The Role of Information Sharing in Global Supply Chain Operations
Information sharing can radically improve the way global companies and their partners do business, especially in the wake of increasingly globalization and outsourcing, which has and will continue to have a profound effect on supply chain operations. By exchanging information such as inventory levels, forecasting data, and sales trends, companies can reduce cycle times, fulfill orders more quickly, cut out millions of dollars in excess inventory, and improve forecast accuracy and customer service.
Information sharing can be applied to almost all the core domains of corporate operational activities. Starting from the development chain process where information sharing can happen in the product design stages and product life cycle management activities with both internal and external partners. In the customer chain processes information sharing can help in formulating customer experience strategies, increase customer service effectiveness and operations.
The psychological barriers around information sharing are real and imperative. Sometimes there is a real and justified fear that information sharing across the corporate boundaries can turn into a competitive disadvantage. By formulating effective business policies, agreements and business plans that an enterprise can use to establish guidelines and rules for exchange of information with supply chain partners can help assuage those barriers. This will ultimately help mitigate the fear of information sharing and improve efficiency and create new opportunities for all stakeholders.
Information sharing can be most effective and least disruptive for all concerned when done by implementing the available technological tools, which would accomplish the process in a controlled and secured way thereby streamlining the global supply chain operations.
Collaborative Planning, Forecasting and Replenishment workflows and solutions exist in the supply chain process to enhance supply chain integration and data sharing across enterprises but very few companies effectively use it to their competitive advantage. The current challenges that organizations face in implementing these workflows really revolve around non-integrated processes and systems with retailers and manufacturers operating out of their own silo and different planning data. This results in excessive response times, costs and inventory due to forecast inaccuracy. Retailers on one hand face stock-outs, material shortages, lost sales and poor customer service to name a few. On the other hand manufacturers get plagued by obsolescence and inventory costs impacting margins. SAP's Supply Network Collaboration tool, JDA's Collaborative Supply Planning and Execution tools offer sophisticated and rich workflows to enable information sharing with the extended supply chain partners which not only provides timely visibility into supplier fulfillment constraints but also facilitates speedy resolution resulting in reduced purchasing costs, expedited freight and better supplier negotiating capabilities.
A large apparel, footwear and golf equipment manufacturer implemented key features of collaborative supply planning and procurement execution tool to achieve forecast analysis and collaborative workflows on the planning side and firm order collaboration with vendors on the procurement execution side.
The gains achieved were two-fold. On the planning side sharing of mid to long term forecast and publishing near term requisition forecast to suppliers and receiving supply commits from them resulted in reduced material shortages and stock-outs at the component level. Additionally, synchronized and tightly integrated procurement and manufacturing planning activities gave planners the ability to quickly re-plan globally based on changes in execution.
On the other hand Intelligent Buyer-Supplier approval workflows facilitated timely visibility of supplier's fulfillment constraints and their resolution by the corporate procurement group, resulting in aforementioned benefits of reduced procurement costs at different levels. The global buying group also achieved execution efficiencies with a single view of all procurement worldwide, managing different replenishment programs and multiple communication channels with their supplier base using a single system.
In the past manual order processing, spreadsheet dependent and fax/phone method of communication with suppliers made a dent not only to the corporate procurement budget but also generated global operational plans that were out-of-date because of limited-to-no visibility into supplier's plan and operational constraints.
On similar lines global organizations can harness the power of technology to collaborate with their supply chain partners to exchange information and work as a single entity. All this can be done with the end objective of having greater understanding of the end consumer behavior and effectively responding to the changes in the market place from a supply chain perspective so that manufacturers make the products only when they are needed and retailers store and sell them to end customers, drastically cutting down on their own inventory levels and associated costs. In the long term timely exchange of information will not only improve supply chain responsiveness but will also enhance cash flow and profitability to every link in the supply chain and ultimately contribute to consumer satisfaction.
AIRBUS Sup@irWorld eSupplyChain Project represents one such successful example in the Airbus Manufacturing industry. Following Link gives more information about that www.gs1.fr/gs1_fr/securedownload/dl/1742/23924/file/Airbus.pdf. I would love to hear comments and thoughts from the readers.