By Vinit Verma
It’s probably fair to say that pre-pandemic, the average consumer thought very little about supply chains. That is until store shelves that used to stock toilet paper and other essential items stayed bare for weeks.
In this blog — the first of a three-part series — we’ll take a close look at supply chains, what they’re supposed to do, why they fail, and how, when they do, businesses can respond to make their supply chains more resilient.
A Smoothly Functioning Supply Chain Is Essential to All Businesses
During the height of the pandemic, businesses that could not effectively manage — or perhaps salvage is the better word — their supply chain soon were out of business.
The supply chain is the artery through which everything flows, from businesses to consumers or to other businesses. When its functioning smoothly, supply chain managers sleep well and we all get what we need, when we need it.
But supply chains are very complex, especially in an economy that is increasingly global. Even the humble Snickers bar, a product of Mars Inc., relies on innovative supply chain logistics. The term supply chain is somewhat misleading. It’s helpful as a simple metaphor, but that simplicity disguises the difficulty inherent in maintaining a high performing supply chain.
A Single Supply Chain Has Many Moving Parts
A supply chain requires coordination between many individual companies: retailers, wholesalers, manufacturers, warehouses, transporters, etc. The modern supply chain also has multiple tiers. For example, a manufacturer will have several tiers of suppliers, who in turn will have their own supply chains. The manufacturer’s first tier supplier for a particular component may need to procure it from a second or third tier supplier. The bigger the supply chain and more tiers of suppliers it comprises, the more complicated are the interactions and coordination between participants.
A well-coordinated supply chain can increase revenue and lower inventory costs for all the participants while improving customer satisfaction. But that coordination demands rapid communication made possible by the constant, near-real-time flow of data between all parties.
Extended, global supply chains are now the rule — not the exception, and they produce enormous amounts of data. Capturing that data and analyzing it are key to effective supply chain management.
Manual Processes and a Lack of Integration Slow Communication Between Suppliers
When suppliers are separated from each other — working in silos — most interactions happen through phone calls and email: phone orders, physical invoices, purchase orders, and shipping manifests. This inefficiency grows when it encompasses interactions across all the tiers in a supply chain. Conflicts of interest can easily arise between tiers of suppliers in terms of whose requests are addressed first.
In B2C and B2B scenarios, customers generate the demand. The organization at the end of supply chain must respond to that demand. So, it wants flexibility when ordering from suppliers. Conversely, suppliers want stability — predictable order quantities and delivery schedules. The only way to rationalize supply and demand is through data sharing between suppliers whose data pipelines are connected.
For example, a single purchase order from one supplier to another might have two thousand items. How and when will the upstream supplier know how much of purchase order will be filled? From a data standpoint, the fastest and most accurate solution is integration between the suppliers, which will include supplier master data (name, location, terms of service, operating hours, etc.) and data produced via EDI (purchase orders, invoices, etc.) and banking transactions.
In an integrated supply chain, this data flows freely and can be analyzed to make faster, more informed decisions that will improve upstream and downstream supply chain performance.
Connecting Supply Chain Vendors Through the Boomi AtomSphere Platform and the Snowflake Cloud Data Platform
Using the Boomi AtomSphere Platform to connect customers and supply chain vendors provides near-real-time visibility of demand, supply, inventory levels, shipping notifications, invoicing, and payment status. No more waiting four to seven days to send a purchase order by email and wait for an acknowledgement, only to find that your order will just be partially filled.
Using the Boomi platform to create a well-functioning, well-connected, and integrated supply chain delivers four benefits:
- Optimization of inventory levels
- More accurate forecasting, which can help suppliers maintain enough raw materials to meet expected demand
- Improved production and distribution planning
- Better risk analysis during fluctuations in demand and supply
The Boomi platform can connect to any data source, collect its data, and push it to the Snowflake Data Cloud, a fast, scalable data platform for analytics. For supply chain integration, the Boomi platform’s EDI capabilities are also especially valuable.
Boomi B2B/EDI Management offers built-in support for a wide variety of traditional and modern EDI standards, as well as the ability to define custom standards. It can also accelerate the onboarding of new supply chain partners, virtually eliminating data errors and reducing onboarding time from weeks to hours. Many integration platforms cannot extract and transform EDI data.
Supply Chain Analytics — Descriptive and Predictive
The volumes of data produced by a supply chain lend themselves to two types of analytics — descriptive and predictive. Descriptive analytics tell us what happened with products or suppliers during a period of time, the last week, month, year, five years, and so on. Predictive analytics use the outcome of descriptive analytics to make informed predictions about what is likely to happen in the future, which can help determine go-to-market strategies and tactics, as well as the most likely occurrence of supply chain failures.
Without robust supply chain analytics, supply chain management ends up relying on guesswork and the “gut instinct” of executives, which is not a reliable way to make business decisions.
Stay tuned for the next blog in this three-part series on supply chains!
You can learn more about Jade’s solution for supply chain analytics here on the Snowflake website.