Supplier ecosystems can offset the effects of inflation – CGI

The world today is so marked by uncertainty that it has become part of the “new normal” for business. As such, organizations that want to thrive, not just survive, know how crucial it is to be integrated into supplier and partner ecosystems.

Speaking to Supply Chain Digital magazine in March 2022, Maria Rey-Marston – Global Supply Chain Innovation at Accenture – coined the term “Demand Response Network”. She said that, far from being linear, the offer is now “a network of suppliers, factories and transport companies, as well as smart places to place the products”.

These networks are greater than the sum of the participating companies. They enable organizations to collaborate with business partners to streamline processes, create real-time value, and quickly resolve issues as they arise.

Helena Jochberger is the world lead manufacture to Computer graphics, the global IT and business consulting firm. She says one area where strong supplier ecosystems can help businesses is to offset the effects of inflation caused by supply disruptions.

“With growing uncertainty, the issue of real-time scenario planning and multi-criteria risk management becomes more relevant. This is when data-driven ecosystems can provide significant support. »

Supplier networks can help offset inflation, says CGI

But she says that, to share data, ecosystem members need:

  • Clear contractual frameworks with defined rights and duties.
  • Have confidence in sharing their data
  • Data standards in place.

“With the help of privacy-enhancing technologies, manufacturers can share data without disclosing intellectual property,” says Jochberger. “If organized in the right way, data-driven supplier ecosystems can help mitigate inflation by securing supply across the manufacturer value chain.

Another area where robust provider networks and ecosystems pay dividends, says Jochberger, is in disruption mitigation.

Data ecosystems mitigate disruption

“Data ecosystems support real-time sourcing in the manufacturing value chain. If a supplier is unable to deliver a part, they will know about it through predictive forecasting and another supplier will take over,” says Jochberger.

Sustainability is another goal to which collaborative networks can contribute.

“Sustainability goals have become a business imperative, as financial institutions will no longer fund companies that fail to meet ESG compliance,” she continues. “Data-driven supplier ecosystems create transparency on emissions and waste across the value chain, and through this, manufacturers will be able to reduce both.”

Another supply chain professional who is in no doubt about the importance of collaborative sourcing ecosystems is Tony HarrisSenior VP and Head of Marketing & Solutions with SAP Enterprise Networkwhich allows organizations to collaborate with supply chain business partners, including suppliers, logistics and service providers, asset operators and maintenance contractors.

Supplier ecosystems can reduce business costs

“We have seen the effect of recent disruptions on supply chains, exposing their fragility. Because a business network can provide visibility across the entire supply chain, companies can anticipate issues that may arise,” says Harris. “This allows them to adapt and react quickly, avoiding unnecessary costs due to, for example, shipping delays.”

Harris echoes Jochberger’s point about enterprise networks improving resilience through greater visibility. “Companies can reduce costs through their ability to identify and work with the most efficient and least expensive logistics provider for order fulfillment. This allows companies to re-route shipments through a logistics company network, ensuring that deliveries are processed quickly to meet customer expectations.

“Such networks make a business visible to new suppliers, and this broader supply base can lead to new relationships, which helps drive down purchase prices, further improving profitability and bringing to light new opportunities. customer channels.”

Harris identifies other ways these networks can help:

  • Boost customer satisfaction – “One of the most important parts of running a successful business is having satisfied, referable customers,” he says. “When organizations collaborate in real time and work in parallel, the customer benefits. Customer service is enhanced because the customer receives the value as the network companies focus on their needs. This enables them to understand and meet customer needs, resolve execution issues in real time, and exceed expectations.
  • Choose aligned suppliers – On this topic, Harris says, “A business network provides transparency that allows companies to choose vendors that best align with their customers’ values, processes and expectations.
    “For example, from a logistical point of view, it may be more advantageous and less risky to work with a local supplier of raw materials. Additionally, selecting suppliers who prioritize sustainability can help companies meet their environmental, social and government (ESG) goals.
  • Revenue increase – “Leveraging a business network can help a business move beyond its local market into a global network that continues to grow as new businesses join,” he says. “Commercial networks are multipliers for buyers, sellers, shippers, carriers and even the use and maintenance of assets.
    “It helps companies expand into new global markets, find new customers, discover new opportunities and secure the suppliers needed to support these new business models. And with a global network of suppliers, businesses can be assured of supplies during times of disruption, reducing stock-outs and lost revenue.
  • Increased connections – Harris states that “every transaction has two sides, whether it’s buyer and seller or shipper and carrier.” That’s why, he explains, networks can grow quickly: “When a buyer uses a carrier, that carrier becomes known to the seller, who can then become a new source for both businesses. As these two companies transact more with others, the carrier can work for even more of their connections. This network effect is a great way for businesses to expand their customer base and business partnerships.
  • Anticipate risks and identify opportunities – “Who among us would not like to predict his own future to prepare himself for all that will arise? he asks.

He adds that, in the context of business continuity and resiliency, this capability should not be a pipe dream. “The ability to manage risk throughout the supply chain is mission critical,” he stresses.

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