Intelligent Supply: Collaborating with suppliers to accelerate innovation


Mon, 21 Jun 2021

3 to 5 mins read


In a report released by the Association for Supply Chain Management (ASCM) and Economist Intelligence Unit (EIU), it was found that over half of companies lack end-to-end visibility into their supply chains. A further 37% of companies reported that their visibility was hampered by either internal siloes or was not data-driven at all.

Satisfied customers, lower costs, no inventory shortcomings, and fewer disruptions; a very desirable place to be - for all supply chains across the globe. However, the world is far from where everyone wants to be, courtesy of a full-blown pandemic for more than a year now. The changes brought about by the sudden shift in customer buying and consumption behavior have led to the transformation of simple domestic supply chains into more complex and global supply chains. This has also led to unmanaged supply chains and lack of visibility for several organizations that are not equipped with a disaster recovery plan.

While organizations are trying to keep it together and tackle multiple fronts all at once, they are under a great deal of pressure to protect their operational viability. Legacy-based organizations that worked with data spread across disparate systems have suffered the most. They lack access to insights that are crucial for predicting and beating challenges. Organizations need to assess the extent to which relevant information is accessible within their supply chains and what can further strengthen their understanding on ways of achieving information visibility for all their supplier functions. 

The optimization of supply chain capacity, at this instance in time, depends on very many factors – all of which are affected by the most recent of the disruptions. 

  • Getting information together in the right format and place.
  • Interrelationships between the elements of a supply chain
  • Variability of these elements
  • The change in customer buying and consumption behavior
  • Availability of manpower for production processes 
  • Inconsistencies between outputs from production planning and production scheduling

Supplier capacity management

Supplier capacity is a huge determinant of the success of a supply chain, and the importance continues to get critical. And when it comes to multitier supply chains, establishing optimum transparency in and around critical components such as the origin of supply and alternative sources is not to be overlooked. By establishing data-backed prediction of demand and production capacity, supplier capacity can be optimized and actualized. Forecast visibility helps anticipate the risks and opportunities as planning teams have access to supplier capacity issues and can quickly initiate sourcing for alternate supply. 

Asking direct questions is the key: Who and where their tier-two suppliers are? What is their level of readiness for involvement in information-sharing agreements? What has been the history of risk-inducing disruptions? Is there enough visibility into the lower tiers of the supply chain to properly assess the overall impact and risk?

In Gartner’s report, “Market Guide for Supply Chain Visibility Software,” they state that "Supply chain leaders can improve performance and lessen the risk by using multi-enterprise, collaborative software for real-time insights across the value network."

In order to ensure a reliable supply of systems, components and parts with tier-one suppliers, transparent and readily accessible information is key. The need is to have a defined flow of processes - standardized well within a centralized system. To avoid any risks that might slow down production lines, it is an absolute compulsion to keep identified alternative suppliers on a watch list. 

Organizations need to qualify these suppliers based on local geographies, readiness to business, travel restrictions, government guidance, along with other generic factors. However, there are always instances when alternative suppliers are not available. To this hiccup, organizations need to step up to the need of their affected tier-one suppliers and address the challenge in collaboration. It is also a good idea to evaluate the possibility of early payments. When taken care of, the production keeps running smoothly and customer delivery is ensured.

So how can supply chain visibility into tier-one suppliers be improved? Automated tools - built specifically for supply chain visibility are the answer!

Supply chain organizations need to operate with a strong foundation on data analysis and open communication to eliminate bottlenecks. Work with cross-functional and accurate data exchange among teams to understand real-time monitoring strategies. 

Eliminate delays in notification to reduce the chance of mistakes and further delays on part of planning and production teams. Allow procurement the much-needed visibility into lead times or delivery dates to avoid overbuying “safety stock” that ties up cash.

Legacy practices need to go. They are all about outdated data, failure to identify potential risks, and wasting valuable time. The practice of manual updates to supplier information is to be eliminated. Supplier information management (SIM) is the key here.

Have a common view of purchase orders, facilitate collaboration with suppliers and use technology that gives other departments a window into what procurement is seeing.

Work with technology dashboards to direct crucial information to other departments to let them know where orders stand and what actions need to be taken. 

Organizations need to have an automated process in place that allows the complete management of all supplier data, even the ones beyond tier-one suppliers.

At its core, supply chain visibility into supplier capacity, throughput, quality is about being able to pinpoint the need of inventory at a particular time, tracking the change in demand and customer expectation, and understanding thoroughly who you are doing business with. Thanks to Supply chain technology, businesses now have the opportunity to introduce visibility into products and assets across the extended supply networks, and the ability to immediately act on those, minimize costs and offer optimum customer satisfaction for anticipated profits. 

Next steps

Ask us about our accelerators -  with guided tours we can get you started quickly