So-called multi-enterprise supply chains are the result of companies extending their sourcing, manufacturing and marketing reach globally. With no single business capable of providing all critical functions in-house, there is a pressing need for process integration and collaboration, according to a new report by the Aberdeen Group. Major pressures experienced by companies today include rising costs, global competition and the need to reduce cycle times. To achieve a multi-enterprise supply chain, companies must have two-way electronic connectivity with partners, as well as real process collaboration. The latter term refers to an advanced stage of integration which involves business processes as well as data transfer. Drawing on responses from more than 117 companies, the report finds 68 percent having boosted their efforts in customer collaboration over the past two years, and just two percent having seen a decrease in that area. On the supplier collaboration side, 74 percent report an increased emphasis while zero saw a decline. According to Aberdeen, organizations that have made the most progress in collaboration are being rewarded for their efforts. "Best-in-class" companies are twice as likely to possess stronger links to suppliers and customers, one and a half times as likely to treat process integration and collaboration in a holistic rather than siloed manner, and four times as likely to have enhanced visibility into the performance of their business processes. The lengthening of supply chains has led to the need for both "structured" and "unstructured" communication, the first term referring to the traditional use of electronic connectivity based on worldwide standards, and the second meaning "semi-standardized business processes using internet and telecommunication tools," says Nari Viswanathan, Aberdeen's research director of supply chain management and author of the report on "Process Collaboration in Multi-Enterprise Supply Chains."
Timely, incisive articles delivered directly to your inbox.