Tech Tips for Managing a Global Supply Chain

Jan. 7, 2010
Technology can help companies better collaborate with their trading partners. Here are several considerations regarding how technology can help companies connect, communicate and collaborate with their trading partners to uncover opportunities for improvement in managing their global supply chains

Organizations are working with an ever-changing array of partners that makes their trading ecosystem increasingly complicated. They struggle to comply with changing global business requirements, risks and regulations while still controlling costs in a difficult economy. With so much volatility facing supply chain managers, where can technology investments lessen the complexity? Can technology solutions also help support developing initiatives like global trade management and supply chain finance?

There’s no doubt that technology solutions can decrease complexity, helping companies overcome the issues they face with their trading partners. However, supply chain managers need to make smart investments in this area to find solutions that will best allow them to streamline their business processes most effectively.

Here are several considerations regarding how technology can help companies connect, communicate and collaborate with their trading partners to uncover opportunities for improvement in managing their global supply chains.

To build better connectivity with its trading partners, a company should:

Start with a solid integration foundation. Flexible integration solutions are the necessary building blocks to manage the ever-changing global supply chain by providing the required supply chain visibility to manage the process. With an integration backbone in place, supply chain applications can build upon the power of community connectivity to gain more effective control of business operations with real time information.

Embrace SOA. Service-oriented architecture (SOA) allows components to be exposed as services in a language-independent, platform-independent way to connect various applications. This allows the various enterprise solutions being used across the supply chain to communicate with one another, rather than each needing their own single architecture. Leveraging SOA will enable companies to break down barriers to simplify the connections within their global supply chain.

Once connected, consider these opportunities to communicate more effectively with all trading partners as a way to strengthen the supply chain:

Use B2B technology to quickly bring partners on-board. In today’s economy, the competitive advantage goes to the company that can bring more of its business partners on to its network quickly. Companies need to be able to offer a secure, real-time integration of processes and information regardless of the partner’s size or their existing capabilities. To make this a reality, the B2B solutions implemented need to help effectively integrate business partners and create a seamless flow of accurate real-time information from origin to destination across all the partners in the supply chain.

Help your business partners comply. It can be both expensive and inefficient to deal with non-compliant organizations. Though often thought to be those small to mid-sized organizations who are constrained by limited technical skills, outdated technology or budgetary restrictions, in this economy any organization can face these constraints. It may seem outdated in today’s electronic age, but simple EDI-to-fax and webform solutions can be extremely beneficial in working with these suppliers.

Once the trading partner has been optimized, a company can transform its global supply chain through collaborative processes:

Look for solutions at the business process level. While a value-added network (VAN) delivers information from one point to another, a business process network (BPN) provides real time visibility into that information, regardless of where it is in the network. Rather than just viewing an individual transaction, the supply chain manager can monitor the entire process (such as procure-to-pay or order-to-cash) to collaborate better with suppliers and customers relations.

Embrace end-to-end process coordination. Extending the benefits of SOA mentioned above, companies can leverage SOA to support end-to-end processes. An end-to-end process spans traditional functional and application boundaries, such as customer service, warehouse and transportation areas, so that activities can be orchestrated without regard for functional domains or application silos. This can minimize manual interactions within the process, thereby improving operational efficiency. For example, synchronizing inbound and outbound shipments in transportation with cross-docking capabilities in warehouse management helps to ensure that goods can flow through the warehouse efficiently.

Optimize transportation decisions. To stay competitive, companies must meet customer demands through collaborative planning and execution with carriers and customers. Various industry surveys report a 40% market penetration of transportation management systems (TMS), yet these solutions, particularly those with on-demand models, can be relatively easy to implement and reduce costs significantly. In fact, collaborative TMS networks have the potential to save up to 20% of total shipping costs by optimizing load building, streamlining inbound and outbound processes, offering carrier rate comparisons and supporting contract compliance.

Accelerate the order lifecycle. Once connected with your partners, you can optimize one of the most important activities—the order lifecycle. By combining the steps of the order lifecycle into a single, unified process that encompasses everyone in a supply chain, order management technology can enable you to place or modify orders, determine order status, check inventory availability across all locations and manage the integration of returns back into inventory across multiple sales channels.

Enable strategic sourcing practices. Strategic sourcing means longer term continuous improvement in supply. Thinking in terms of today’s supply chain risks, the assessment of the supply market and the suitable, financially solvent suppliers, it demands factoring in a supplier’s ability to “network” into its collaborative community. A more connected community enables flexibility to meet demands with relevant real-time data sharing across the network and identification of supply chain risks such as unforeseen production delays, maintenance of service levels and other costly exceptions. Avoiding these risks helps to retain needed capital otherwise lost to inefficiencies in data management.

Leverage supply chain visibility to minimize risk. Even when all parties are connected in a global supply chain, there is still risk of supply chain disruptions caused by economic, geographic or political issues. When information is kept in disparate systems, visibility into the supply chain needs to be centralized to combat these challenges. Visibility tools need to be easy to use, draw from all of the systems in the supply chain and provide a view, preferably in a role specific dashboard, of that information so it is actionable.

Gene Nusekabel is transportation & logistics industry marketing manager with Sterling Commerce.

This article originally appeared in the Logistics Today digital magazine. To read other articles from that issue, click here:

Latest from Global Supply Chain