Paul Soong, Regional Director at e2open ANZ, talks about the best methods of managing your goods offshore, and the importance of a Supply Chain Operating Network to effectively align domestic and international supply chain partners.
The global trade network has provided long term success and profitability for Australian businesses over decades. Relying on a global network of suppliers, manufacturers, and logistics providers to design, assemble and ship their products, has allowed for businesses to focus on their core competencies and gain cost benefits using specialised outsourcing partners.
Although onshoring operations has its benefits, for many businesses, maintaining relationships with global partners is paramount to business survival and success. In an environment where the ebbs and flows of global supply chain processes are unpredictable by nature, companies require better visibility to orchestrate the movement of goods with their supplier and logistics providers on and offshore.
THE DEMANDS OF THE MODERN SUPPLY CHAIN
As the number of partners in the supply chain increases, so does the level of information exchange and coordination required among all the partners. This is no simple task.
To make things even more challenging, companies across all industries are facing three trends that make running supply chains more difficult:
Product proliferation: The significant rise in highly personable and customised products has presented companies with the need to exploit every single market niche and expansion into new geographies. In consumer markets, customer demand and market trends are shifting faster than ever, often driven by social media. As a result, it is not unusual for a consumer goods company to replace one-third of its products every year.
Shorter cycle times: Some call it the “Amazon Effect”, but expectations of super-fast service are not limited to the consumer market. Enterprise customers also expect rapid deliveries and quick order confirmations or answers to order changes.
High productivity pressure: As costs have been driven out of supply chains for years, there is not much “fat” left in the system. Companies now run lean operations with minimal inventories, just-in-time deliveries, etc. This does not leave any margin for error or last-minute changes. As a result of this additional complexity and cycle-time compression, the need for end-to-end visibility and tight coordination among supply chain partners is all the more important.
TRADITIONAL PROCESSES ARE NO LONGER SOLUTIONS
Conventionally, companies relied upon Enterprise Resource Planning (ERP) systems to be the system of record and the process orchestrator for everything that happens within the four walls of the company. Yet, with the unpredictable external pressures that have emerged since the pandemic, more and more is happening outside the four walls of the corporation and therefore outside the scope of ERP systems.
So, how do you successfully run an outsourced supply chain, when there is data model to store and exchange information back and forth with outside parties across multiple tiers of the supply chain?
Many companies recognise that to run today’s supply chains requires them to extend what ERP has done to the new reality of the multi-enterprise supply chain. A key aspect of this is the ability to respond to changes in demand and supply and integrate all up-to-date supply chain data in a complete end-to-end plan.
Traditional planning systems lack fast problem resolution, scenario, and decision support capabilities to manage trade-offs and iterate through multiple alternative what-if scenarios.
Leading companies are using state-of-the-art planning applications that give them rapid decision support with what-if scenario capabilities. These tools allow planners to evaluate the impact of this new information – be it a supply disruption or an unexpected order – and easily compare alternative plans to select the best option to be shared with all impacted supply chain partners.
One example of this is connected demand planning, which requires a new level of collaboration across internal stakeholders and with channel ecosystem partners, such as retailers, distributors, resellers, and even end customers. These applications give the ability to develop an accurate forecast to help manage an efficient, effective, and sustainable supply chain organisation and can be the difference between meeting or not meeting customer expectations for service and quality.
e2open’s demand planning and sensing platform provides a modern connected approach that facilitates seamless sharing of signals and plans between all parties, unlocking value for clients and partners alike.
Reusable network connections reduce the cost of exchanging information, while purpose-built AI transforms disparate partner data into decision-grade information to get a full end-to-end picture of demand for confident decision-making, even in uncertain markets. Having been recently recognised as a Leader in IDC MarketScape Report for Worldwide Supply Chain Demand Planning, this platform is part of a holistic solution encompassing all planning needs on a single connected network platform.
A SUPPLY CHAIN OPERATING NETWORK
On top of the need to employ demand planning and sensing platforms, a cloud-based network can help enable end-to-end visibility and collaboration among supply chain partners. Combined with dedicated decision-support applications that leverage the data in this network, this helps companies better sense and respond to changes. This is increasingly being referred to as a Supply Chain Operating Network.
Different from procurement networks that act as online marketplaces, Supply Chain Operating Networks focus on direct materials and more evolved collaborative workflows related to running an outsourced supply chain. Early adopters who are leveraging such solutions for running their outsourced supply chains see a range of benefits:
- Shared, single version of the truth that all supply chains partners view and can act upon;
- Always up-to-date and supporting the “always-on” economy; and
- All parties can fulfill their roles and responsibilities, making their own decisions, but in full alignment with the others.
Running an outsourced supply chain requires a higher degree of coordination and alignment across all supply chain partners that only a Supply Chain Operating Network can provide. It is therefore not a surprise that companies that have been at the forefront of outsourcing are also the ones that have embraced the new demands of the modern supply chain.
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