Staying ahead of the curve in an evolving business landscape is essential to remaining competitive—especially in the world of global supply chains and complex operations. If the pandemic taught us one lesson, it’s that businesses don’t win—supply chains do.
Gartner says that more than 77% of companies said, in a survey, that they are investing in deeper and more collaborative supplier relationships to improve resilience and agility.
In this post-pandemic world, we are witnessing the rise of supply chain ecosystems, where networks of interconnected raw material suppliers, manufacturers, packagers, logistics providers and retailers work together to deliver products to end consumers. In the past, many of these businesses operated in silos, which led to inefficiencies and bottlenecks, as well as missed opportunities for collaboration and innovation. However, as the pace of business has accelerated and global competition has intensified, companies have begun to realize the benefits of working together in a more integrated and collaborative way.
Research predicts that by 2026, more than 50% of large organizations will compete as collaborative digital ecosystems rather than discrete firms, sharing inputs, assets and innovations.
Truly collaborative supply chain ecosystems need to be enabled by purpose-built digital solutions, and this need has led to the rise of multi-enterprise collaboration platforms which enable trading partners to share end-to-end, real-time data across the network to improve efficiency, reduce costs and respond to changes in the marketplace more quickly.
However, making the shift from “linear supply chains” to “ecosystems” is no small feat, and it doesn’t happen overnight. It requires a significant investment of time and resources, as well as a willingness to collaborate with the right partners across the supply chain and adopt the appropriate technology solutions to enable the relationship.
A “crawl, walk, run” approach can be implemented to gradually progress in supply chain maturity and ultimately reach “Supply Chain Nirvana”.
The journey to achieve digitally orchestrated supply chain ecosystems can be outlined below:
- Manual — Businesses rely on a combination of spreadsheets and manual business processes to run their supply chains. This is not intrinsically wrong but there are technology limitations in terms of speed, security and collaboration. Most companies have moved beyond this phase.
- Functional — The most common stage is what we refer to as ‘functional’ and is generally supported using enterprise resource planning (ERP) software. The functional stage delivers a foundational supply chain plan and tools for execution, with the ERP providing data in a common system of record for transactions. Unfortunately, this data is internally focused on the enterprise and does not consider inventory, capacity or cost of trading partners.
- Cross-functional — The cross-functional stage is where enterprises consider data and information beyond a function for the first time. Businesses start to ensure both integration and collaboration across their enterprise among facilities, business units and divisions.
- Externally collaborative — In the externally collaborative phase, there is a subtle difference between the sharing of data within the enterprise and external collaboration. Companies are collaborating across the supply chain, between themselves and key suppliers, and with customers. This is really the first time there is recognition that supply chains are not linear but are ecosystems and that collaboration and visibility is needed for global orchestration.
- Orchestrated ecosystems — This phase could be called ‘Supply Chain Nirvana.’ Companies have embraced ‘digitized ecosystems’ — operating within a fully connected ecosystem on a shared cloud platform with increased reliance on automation and autonomous decision-making. Artificial intelligence and machine learning take more of a central role as a mechanism for anticipating, predicting and automating responses.
Each progression along the supply chain maturity curve is supported by different types of digital solutions, with multi-enterprise collaboration platforms being the purpose-built solution of choice for enabling orchestrated ecosystems.
Investments that organizations make in multi-enterprise collaboration platforms to support data, automation, connectivity and intelligence in their supply ecosystems are helping businesses unlock a level of agility and responsiveness that would be impossible to achieve on their own. Frontrunners in supply chain digitization are reaping the rewards and seeing improved customer service levels, reduction of expediting costs, enhancement of planner productivity, and increases in revenue and margins realization, amongst other outcomes.
According to Accenture, 72% of supply chain ‘masters’ believe multi-enterprise supply chain capabilities will be critical to enable their customer experience-led growth.
As leading organizations continue to digitally mature their supply chains, all businesses must embrace the trend of supply chain ecosystems and multi-enterprise collaboration to achieve competitive advantage in today’s global market. While implementing a supply chain ecosystem can be challenging, the benefits are clear and organizations that are willing to collaborate with partners across the supply chain will be able to create a more efficient and effective supply chain that delivers better products and services and results to its customers.
