Study: Collaboration Technology Improves Supply Chain Efficiencies - Global Trade Magazine
  April 23rd, 2016 | Written by

Study: Collaboration Technology Improves Supply Chain Efficiencies

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  • 94 percent in survey saw significant improvement in connectivity using cloud-based B2Bi.
  • Opportunities for electronic streamlining of processes offset the resources necessary to achieve it.
  • 69 percent in survey said that they intend to increase the number of customers they trade with electronically.

Research released by the University of Tennessee, Knoxville, indicates that more organizations today are investing in B2Bi (business to business electronic integration) to cut costs and increase business flow efficiency.

Of those surveyed, 94 percent saw significant improvement in their electronic connectivity capabilities and 68 percent reported that their clients said they were easier to do business with after using cloud-based B2Bi managed services.

The study, from the university’s Global Supply Chain Institute, in collaboration with B2B integration provider DiCentral, looks at supply chain trends, issues and challenges expected in 2016 and beyond.

The study encompassed a quantitative survey of more than 200 professionals from a wide range of industries including consumer products, retailers, discrete manufacturers and process manufacturers. Companies ranged in size from $50 million to more than $2 billion. The survey asked respondents to weigh in on issues such as inventory visibility, supply chain costs, new enterprise resource planning integration, and responsiveness to customer demands.

Another major finding suggests that the opportunities for streamlining processes offset the resources to achieve it, as increased pressures on internal IT departments to meet core business objectives can lead to potential gaps in knowledge and technology.

Ninety-six percent of those surveyed said they are linked electronically in some way with at least one of their trading partners, yet the average organization spends just over five percent of its IT budget on electronic connections. Electronic connections are expected to increase more than 20 percent over the next three years, and 69 percent of those surveyed said that they intend to increase the number of customers they trade with electronically.

The study presents several examples of successful collaborations that achieved impressive results. An office supplies retailer invested time and technology to collaborate more effectively with a major supplier. As a result, in-stock fill rates rose significantly, to nearly 99 percent from below 95 percent. Lead times were reduced nearly 60 percent. Forecast accuracy improved by more than 30 percent, and inventory turnover increased nine percent.

Although B2Bi has been around for more than 30 years, many of those surveyed felt that it is still in an early stage, especially globally. Technology integration tools are widely implemented in some industries and sparse in others.

The study provides a framework for developing a strategy for technology-enabled collaboration and includes a self-evaluation to determine how well organizations are using technology to collaborate with their suppliers and customers, as well as a checklist for selecting a third party to manage electronic transactions.

“Trading partner collaboration in the supply chain environment is essential in today’s hyper-competitive and technological business world,” said Thuy Mai, president and CEO of DiCentral.