Best Practices for Supply Chain Integration

Once the enablement program is unveiled there are several truisms that have emerged regarding suppliers and their adoption rates. Expect around 40 percent of suppliers to actually sign up early and completely embrace the program. Another 30 percent will sign up at the last minute. These will be the least problematic groups. Another 20 percent will complain bitterly about enablement and will struggle to comply or may even attempt to ignore the program. Don't be discouraged; these vendors may not necessarily have a problem with universal supply chain connectivity. More than likely, they are merely the same 20 percent that always complain, and you probably already know who they are. Then there is the 10 percent of suppliers that prove the exception to the rule. These are the ones that you may need to deal with separately because of special needs. They may have extremely low volume, for example, where asking a vendor to utilize a solution or service for three documents a year just isn't worth it. And that brings us to the third and final best practice: maintaining universal supply chain connectivity is a process that never really ends.

Keeping It Going

To maintain a successful program, never think of integration as a one-time event. The third and final best practice we offer has to do with thinking of integration as a journey that involves ongoing, dedicated support of suppliers. It means staying on top of planning for the next enablement event from the perspective of the hub company, helping suppliers stay informed about the necessary requirements, and making sure that technology problems are taken care of swiftly and properly. This will all be less painful as integration layers are added in future initiatives.

There are some proven approaches that can be effective here. One way to solve the problem of providing ongoing support is by offering a hosted integration service. Companies that have done so have interesting business models where they provide enablement and management programs as a means to acquire new customers. This model is cost effective for all parties, since the costs are spread across hundreds or even thousands of companies. Also, suppliers can make their own decisions about how to meet compliance requirements, including the certification of software or services they already have in place.

However, regardless of whether you choose this approach or develop an alternate one, remember to think strategically about how support is provided. The goal is to have suppliers continually moving towards that magical state of universal supply chain connectivity.

Though it may seem like a massive challenge for those companies just beginning, the level of integration discussed here is attainable, even if you have hundreds or thousands of suppliers that need to be connected.

Starting with a non-exclusive process allows hub companies to get suppliers on their team by listening to their concerns and giving them choices when it comes to integrating with the hub-company computer systems. Providing a broad range of technology options is step two in keeping with the idea of leaving the decision of how to connect up to the supplier. And, finally, delivering ongoing, strategic customer support for both the hub-company and suppliers will keep the enablement process moving forward and will keep all parties engaged.

Following these practices is sure to make the path to universal supply chain connectivity much smoother and, ultimately, more profitable.

Jim Frome is the executive vice president and chief strategy officer at SPS Commerce.