In the wake of massive disruptions during the pandemic, businesses are continuing to invest heavily in supply chain technology and innovation. A new report from MHI and Deloitte found that 90% of companies are planning to invest more than $1 million in supply chain technology this year, an increase of 24% over last year. Impressively, 38% of businesses plan to spend more than $10 million, up 19% from last year.

This technology can make a major difference. The advantages of supply chain management software have been well documented: It creates enormous efficiencies and drives down costs by automating and expediting key processes, improving speed-to-market and limiting human errors. However, most such systems, including enterprise resource planning (ERP), are internally focused. As supply chains have  evolved, companies with a partly or wholly outsourced model need to be able to support a collaborative and transparent exchange of information with suppliers and partners.

That’s why more businesses are turning to multi-enterprise collaboration networks. Gartner defines them as “solutions that support a community of trading partners of any tier and type that need to coordinate and execute on business processes extending across multiple enterprises.” These cloud-based platforms enable a community of trading partners to coordinate and execute business processes that extend across multiple enterprises, providing end-to-end visibility and enhancing collaboration between businesses and their suppliers while enabling progress on environmental, social and governance (ESG) goals.

By expanding on the enterprise-specific capabilities of supply chain management software, these platforms help businesses to more quickly identify, select and onboard suppliers.

Digitization with a multi-enterprise platform creates visibility into prices, supply bases and costs, enabling predictive sourcing and allowing buyers to negotiate more transparent agreements. When brands and retailers have visibility into new suppliers, they’re better able to mix and match materials during the specification and procurement process. This visibility is key to sourcing competitively, especially for businesses that are geographically diversifying their supplier bases or branching out into new product categories.

What’s most exciting about multi-enterprise platforms is their ability to evolve along with the challenges of the supply chain. They’re continually introducing new efficiencies and capabilities, drawing on artificial intelligence to identify strategic opportunities for sourcing departments.

Recent changes in ESG policies and practices have underscored the need for systems that provide full transparency into every tier of the supply chain. Consumers and governments alike are scrutinizing the social and environmental impact of products as never before, and it’s not enough for brands and retailers to rely solely on an ERP or product lifecycle management system. They need a platform that can serve as a true control tower, using internal data as well as that from an interconnected community, to drive real-time decision execution even after a product is designed and developed.

Under sweeping new laws like the United States’ Uyghur Forced Labor Prevention Act and the German Supply Chain Act, customs agencies can withhold the release of merchandise until digital documentation can be presented that clearly illustrates all the entities that are connected to a specific purchase order. This is only possible if your platform is the system of record for all actors in your supply chain, as well as being your purchase-order monitoring tool and central product data repository.  

Sourcing more sustainable raw materials has become a strategic imperative for leading brands, retailers and manufacturers. By integrating with sustainability databases like amfori, the Sustainable Apparel Coalition’s Higg Index and the U.K.’s Waste and Resources Action Program (WRAP), supply chain platforms can turn those insights into action, and introduce safeguards that prevent them from sourcing from high-risk vendors or falling short of their environmental standards.

With so many new global regulations to adjust to and even more on the way, the coming years will reveal which brands and retailers have evolved their systems to meet those requirements, and which have fallen behind. Digitization with a multi-enterprise supply chain platform allows forward-thinking brands to improve their supply chain efficiency, as well as differentiate themselves in their commitment to sustainability.

Eric Linxwiler is senior vice president of TradeBeyond.