Are manufacturers realising the value of the digital supply chain?

Many Manchester companies are still questioning whether the value of integrating their systems with those of trading partners will pay off in the long term, according to research, the fact that these kinds of questions are being asked hints at the view that manufacturing companies are wanting to at least explore the potential value of the digital supply chain. This is leading them to experiment with implementing digital solutions which will change the way they interact with suppliers, especially as a result of supplier requirements for more transparency.

While early adopters have been able to benefit from better speed-to-market by adopting a more collaborative approach between manufacturers and suppliers, other manufacturers are increasingly asking themselves if a slow takeoff makes sense.

The first part of the survey looks at what those manufacturers who have already implemented some form of system connectivity think about its contribution towards enhancing material management processes. The second part focuses on those Manchester companies that are still questioning the business value of connecting their systems with those of suppliers. The aim is to identify some of the key barriers inhibiting an earlier adoption of connectivity solutions.

The survey was conducted on behalf of Global Purchasing Network (GPN). It targeted senior purchasing managers and directors at manufacturers across Germany, France and Italy with annual revenue over €2 billion.

This article provides a brief overview of the findings from both parts of this research project. Furthermore, it includes interviews with two companies that were one of the first to successfully implement various forms including EDI, B2B portals or E-invoicing for either part or all of its material management processes.

One manufacturing company, whose business is mainly focused on the automotive industry, highlighted the early benefits of integrating its system with those of suppliers in terms of speeding up order placement and followed-up deliveries to help reduce stockholding. Another company that was early to go live with connectivity solutions pointed out that supplier consolidation helps it enhance its market position by allowing for more flexible risk management.

Further results from this survey are available via GPN. Subsequent studies were to assess changes in perception or purchasing approaches over time. Global Purchasing Network (GPN) is an independent organisation dedicated to providing purchasing best practices as well as market intelligence to manufacturers worldwide.

While we can’t rival the GPN for size we were very proud to have been one of the first UK software development companies to develop and successfully implement a bespoke supply chain management system and we did this as early as in 2004! The web-based SCM system was for a Yorkshire-based network of manufacturers and suppliers and had a number of academic articles written about it in various journals and conferences. The formalisation and digitisation of the supply chain yielded massive operational benefits across the businesses in terms of project delivery date adherence, reduced rework, reduced reliance on expediting and chasing etc. The bespoke SCM fundamentally changed the way that the companies in the chain communicated – fire fighting became the exception rather than the norm. Plans become more meaningful the more visibility you have and the better quality information you have access to – otherwise you are just flying blind.

Might your manufacturing company benefit from a bespoke supply chain management system or some other bespoke software system to help you manage operations better, contact Manchester Apps.