The Coronavirus disease (COVID-19) upended many outdated assumptions about digital transformation, truly challenging the status quo by necessitating change for B2B business leaders. Tried-and-true business playbooks and intricate strategic plans were now far removed from the landscape, as leaders braced for a new marketplace dotted with disruptions.
Nearly every B2B business was—and is—impacted by the health crisis, and many times this tied back to challenges with the supply chain. Supply chain disruptions, manufacturing delays and price increases have placed a cumulative strain on businesses around the world.
Today’s “global village” reflects the evolution of the supply chain, offering many new opportunities and challenges for B2B companies. Right now, e-commerce is at an all-time high. According to DHL, the B2B e-commerce market is expected to increase by more than 70% by 2027 Globalization has been driven by the continued push for increased profits via higher business efficiencies. Naturally, there has been a proliferation of business footprint expansion to countries like China and other low-cost geographies. This brings increased opportunities for businesses to produce goods and services more efficiently at lower cost, but also adds layered complexities to the supply chain and trade, embedded in risk; disruptions like the pandemic exposed the severe weaknesses in supply chains and their ability to handle landscape volatility.
Many businesses were forced to rely on a limited portfolio of partners, many with outdated information or those that were not able to navigate pandemic-fueled challenges prudently. As a result, they faced critical shortages and disruptions. Being able to manage supply chains more effectively via diversification will continue to offer competitive advantage in this globalized playing field.
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Bringing together pieces of the B2B puzzle
In recent decades, value chains have increased in length and complexity, according to a McKinsey study. Businesses that successfully executed a lean, global model of manufacturing saw improvements in indicators such as inventory levels, on-time-in-full deliveries and shorter lead times. But, one thing many companies may overlook is being aware of global competition and opportunities. B2B businesses today are not competing exclusively with competitors within their nation – everything must be assessed with a global lens.
B2B e-commerce platforms play an essential role, helping businesses access remote regions, making it possible to utilize partners and conduct business worldwide. These platforms enable new trading relationships between companies in addition to supporting existing relationships and diversifying search partners to manage risk and increase resilience.
Think global, act local: The digital transformation
For today’s businesses, e-commerce has a very different definition that what it did during the dot-com boom or even pre-pandemic. Transformation is necessary and the supply chain is a key area of enterprise activity seeing the biggest impact from technology. The result? Benefits in profitability, capability, risk management and efficiency.
Supply chain resilience has risen to the top of boardroom agendas as a key business priority, with astute leaders preparing for future waves of disruption. Old and new companies are sprouting solutions, leveraging advancements in technology to help B2B businesses thrive in volatile landscapes. For instance, every industry and nation has different regulatory compliance requirements and certifications, which can be challenging for businesses as they diversify by increasing partners globally.
Third-party organizations can oversee risk assessments in the supply chain that provide objective security scores for internal and external touchpoints. Digital solutions can bring together a customized risk assessment of the supply chain, based on field data collected from independent on-site verification of critical suppliers.
Additionally, all search engine traffic is not created equal. For far too long, B2B organizations have been challenged to compete for brand visibility, clicks and conversion on popular B2C search engines.
B2B takes center stage
Supply chain resilience for B2B businesses is strengthened by reducing risk via diversification. This includes diversification of labor, manufacturers, wholesalers, suppliers and vendors to mitigate potential disruptions. Securing this global portfolio was once very costly, as building trusted relationships required time and expertise. Additionally, many strong partner options in developing countries do not have a web presence and securing connections required local contacts.
Current search engines primarily cater to consumers and are focused to one country. This makes them less than ideal for B2B organizations that need to cross numerous international borders. The industry can benefit from niche search engines that can verify buyers and sellers using the search engine are legitimate and have been properly vetted, even including those without a traditional digital presence in the database to amplify diversification opportunity.
Recent McKinsey research on decision makers’ behavior globally across industries since the crisis began reveals that the big digital shift is here to stay. A DHL report even goes as far as to dub this as the next Industrial Revolution, with e-commerce transforming B2B. Forrester Research estimates that cross-border B2B e-commerce transactions will reach $1.8 trillion by 2023, accounting for 17% of all B2B sales in the United States.
This huge potential is pressuring B2B companies to adapt their supply chains to be more like B2C channels – adaptable, scalable, swift and global. What started out as a response to COVID-19 for many businesses has now become the expectation, with significant implications for how B2B buyers and sellers will do business in the future.