In 2020, supply chains hit a critical moment as they grappled with unprecedented global circumstances. And while there has been significant recovery, supply chain pros still face a lot of uncertainty. This is driving the adoption of new strategies and digital transformation in supply chains across many industries. This major recalibration is ongoing, as leaders continue to assess their situations and find solutions to the major supply chain challenges they face in an environment that is constantly evolving.
Supply chain leaders all face the same basic hurdles, regardless of industry. Many are external and outside anyone’s control. But some supply chain challenges come from within. They stem from not having the right tools to work strategically and proactively, rather than constantly fighting fires.
As we all move forward from the chaos of the last few years, it’s imperative that supply chains have the ability to work closely with their partners around real-time information. Here are some of the most critical supply chain challenges to address immediately.
Digital Transformation
By now, you know this is one of the most impactful supply chain challenges of today. The economy is global, and you must be able to communicate and collaborate with both suppliers and customers in real time—wherever they might be located. Digital solutions like SourceDay bring buyers and suppliers together so they can work closely on processing purchase orders (POs) and direct materials shipments.
POs change constantly, presenting yet another of today’s major supply chain challenges. This often leaves procurement teams buried in clerical work as they do their best to keep up with all the adjustments and make sure the enterprise resource planning (ERP) system stays up-to-date. An overwhelming number of direct materials procurement teams rely on outdated processes like trading spreadsheets or emails. Needless to say, this is a recipe for disaster.
SourceDay’s solution gives buyers a single solution they can use to manage every supplier and purchase order from end-to-end. Procurement teams and leaders have access to supplier performance metrics, analytics insights, and real-time data visibility for every order.
One major hurdle for supply chain digital transformation is supplier adoption. It’s common for buyers and supply chain leaders to sigh and say, “My suppliers will never use a portal.” That’s alright, because with SourceDay, suppliers can choose to adopt the solution or stick with their current email or EDI approaches. SourceDay’s one-click onboarding means suppliers are up and running in minutes with little or no change to their workflows.
With digitization, all data is collected in the solution and automatically updated in the ERP. This eliminates added steps and ever-present data inaccuracies that hinder decision making and make real-time visibility impossible.
End-to-End Visibility
Speaking of visibility, you’re going to need it. This is a huge supply chain challenge for almost every manufacturer. You need accurate cost, quantity, and shipment information on every order, and you need the data to be accurate at all times. More than half of all POs will change at some point in their lifecycle, and as they do, you must be in the know.
Supply chain visibility enhances operational efficiency and reduces costs. When supply chain managers have access to real-time data, they can optimize inventory levels, manage production schedules more effectively, and identify opportunities for process improvements. By minimizing excess inventory and optimizing transportation routes, companies can reduce carrying costs and transportation expenses, leading to significant cost savings.
End-to-end visibility also enables better collaboration and communication among supply chain partners. When all stakeholders like suppliers, buyers, and leaders have access to the same data and insights, they can make more informed decisions and coordinate activities more efficiently. This collaborative approach fosters stronger relationships between suppliers, manufacturers, logistics providers, and retailers, leading to smoother operations and reduced lead times.
Achieving true visibility between you and your suppliers is one of the major supply chain challenges in today’s environment. The only way to get there is through technology. Supplier relationships built on manual communications and data entry are never going to cut it.
Collaborative Environments
Procurement teams must be able to work together with suppliers and other company stakeholders. Real-time visibility through technology makes it possible to tackle another of the most critical supply chain challenges: building a collaborative environment.
These environments foster shared responsibility and mutual accountability among all stakeholders. Each partner recognizes their role in the supply chain network and works collaboratively towards achieving common objectives. This shared commitment enhances trust and strengthens relationships among supply chain partners.
Collaboration encourages suppliers and partners to develop and grow together. By sharing knowledge, resources, and expertise, supply chain partners can help each other improve their performance. SourceDay automates and streamlines the entire PO process, enabling communication within the context of specific orders, notifying stakeholders as changes and updates are made, and holding everyone mutually accountable to their commitments.
Collaborative supply chains are better equipped to manage and mitigate risks. By sharing risk information and collaborating on risk management strategies, supply chain partners can collectively respond to potential disruptions, such as natural disasters, geopolitical events, or supplier issues. Diversification of suppliers and pooling of resources can also enhance supply chain resilience.
Supplier Performance & Management
Are suppliers delivering on time and in full? In a collaborative environment, everyone knows the answer to those questions. SourceDay makes it possible for supply chain teams to view supplier performance in real time through supplier scorecards and metrics. These metrics give leaders the information they need to make strategic decisions about materials sourcing.
For example, if you as a manufacturer rely on Supplier A to provide a critical part, but that supplier is consistently late or incomplete, it might make sense to add a secondary supplier to pick up some of the slack. This is a simple example, but it demonstrates one of the key supply chain challenges faced by many teams: you need access to real-time information about suppliers in order to truly work strategically to meet goals.
In outdated manual approaches to supplier management, real time information is virtually impossible to get. Buyers barely have enough time to process standard orders, acknowledgments, and PO changes. There’s no way they have time to verify all that information and run reports weekly, much less daily.
Visibility and collaboration lead to better performance and technology again delivers. SourceDay makes it simple for buyers and suppliers to work together. Buyers work in the cloud within the SourceDay platform, managing POs from start to finish. Suppliers have the option to use SourceDay, their EDI, or email to acknowledge, make changes, or send messages. SourceDay captures all this information and more, makes it available to every stakeholder, and provides insights into performance so everyone is held mutually accountable.
Overcoming Supply Chain Challenges Now and In the Future
Come what may, you need to have the tools to tackle any disruption or unexpected event. To do that, you need good systems in place—systems that ensure you’re looking at accurate information and that everyone is in communication around that info. This starts with digital transformation. Without it, you’ll never truly get over the hump and solve your most pressing supply chain challenges.
SourceDay’s cloud-based technology makes it possible for buyers and suppliers to work together around accurate data and centralized communication. That data is available to every stakeholder, providing end-to-end visibility across the supply chain. Any time relevant order data is updated, SourceDay logs it, sends notifications, and writes that data to the ERP.
This collaborative environment brings everyone together, eliminates hundreds of hours of clerical work, and boosts supplier performance like crazy. Real-time data visibility fosters trust with suppliers and mutual accountability for everyone involved.
Only SourceDay automates and centralizes the PO lifecycle while allowing suppliers to keep using their existing systems. Ready to see how SourceDay can solve your supply chain challenges? Drop us a line here.