mhlnews 4422 Btob 1
Mhlnews 4422 Btob 1
Mhlnews 4422 Btob 1
Mhlnews 4422 Btob 1

Using Business to Business Electronic Integration to Cut Supply Chain Costs

April 15, 2016
A new survey showed that 94% saw significant improvement in their electronic connectivity capabilities and 68% reported that their clients said they were easier to do business with after using cloud-based B2Bi managed services.

Organizations are investing in B2Bi (business to business electronic integration) to cut costs and increase business flow efficiency, according to a new study.

Of those surveyed, 94% saw significant improvement in their electronic connectivity capabilities and 68% reported that their clients said they were easier to do business with after using cloud-based B2Bi managed services.

The survey of over 200 organizations, conducted by the University of Tennessee, Knoxville, Global Supply Chain Institute and DiCentral, looked at supply chains from a range of industries asked respondents to weigh in on issues such as inventory visibility, supply chain costs, new enterprise resource planning integration, responsiveness to customer demands and more.  

Another major finding suggests that the opportunities for streamlining processes offset the resources to achieve it, as increased pressures on internal IT departments to meet core business objectives can lead to potential gaps in knowledge and technology. 

Ninety-six percent of those surveyed said they are linked electronically in some way with at least one of their trading partners, yet the average organization spends just over 5% of its IT budget on electronic connections. Electronic connections are expected to increase more than 20% over the next three years, and 69%t of those surveyed said that they intend to increase the number of customers they trade with electronically.

“Trading partner collaboration in the supply chain environment is essential in today’s hyper-competitive and technological business world,” said Thuy Mai, CEO of DiCentral.

The study presents several examples of successful collaborations that achieved impressive results. For instance, an office supplies retailer surveyed for the study invested time and technology to collaborate more effectively with a major supplier, and as a result, in-stock fill rates rose significantly—to nearly 99% from below 95%t.

Lead times reduced nearly 60%. Forecast accuracy improved by more than 30 percent, and inventory turnover increased 9%t.

Although B2Bi has been around for more than 30 years, many of those surveyed felt that considering the proliferation of the Internet of Things and cloud-based applications, it is still in an early stage—especially globally. Technology integration tools are widely implemented in some industries and sparse in others.