How B2B Solutions Provide the ‘Cornerstone’ to Improved Supply Chain Resilience
In my previous blog entry I discussed how Supply Chain Directors need to focus more on improving resilience across their supply chain and logistics networks. According to a report from Accenture the correct and increased deployment of ICT infrastructures can contribute significantly towards improved supply chain resilience. GXS offers B2B solutions and services that can provide the flexibility and scalability that Supply Chain Directors need to minimise disruptions across their supply chains. In fact, cloud based B2B integration solutions can provide a key ‘cornerstone’ towards developing a highly resilient end to end supply chain.
In terms of helping to build increased supply chain resilience across a supply chain, B2B solutions can help in three very distinctive ways:
Provides Flexibility – one of the challenges faced by companies during a period of disruption is ensuring that business related transactions supporting production or other processes continue to flow across the extended enterprise. If disruption occurs then an alternative path may have to be identified quickly to allow transactions to flow uninterrupted to their intended destination. In terms of a B2B infrastructure, companies should ensure that if disruption occurs and data centre resources become impacted they can instantly fail over to an alternative data centre location. If no other data centre is available then some form or disaster recovery process should be in place to ensure that transactions can be recovered as and when the data centre comes back online.
GXS Managed Services, GXS’ outsourced B2B environment, utilises a highly available, dual continent data centre infrastructure that provides immediate failover and back up to an alternative data centre, should supply chain disruption occur. Using state of the art storage devices and network routers GXS can ensure that your business critical transactions can get from A to B with no interruption or delay. In addition, the GXS Managed Services environment is highly scalable and flexible allowing your B2B infrastructure to expand or contract as your business requirements change. Many companies are beginning to spread their production risk by manufacturing goods in more than one country, so that if one plant gets impacted then production can be quickly ramped up at the other locations. In a similar manner, GXS Managed Services provides an environment to spread your B2B risk so that you can continue working with your trading partner community during a period of disruption. Companies managing their own B2B environments via software based solutions will not enjoy this level of flexibility or reliability.
Enhances Visibility – The manufacturing sector is probably the most global in nature when compared to other industries and having true end to end visibility across a supply chain is an important requirement to ensure production lines do not get disrupted. Whether sourcing parts from suppliers in China, Brazil or India, having end to end visibility of all shipments can make a big difference to the smooth operation of today’s production lines. In fact in the automotive sector, Just-In-Time production techniques depend on the timely delivery of parts and any delay with delivery can result in severe penalties for those suppliers concerned. So when an unexpected earthquake or flood occurs, having visibility of what is happening across your supply chain becomes more important than even before. You may need to identify alternative sources of inventory, quickly identify goods in transit so that they can be re-routed to an alternative location or you may need visibility into cross border related shipments.
GXS Active Logistics provides a single, cloud based, platform to monitor all global shipments irrespective of the logistics carrier or the form of transport being used for the shipment. Being able to monitor shipments across multi-modal transport networks anywhere in the world and keep track of shipments as they pass through busy container ports such as Dubai or Singapore can have a major impact on your supply chain operations. GXS Active Logistics also allows key performance indicators (KPIs) to be monitored across your 3PL providers and hence you have the ability to identify points of weakness across your supply chain. Many companies have established control towers across their operations to monitor supply chain shipments and GXS Active Logistics forms a strong foundation for such an environment. With so many disruptions occurring across today’s supply chains, these visibility control towers are doubling up as crisis management centres and they become the go to point of contact during a period of disruption.
Improves Communications – One of the key areas where B2B tools can help minimise supply chain disruption is in supplier management, otherwise referred to as community management. After all when some form of disruption strikes you need to make sure you can remain in contact with your trading partner community or identify alternative sources for production materials very quickly. Community management tools increase resilience in two key ways. Firstly they can help establish what can best be described as a centralised B2B contact directory, typically a self-serving environment where all contact information for a particular supplier can be held. As a condition of doing business with some companies, suppliers will be forced to enrol through a workflow driven registration process to ensure that they provide all the relevant contact information.
Secondly, community management tools help to improve command and control processes across the supply chain. They also allow you to quickly assess the state of your supply chain in terms of identifying which suppliers have been impacted following a period of significant disruption. As suppliers provided their contact information during the registration process, community management tools allow companies to send out mass communications to a trading partner community with ease. You could also ask suppliers to complete online assessments to allow you to monitor the state of your supply chain. If one supplier gets impacted in some way then alternative suppliers can be identified quickly due to having an up to date contact database. Dual sourcing of key components is becoming a popular method of combatting supply chain disruption and community management tools help to orchestrate the selection of alternative suppliers with ease.
Community management tools help to minimise risk across a supply chain. Companies deploy Microsoft office for creating business documents, they implement ERP systems for managing production and business processes. Community management tools help to establish a dedicated IT infrastructure to help assess, manage and mitigate supply chain risk. When was the last time your company undertook a risk assessment of your supply chain? how long did it take to complete? did every supplier participate in the assessment? The ability to assess the state of your supply chain via simple to use community management tools helps to bring a significant competitive advantage during a period of supply chain disruption.
GXS Active Community is a community management tool that can help to build greater resilience to future supply chain disruptions. GXS Trading Grid®, the world’s largest cloud integration platform, has traditionally focused on moving data from one location to another. GXS Active Community on the other hand has been designed from the ground up to manage the people-based interactions across a supply chain, an area that many companies tend to forget when extending or restructuring their supply chains.
From establishing a centralised contact database for your trading partner community, through to deploying some form of assessment or survey, GXS Active Community improves the way in which you engage with your suppliers on a daily basis. Whether working with contract manufacturers in China, distributors in Eastern Europe or third party logistics providers in South America, GXS Active Community provides a single global platform that can help improve the flow of information across an extended enterprise.
It is one thing being able to deploy these B2B tools to help build increased resilience but when disruption strikes a supply chain there needs to be a co-ordinated approach to resolving any potential issues that arise. One increasing trend that I have noticed on professional networking web sites such as LinkedIn or Xing has been the emergence or rise of the business continuity manager role. This person becomes the go-to employee during a period of disruption, they become the central person who is responsible for steering a company through a period of supply chain disruption. Sometimes referred to as the ‘Masters of Disaster’, these people are key to making today’s supply chains operate efficiently and seamlessly.
The ability to proactively monitor supply chains and almost sense when disruption is likely to occur has become a key competitive weapon that companies have been keen to implement. Increasing regulatory compliance has also made the business continuity manager more visible in today’s extended enterprise. In the same way that a conductor controls an orchestra, the Master of Disaster will use the B2B tools at their disposal to monitor global supply chains and take appropriate action before major disruption can impact the business. Have you appointed a Master of Disaster yet?
In summary, in order to build increased resilience across a supply chain, companies need to address both the physical and digital supply chain issues. They need a B2B platform that is scalable, flexible, secure and available 24x7x365 days per year. If B2B solutions are deployed correctly and in a proactive manner then they can offer your business a significant competitive advantage, being unprepared or responding to disruptions as they occur is generally bad for business.
If you would like further information on why companies should be thinking about building further resilience into their supply chains, then please review THIS WEBINAR, which discusses some of the topics covered in this and my previous blog entry in more detail.