Visit Our Sponsors
Investments in B2B connectivity span three decades, but today the primary mechanisms are based on manual efforts. More than 70 percent of companies in both process-based companies and discrete industries are dependent on phone, email, spreadsheets and EDI. B2B networks or the use of industry hubs are in use by roughly 20 percent of companies representing 7 percent of industry flows.
While EDI is effective in moving transactional data, it is point-to-point lacking community interaction. In addition, the dependency on spreadsheets is limiting the evolution of supply chain visibility. One manufacturer notes: “We received 1800 spreadsheets from our most important customer, but they change 5 times a day. We cannot keep things in order through spreadsheets and fax.”
The implementation of supply chain visibility grows more important with outsourcing and the building of supply chain relationships in the extended network. IT programs are not aligned to close the gap. Making this happen quickly is essential for business continuity, corporate social responsibility, and the prevention of major supply chain outages.
With one in three companies experiencing a material supply chain disruption in 2013, manufacturing companies want better supply chain visibility. The supply chain is more dependent than ever on flows of materials, services and products from trading partners; business leaders can see flows within their own companies, but the gaps in visibility between trading partners is high and a barrier to commerce. From our research, we find:
• Outsourcing Is a Reality. It Is Here to Stay. Ninety percent of respondents report having some level of outsourcing. Additionally, 30 percent outsource 40 percent or more of their manufacturing, and 55 percent outsource at least 40 percent of their logistics on a volume basis. It’s clear that inter-enterprise visibility is growing in importance.
• Supply Chain Visibility Has Many Forms. Few Are Being Delivered Well. The term supply chain visibility lacks a consistent definition. Visibility within the company is addressed by current IT architectures, but B2B architectures to support emerging supply chain visibility for requirements with second- and third-tier suppliers are evolving. There are still large gaps.
• Satisfaction with EDI Is High, but it is Brittle. Confidence in ERP to Close the Gap Is Low. The average company is very dependent on EDI. It is the workhorse of the extended supply chain, with over 50 percent of orders moving through EDI and 1/3 of orders moving hands free. Companies dependent on EDI are satisfied, but connections are brittle, often breaking with system upgrades. Similarly, companies with a single instance of ERP are more satisfied with supply chain visibility capabilities within their current organization. The greater the number of ERP instances the greater the gap in enterprise visibility. In this study, the average company had over six ERP instances.
To close the gap and improve supply chain visibility, the path forward is the use of new forms of B2B networks. These include a canonical integration capability, an application layer and a community infrastructure. A B2B network is built for one-to-many or many-to-many companies to interact in an architecture to facilitate flows through multiple parties simultaneously while maintaining data harmonization and synchronization.
Timely, incisive articles delivered directly to your inbox.