10 minute read

The relationship between contract suppliers and brand manufacturers continues to evolve due to a combination of supply chain complexity, variability and speed. A growing percentage of Fast Moving Consumer Goods (FMCGs) are being manufactured and packaged by contract suppliers who provide high flexibility and speed to market. However, a greater reliance on supply chain partners requires:

  • Real-time visibility into what’s going on inside the partner facility;
  • Dynamic collaboration to ensure the supply ecosystem has the agility to quickly respond to change; and
  • The resilience to rapidly recover from disruptions.

Dynamic collaboration goes beyond providing static purchase order and shipment data, and includes real-time updates on operational data such as inbound and on-hand inventory, capacity availability, production status, quality inspection results and performance metrics. Maximizing the value of dynamic collaboration can only be achieved by taking into account the real-time data needs of key participants in the supply ecosystem:

  • Brand Supply Chain Planners who need to make forecast, material, and capacity planning decisions for not only internal operations but also for partner operations;
  • Brand Purchasing Managers who need to determine which partner is in the best position to fulfill an order and visibility to monitor the progress of the On-Time and In-Full performance of orders;
  • Contract Supplier Planners who need accurate and up-to-date forecast and order information to buy materials and schedule production for a complex set of orders; and
  • Manufacturing/Shop Floor Managers that need visibility into production orders and required materials and labor to ensure operations are efficient and effective.

Data-driven decision-making throughout the supply ecosystem increases agility and resilience needed to respond at the speed demanded by today’s customers. Supply ecosystems need dynamic partner collaboration to survive the ongoing supply chain disruptions caused by the COVID-19 pandemic.

Supercharge your Planning

Many brand manufacturers have invested in industry 4.0 system capabilities, including Enterprise Resource Planning (ERP) and Advanced Planning and Scheduling (APS) solutions. However, these solutions are mostly internal facing, meaning they do a great job at managing, planning, scheduling a company’s own operations but are not intended for multi-enterprise visibility or collaboration. Real-time information from partner facilities can supercharge these Industry 4.0 solutions. Feeding dynamic operational data from partner plants directly into ERP or APS solutions enables the creation of an extended digital twin that encompasses both internal and partner operations. This extended digital twin can be used to plan and analyze the extended supply chain and enable advanced capabilities like what-if scenarios, simulations and Capable-to-Promise whether a product is being produced in internal or partner plants.

Enable Dynamic Procurement

Many brand manufacturers have also implemented Procure-to-Pay (P2P) solutions which do a great job of managing purchase orders for raw materials. However, the static visibility that P2P solutions provides starts and ends at the front door of the partner facility. With a P2P solution, there is little or no visibility into what is actually happening once an order is placed until the order arrives at its destination. Dynamic collaboration shines a light into a partner's operations, providing a procurement professional the information they need to actively manage purchase orders to improve on-time and in-full performance. Dynamic collaboration enables supply ecosystem partners to be agile and resilient, no matter what changes or disruptions happen.

Ensure Materials and Capacity Availability

Incomplete and inaccurate forecast information and constantly changing order requirements make for a very complex and often frustrating contract supplier planning process. Contract suppliers, whether they are manufacturing and/or packaging a product, usually have dozens of customers all providing various levels of forecast and order information granularity and freshness. Dynamic collaboration helps to ensure the right materials, labor, and machine capacity is available to meet customer order requirements. Real-time visibility to forecast and order changes provides the contract supplier planners more time to adjust and maximize on-time and in-full delivery performance.

Manage Complex Mix and High Changeovers

Contract suppliers often make dozens of products every week, requiring shop floor managers to pay close attention to product sequencing to minimize changeover time and to maximize line efficiencies. Dynamic collaboration with brands on product shelf-life and material lot requirements and around order quantity and delivery changes enables shop floor managers to effectively adjust to maximize labor and line efficiencies while maximizing customer service.

Multi-Enterprise Supply Chain Platforms: The Future of Dynamic Supply Ecosystem Collaboration

The clock speed of the supplier ecosystem needs to increase to match or exceed the ever-increasing clock speed of the marketplace. Increasing the speed of sensing, analyzing and responding to changes is essential for supply ecosystems to remain competitive. In fact, some believe that to be competitive in the near future in some markets, the supply chain clock speed needs to increase by a factor of 10x. Sounds like a daunting task. However, a few leading supply ecosystems are well on their way to making this happen.

The first step is digital transformation and enabling digital supply chain operations. The second step is to enable real-time internal visibility and collaboration. Many companies have made it to this second step through Industry 4.0 initiatives. However, because most companies do not own their entire “concept to consumer” supply chain, very few have made it to the next step of enabling multi-enterprise dynamic data visibility and process collaboration. What’s needed is a solution that has been purpose-built to facilitate multi-enterprise data visibility and process collaboration. A Multi-Enterprise Supply Chain Business Platform ensures all partners in the supply ecosystem are aligned and synchronized which enables all partners to quickly sense, analyze and respond.

It is an interesting time to be a supply chain professional. Never before in history has the supply chain garnered so much attention. World leaders all the way down to kindergarten children are asking questions about the supply chain and wondering why the supply chain is broken. As a supply chain professional, with 30 years of experience, I can’t help but be excited about the opportunity we currently have to make significant improvements in the end-to-end supply chain.

Now is the time to act while the world’s attention is focused on improving the supply chain. Now is the time to build your multi-enterprise visibility and collaboration capabilities. Now is the time to conquer one of the last, great challenges of supply chain management: real-time, dynamic end-to-end supplier ecosystem collaboration.

Download our white paper to learn more about how a multi-enterprise platform can prepare your business for the future.

Written By
Mar 10, 2022

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