Growing market volatility and increasing supply chain complexities from highly distributed operations hinder visibility into supply chain processes. Enterprises alleviate this issue by electronically connecting to suppliers, enabling them to collaborate on forecasts and demand, as well as increase visibility into orders, inventory and shipments. As hundreds to thousands of companies are involved in bringing a product to market, their activities need to be closely synchronized in order to deliver products to customers on time and within budget.
Additionally, rapid responses and clear visibility into the supply chain are required to avoid costly mistakes. For example, excess raw material stocks held at a time of falling raw material prices incur huge losses, putting a manufacturer at a disadvantage relative to better prepared competitors. Alternatively, too low a raw material stock at a time of increasing demand can leave supply shortages, causing an inability to manufacture sufficient product, and losing customer demand to competitors who had better insight into changes in the supply and demand balance.
Consequently, companies have extensive technical requirements, and need a combination of business process, trading partner integration and supply chain visibility solutions to help optimize their supply chains. These businesses need to extend their supply chain activities outside of their four walls into a multi-enterprise network.
Multi-tier business-to-business (B2B) networks provide reliable secure connections and communications with all trading partners: suppliers, logistics service providers, and customers. These networks also deliver visibility and control over the business processes shared with outside companies. By automating business transactions with trading partners, companies gain profits and improve strategic decision-making with real-time end-to-end process visibility. It also results in faster payments, cost reductions and increased customer satisfaction.
Fundamental to it all is the data. Everything is predicated on capturing it across your trading partners and across supply chain processes. Statistics show that when a trading partner network reaches critical mass, value increases exponentially. Thousands of companies connected seamlessly across a supply chain operating network allow participants to better conduct business with each other, and leverage their collective activities to achieve operational efficiencies and cost savings.
What is fostering this push for multi-tier supply chain trading partner networks? The global economic landscape today requires businesses to demand visibility into supply chain processes of their entire enterprise and all trading partners to decrease exposure to risk. Not being able to see what is going on within B2B collaborative processes means unexpected disruptions can occur, impacting a business and its customers. As companies expand outside their four walls to do business on a global basis, establishing visibility across the entire network requires an environment in which communication is easily achieved.
Why has this historically been a challenge? Connecting a partner to a B2B network has typically involved the complex orchestration of:
- Establishing technical connectivity.
- Exchanging connectivity information.
- Identifying security considerations.
- Exchanging data transformation information.
- Establishing data standards.
- Developing data transformation routines.
- Establishing special processing rules.
- And more.
These traditional approaches to implementing and supporting external connectivity campaigns are expensive and time-consuming because of the myriad technologies and formats used across thousands of customers, suppliers and partners. The entire process typically takes between several days to many weeks depending on the trading partner systems and their capabilities.