Dynamic Collaboration To The Rescue!
What is really needed to build an agile, resilient, efficient—and yes, profitable—supply ecosystem? Nulogy VP Hank Canitz believes the answer lies in transitioning from static to dynamic partner collaboration.
In today’s fast moving and constantly changing consumer goods supply chains, every decision depends on data which often originates from a supply chain partner. Although there have been some advancements in downstream data visibility and collaboration with customers, very little attention has been paid to upstream supply ecosystem collaboration. The adverse effects from the COVID-19 pandemic on the supply chain have highlighted the inadequacies of current upstream supply chain collaboration.
Companies of all sizes in most industries are waking up to the need for more effective collaboration with their supply ecosystem partners. But what is really needed to build an agile, resilient, efficient—and yes, profitable—supply ecosystem? I think the answer lies in transitioning from static to dynamic partner collaboration.
What’s the difference between “dynamic” and “static” collaboration? In the most general terms, dynamic means capable of action and/or change, while static means fixed. Static processes or solutions are usually less intricate, and do not support interaction, meaning they cannot support complex functionality. Dynamic processes or solutions can handle more complex functionality and can perform customized returns based on user, channel or application.
One common-day example of how systems can work dynamically or statically are websites. When a web page is requested by a user, the web server where the page is stored returns the HTML document to the user’s computer and the browser displays it. On a static web page, this is all that happens. The user may interact with the document, but it has no capacity to return information that is not pre-formatted. Static web pages are better suited for information that rarely changes. On a dynamic web page, the user can make requests for data contained in a database on a server that will be assembled on the fly according to what is requested. Dynamic web pages are better suited for uses that require data exchange and more complex interactions.
Dynamic collaboration provides the ability to take action based on changing/highly variable conditions. Whereas, static collaboration is less capable of enabling rapid response, and is better suited to fixed/stable conditions. As opposed to static collaboration that provides intermittent information often at a superficial level, dynamic collaboration provides the information granularity and freshness required to quickly sense changes, to efficiently and thoroughly analyze options to respond to changes, and to rapidly respond once a course of action is decided on.
Static collaboration tends to provide information to support standard, non variable operations, whereas dynamic collaboration supports both standard and highly variable processes that encounter continuous disruption and changes. Dynamic collaboration provides the information each partner needs to optimize their own operations and the information the supply ecosystem needs to holistically optimize to customer requirements. Dynamic partner collaboration provides a supply ecosystem a competitive advantage over competing supply ecosystems that rely on static collaboration.
How do we get from static to dynamic supply ecosystem collaboration? Like any transformation effort, moving from static to dynamic collaboration will take a combination of improvements in people, process, technology, and data. Most static supplier collaboration today is conducted through EDI connections sharing standard EDI transactions or through manual methods like phone calls and emails.
For example, an original purchase order (PO) is shared with some acknowledgement of PO receipt, and subsequent PO change orders are shared with their corresponding acknowledgements. However, until an advanced shipment notice is sent from the supplier, the only way for the customer to obtain critical order status information is through more phone calls or emails. Static collaboration does not proactively notify partners of changes, nor does it enable real-time updates of material shortages, machine breakdowns, labor shortages or any other disruption that could delay orders as they occur.
Dynamic collaboration, on the other hand, involves both procurement and supply chain planning resources to ensure On-Time and In-Full (OTIF) order delivery and to proactively sense, analyze, and respond to disruptions and changes. Real-time supply partner operational data including materials status and availability, capacity availability, production status, quality holds, and labor availability, is made available to customers to allow them to optimally plan to meet customer demand at the lowest total supply ecosystem cost. Customers share demand forecasts, real-time order changes, and any bill of material adjustments in real-time, allowing suppliers more time to efficiently meet OTIF requirements.
The introduction of Multi-Enterprise Supply Chain Business Network (MESCBN) platforms is what enables dynamic collaboration. As opposed to EDI and Supplier Portals that support, at best, intermittent connections between one customer and many suppliers, an MESCBN platform supports real-time many-to-many connections. To understand the power of many-to-many versus one-to-many connections, let’s look at a common analogy that we are all familiar with: contact management and networking.
Like many of us with a few years in the workforce, I used to keep my personal address book in Outlook on my home PC. I then moved my address book to the cloud, using Google’s Gmail, which was great. I could get to my contacts from anywhere, and it was safer than being on my PC.
But, whether my address book was on my computer or in the cloud, the information model is the same either way. If I update your contact record in my address book because you changed jobs, the change is made just for me. Nobody else benefits from my update. All your other friends still have to update their own address books independently. This is an example of a one-to-one data model.
Today, most of us have access to our personal contacts in Facebook and professional contacts in LinkedIn. For Facebook and LinkedIn, we each have just one profile “page” and we point our friends to that page. When a page is updated, it’s updated for your entire network of friends, immediately. Facebook and LinkedIn put everyone in the network on the same page and they use a Many-to-Many data model. That’s a simple, but very powerful idea especially when applied in the supply chain, where companies must deal not just with partner profiles but with thousands of complex supply chain objects and documents and with connections to thousands of organizations whose attributes change constantly.
With a Many-to-Many platform like the Nulogy MESCBN Platform each supply ecosystem partner only needs one connection to the platform to work with any other partner who is also connected to the platform. A multi-enterprise solution reduces the onus on the supplier and minimizes the barriers to adoption for all partners. By leveraging real-time data to enable dynamic collaboration through a SAAS multi-enterprise platform, all parties in the supply ecosystem gain clarity that allows them to remain agile, resilient and efficient no matter what disruptions or changes are thrown their way.
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