10 minute read
As an avid reader of J.R.R. Tolkien's The Lord of the Rings, I see many parallels between supply chains today and the urgent need for cooperation and collaboration to achieve critical targets.
Today’s Fast Moving Consumer Goods (FMCG) companies face many challenges, including:
- Constant new product introductions
- Ever-increasing customer service expectations
- Rising demand and supply variability; and
- Increasing raw material, energy, and labor costs.
It seems like every week brings a new disruption to the supply chain. To complicate matters more, a growing percentage of manufactured and packaged products are being produced through partners. Real-time visibility and dynamic collaboration—not only within internal operations but also with external partners—is absolutely crucial to profitability and competitiveness.
Unfortunately, many FMCG companies today rely on mostly manual and antiquated solutions to gain visibility into and collaboration with their supply ecosystem partners. These partners all operate on different systems that produce a heterogeneous set of data that is very time-consuming and expensive to pull together. It is not surprising that most supply ecosystems today are unaligned and unsynchronized, leading to significant miscommunication, inefficiencies, waste and missed opportunities. In these disconnected multi-party ecosystems, planning and execution is based on outdated data.
“It’s the job that’s never started as takes longest to finish.” Samwise Gamgee, The Lord of the Rings (J.R.R. Tolkien)
What is needed is a Multi-Enterprise Supply Chain Business Network (MESCBN) Platform that unites all supply ecosystem partners through real-time visibility and dynamic collaboration. To paraphrase the inscription written inside the one ring from J. R. R. Tolkien's The Lord of the Rings, “One Platform to collaborate with them all, One Platform to connect them, One Platform to synchronize them all, and in visibility bind them”. A MESCBN platform effectively and efficiently supports a community of trading partners that want to coordinate and execute on multi-enterprise business processes.
A MESCBN platform is foundational technology for organizations that strive to coordinate, automate and transform their extended supply chain. With a MESCBN platform, collaboration takes place faster and seamlessly, and all partners get the information and answers they need sooner to reduce costs, increase revenues, reduce waste and become more sustainable, increase customer service while reducing supply chain risk.
Where once disconnected planners found out about problems too late to react effectively, a MESCBN platform provides instant alerts to deviations, dynamic collaboration to develop a plan of action and enables a quick and optimal response. Decision lag-time between partners shrinks, and opportunities for miscommunication and distrust lessen. Crucial, collaborative planning, execution, and analytics can be executed with confidence, thus helping to win the race against competitive supply ecosystems vying for the same business.
“That there’s some good in this world, Mr. Frodo. And it’s worth fighting for.”Samwise Gamgee, The Lord of the Rings: The Two Towers (2002)
According to recent research conducted by PwC, investments in supply chain visibility generate 8% additional revenue and reduce costs by 7%. Cost and revenue improvements are generated through:
- Improved trust and compliance through automating the sharing of information
- Improvements in On-Time and In-Full (OTIF) attainment leading to market share gains
- Improved agility to changes and resilience to disruption
- Lower total inventory and less distressed inventory through visibility to inbound and on-hand inventory
- Improved operational efficiencies through automation of data sharing
- Enhanced visibility to order changes, production adjustments, material availability
- Faster new product introductions through dynamic collaboration and streamlined data sharing
- Lower labor costs through the elimination of manual tasks and through higher efficiencies
Figure 1: The Potential Impact from Deploying a MESCBN Platform for the Supply Ecosystem (Nulogy)
The Third Age of the World is Ended and the Time Comes of the Dominion of the
Man Ecosystem. Gandalf the Grey Supply Chain Leader
According to Gartner, by 2026 more than 50% of large organizations will compete as collaborative digital ecosystems rather than discrete firms, sharing inputs, assets and innovations. According to Gartner these organizations will be exchanging multiple types of data with their supply chain ecosystem partners:
73% will be exchanging logistics data (e.g., inventory, shipping notification) 73% will be exchanging orders 66% will be exchanging demand forecasts 66% will be exchanging performance KPIs 64% will be exchanging product information (e.g. BOMs, product specifications) 62% will be exchanging supply chain planning data (production status, available capacity)
You step into the Road, and if you don’t keep your feet, there is no knowing where you might be swept off to.Bilbo Baggins, The Lord of the Rings (J.R.R. Tolkien)
Given the formidable challenges of coordinating with supply ecosystem partners, a top priority must be to strive for real-time visibility across the end-to-end supply ecosystem and for dynamic collaboration with key supply ecosystem partners. A SAAS Multi-Enterprise Supply Chain Business Network Platform can enable efficient and effective multi-enterprise execution and planning operations while providing shared analytics to drive continuous process improvement and more strategic partner relationships.
Given the needs of Fast Moving Consumer Goods businesses, supply chain teams are advised to ask themselves an overarching question: “Do we have the system capabilities we need to enable real-time visibility and dynamic collaboration with our supply ecosystem partners? Do these capabilities include plug and play connections, exception-driven management, agility to change, resilience to disruption, low cybersecurity risk, and the ability to promise customer orders based on partner available production capacity and material?”
If the answer to these big questions is “not really,” maybe it’s time to adopt a SAAS Multi-Enterprise Supply Chain Business Network Platform that enables your company to have “One Platform to Collaborate with Them All”.
Download our white paper to learn more about how a multi-enterprise platform can prepare your business for the future.