The Truth? Technology Might Make Your Supply Chain More Resilient
Technology will only make a difference in supply chain management if it’s tailored directly to your company’s needs.
Let’s get this straight: technology can’t fix everything. There’s no magic wand to solve every supply chain problem.
But technology can make your processes better. That means more time, money, efficiency, happy customers, and happy bosses.
And who doesn’t want that?
I’ve seen companies of all sizes improve their process flow with technology and make huge savings.
But that only happens when two conditions are met:
1) They choose the right technology. What does “right” mean? It depends on a host of factors, but in essence it’s solving a need or filling a major gap. Understand the business need first, then find the tech that fits – not the other way around.
2) The system is used the right way. That means getting full use out of it without exceeding the intended purpose. You get the maximum benefit without depleting other resources.
Don’t get wet
Consider this analogy: you need to go from one side of town to the other in the middle of a storm without getting wet. You know a motorcycle and a car can both get you there in time, but only the car would get you there dry.
This is what selecting the right technology is about. To borrow another vehicle metaphor, don’t use a Ferrari when a Ford will do. An all-singing, all-dancing system might look flashy, but it might be way too much for what your company actually needs.
Procurement and Supply Chain work the same way; getting to the other side of town means nothing more than sustainable profitability, competitive edge and market share. And the storm? Well, that’s just risk mitigation in the business world.
Getting the job done
Here’s a look at how real companies are using the right tech to save money and be more resilient.
Automate processes
From Purchase Order to Processing payments, streamlining a workflow within the supply chain allows for people to focus on decision making while facilitating resolution, eliminating paperwork, accelerating compliance, and managing exceptions.
Look no further than a global distributor of chemicals who recently chose a full guided-buying suite. They took away the manual labour by processing POs automatically. The result? Increased supplier payment compliance, reduced tail spend, and more resources for tactical and strategic decision making.
Accelerate communication
The right technology enables and accelerates communication. Your ability to react effectively to market conditions relies heavily on promptness and clarity. Technology can link your business operations to your supply base so you never miss a beat.
Improve visibility
Suppliers need to know where things are at any given point. And equally, you need to know what is going on with your supplies, assessing all potential risks. That way, you can mitigate disruption in real-time.
Take a US leader in food distribution for example. We recently led them through a full spend analytics effort to identify cost savings opportunities. The result? They saved USD $10M in one year.
Interpret and analyse data
Data analytics is no longer a competitive advantage; it’s a core necessity. Even something as simple as spend analytics is a powerful tool that can inform strategic decisions at the top level.
Break down silos and bridge functions
From Procurement to Accounts Payable to Operations, technology can provide a collaborative platform that everyone can access and understand. Everyone has access to the full information across the board, taking what they need and staying aligned.
That level of visibility across different functions can showcase how valuable you are to the company. Like a global leader of consumer products who recently leveraged a mix of eSourcing technology and advisory services.
They were able to demonstrate savings on a multitude of sourcing and category events while tying them to the financial goals of the organisation, effectively impacting the EBITDA and Cash metrics.
What CEO wouldn’t love to hear that?
Decrease redundancy, increase efficiency
Technology provides a platform for businesses to digest more, process more and err less. This alone saves significant resources, making the organisation and its suppliers more productive.
Enable compliance
Within the supply chain commitments, adequate performance and managed expectations are as critical as regulatory compliance. Technology can provide a platform for managing relationships, honouring commitments, and upholding agreements. All of that leads to better relationships.
Just look at a global pharmaceutical leader who implemented a supplier management module across the board. As a result, it can now classify its entire supply chain based on critical risk metrics.
That means the global operations are adequately diversified and critical suppliers are handling processes and data with the highest security compliance, privacy, and environmental sensitivity.
The smooth road to resilience
All of the companies I mentioned had different priorities. That’s why you need to choose technology that meets your specific needs.
And as you can tell, there are infinite combinations of tools and applications that can be used to “get to the other side of town”. But the idea is to get to the other side not just in one piece, but also in sturdier conditions. It’s about learning in the way, enduring and increasing resilience.
The key to come up with a combination that balances needs with budgets and aligns with your strategic vision, starts with defining what success looks like for your supply chain and those entities who manage it.
Modular, cloud based, and service driven technologies provide the needed flexibility toward the easiest and most yielding path to success.
