Imagine if ALL Your Suppliers Were Digitized and Integrated
What would your world as a buyer look like? What would you do with the extra free time?
As I boarded a flight earlier this week, I was amused by the “Imagine if….” advertisements along the jetway. It’s amazing how many personal flying and destination experiences one could have with the airline. It made me wonder what a one hundred percent digitally transformed supplier network would do for a buyer and an enterprise.
Always the visionary.
I tend to see the end state first and then work backward. Don’t recommend it as a practice for everyone, but it seems to work for me. In a digitally transformed working environment, I can see all orders get sent directly from the buyer’s ERP system. All communications and updated status from the suppliers would flow directly into the ERP instead of the buyer’s email. No manual entry of updates at all into the ERP system. I can imagine removing hundreds of emails from the buyer’s daily queue to free up for better sourcing, negotiations, and supplier performance metrics. I even foresee much less stress and more times for a buyer to enjoy some quality of life.
I envision that all outbound purchase orders would be directly connected to the suppliers no matter the level of business or the number of orders the enterprise does with any specific supplier. I am sure different inter-operability techniques would be used to address the spectrum of supplier classifications.
So where does one start on such an endeavor?
It seems it always comes down to people, process, and technology. First, break down the suppliers into tiers based on the level of business activity you perform. Per the Pareto Principle, the top 20 percent typically represent 80 percent of the direct material spend. These typically get integrated by connecting through a digital supply network like Elemica using an EDI type of service. The second tier or 20 percent can use a portal type of connection using the network. But what about the great unwashed? The thousands of suppliers you do business on the phone or email with them. The ones that clog up your email inbox?
What about the great unwashed?
There are now ways to digitize these suppliers using email directly. The Elemica Digital Supply Network, for example, can capture the outbound pdf formatted order and convert it into a transactional email for the supplier. The responses to the email get directly converted back into the buyers’ ERP system instead of the email inbox. All communication currently being done through email like invoices, change orders, supplier quality certifications, and Certificates of Analysis are digitized. One hundred percent automated into the buyer’s ERP.
All inbound supplier quality documentation would be digitally received through the network and messages sent back to the supplier if anything is delinquent, erroneous, or missing. The production and quality inspectors would be impressed. The life of the compliance officer is made easier, which makes everyone’s life a little easier.
If this was possible.
All communication and exception-based handling would be through the Buyer’s ERP solution. What a concept! It’s likely why the company invested in the ERP solution in the first place. No more manual entry of orders and updates and less costs to the company.
A new focus on supplier performance and logistical scorecards for better prices contracts and delivery considerations would be the main agenda for the day. Exception-based activity from ERP notifications would be driving buyer activity. I can see buyers on a beach right now enjoying some quality of life, just like in those airline advertisements.