Companies struggle with supplier enablement

The challenge of co-ordinating all the supply chain participants and partners in an increasingly complex supply environment has stimulated many manufacturing companies to implement a Supplier Integration System.

These are inter-organisational systems that aim to integrate suppliers and contract manufacturers.

They are enablers of Supply Chain Management, are used in operational purchasing and planning of product related supplies in manufacturing firms.

Examples are the traditional EDI systems, Web-EDI, Web-enabled ERPs such as SAP SNC, and E-invoicing.

Supply Chain Management thinking, contract manufacturing and the rise of e-business have significantly increased the diversity of Supplier Integration System structures.

But according to a new study from Capgemini and the University of Twente in the Netherlands, many organisations are struggling to put an effective Supplier Integration strategy in place.

The question facing Supply Chain Managers has shifted from “should I adopt Supplier Integration?” to “what should be my Supplier Integration System structure?” and “How do I achieve this successfully?”.

The joint study, including eleven case studies from large global manufacturing companies, show a number opportunities for improvement.

Successful companies reach 80% of their partners and achieve the integration of 90% of their operational purchasing processes.

They use multiple basic structures to match the various partner capabilities.

Cooperation between suppliers is essential for success and requires both persuasion and coercion tactics.

More results include enablers, inhibitors, implementation tactics, best practices and pitfalls.

Based on these results an assessment of the Supplier Integration strategy is possible.

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