Why Supplier Collaboration is Essential to Business Growth

Waves of supply chain issues have driven home the importance of supplier collaboration. A healthy network is vital to achieving real-time visibility into your business transactions. We’ve seen the drastic effects of supply chain disruption, like delays and stock shortages from single-supplier reliance and challenges for inventory tracking and forecasting due to unpredictable demand.

The world is now well aware of the need for supply chain flexibility. Supplier collaboration has become a top corporate goal and is now a major priority for companies across industries. Research shows that organizations that collaborate with suppliers see higher growth, lower operating costs, and greater profitability.

But what exactly is supplier collaboration and how can it help your business excel moving forward? In this article, we’ll take a closer look at how supplier collaboration networks work. We’ll address the obstacles you may face in implementing these programs and how technology can help bridge the gap, positioning your business for growth and success.

What Is Supplier Collaboration?

Supplier collaboration uses technology to connect with your suppliers, regardless of their size or technological maturity. Integrated platforms automate and streamline document exchanges like swapping invoices, purchase orders and Advance Shipment Notifications (ASNs). They can also improve supplier communication, allowing you to expedite your shipping, procurement, and other processes for company-wide operational benefits.

Supplier collaboration can vary in complexity and effectiveness. A mature supplier collaboration program should help with:

• Mutual goals: Much of supplier collaboration focuses on cost savings and dependable delivery for the buyer. However, an optimized supplier collaboration program brings all parties together to achieve mutual business goals. For example, you could require that suppliers meet your technological demands or use a specific portal to work with you. A more collaborative option would be to meet them in the middle by leveraging a supplier enablement solution with communication options that fit suppliers of all types. The latter approach allows you to improve speed and accuracy and work with almost any supplier.
• Visibility: Supply chain visibility gives insight into your products’ location and movement. Better communication lets you understand what every party is up to, helping eliminate uncertainty and improve supply chain resilience and stability. Increased oversight gives you all the relevant data to quickly identify potential disruptions, which can also help prevent issues like the bullwhip effect.
• Diversification: Having more suppliers gives you greater flexibility to respond to disruptions. However, it can also make communication management more complicated. Still, supplier diversification is crucial in improving sourcing flexibility and reducing supplier dependence. The right technology can help you manage these complications more efficiently, letting you work with more partners and reduce risk.

Omnichannel supply chain management depends on seamless supplier collaboration for benefits like:

• Fast and reliable product delivery.
• An optimized customer experience.
• The automation of manual tasks.
• Streamlined procure-to-pay cycles.
• Extension of IT investment values.

This kind of supply chain collaboration helps to improve accuracy, ensuring that inventory and shipping data are reliable and up to date. It can prevent warehouse stock-outs or difficulties with drop-ship programs, so you can increase profitability and maintain a strong brand image.

The Technological Challenges of Supplier Networks and Collaboration

The benefits of supplier collaboration networks are vast. However, supplier management still has its challenges — most notably, the technological complexity involved. With many different ways to communicate with suppliers, you also have a wide range of potential solutions.

Some suppliers may use ANSI electronic data interchange (EDI) or XML formats, while others may communicate with you via emails, PDFs, or faxed documents. Balancing this broad spectrum of information can be labor-intensive. You may need to account for tasks like entering data, obtaining approvals, fixing errors, and answering phone calls or emails.

Managing the complexity of a large supplier network calls for the right technological solution. You’ll need an integrated supplier enablement platform that connects to your internal systems. It must support EDI along with XML, CSV, PDF, and other application-specific formats, and be able to translate them and deliver incoming data to your internal systems in the right format. With the right environment, you can maintain a strong network while bypassing the labor requirements that impede efficient, effective supplier communications.

What Makes Supplier Collaboration Successful?

Finding the right supplier management solution is vital to developing strong supplier communication networks and facilitating flexible, efficient information exchange. Once you’ve found the best supplier collaboration platform for your organization, here are a few features that can help you optimize your supplier collaboration strategy for growth and meeting business goals:

• Outsourced supplier onboarding: Save time across your teams by outsourcing the supplier onboarding process. Outsourcing your supplier can help you handle more arduous and complicated onboarding tasks, open your entire supplier network to exchange digital documents, and free up your IT department’s time and resources. They can also help develop onboarding guidelines and technical specifications, increase the speed and accuracy of information exchange, improve the success rate of supplier onboarding and offer ongoing support beyond the onboarding process.
• Reporting: Ensure your platform offers reporting tools, so you and your suppliers can benefit from easy-to-access benchmarks, scorecards, and other analytics. These insights can help improve performance and customer experience for both parties.
• Managed services: As with any complex technology, you’ll need a well-trained IT team. Managed IT services for supplier collaboration can tackle day-to-day support issues and free up your in-house IT staff for more important tasks.
• Direct enterprise resource planning (ERP) integration: Integrations are vital to successful supplier collaboration. Make sure your provider can natively integrate with your ERP for a smooth, streamlined experience that connects your data for an efficient, reliable solution.
• Data security: Data security should be front and center, ensuring that your information is accessible yet protected. It’s also necessary for complying with industry regulations and managing vendor risk. Look for at-rest data encryption, best practices in data retention and disaster recovery, Tier 3+ data centers, and real-time data replication. Other requirements include high service availability and 99.9% or higher uptime, plus security attestations like a strong security organization controls (SOC) 2 report and compliance with industry standards.

Simplify Supplier Collaboration With TrueCommerce

TrueCommerce OneTime is a managed service supplier enablement solution offering everything you need to connect with, onboard, and support your suppliers cost-effectively and at scale. For suppliers, the solution enables them to send business transactions via EDI, a feature-rich web portal, or other electronic file formats, such as PDFs. Non-EDI data is transformed into an ERP-friendly format on your end, so you receive consistently reliable and complete information no matter how your suppliers choose to connect. You’ll also get access to industry-standard supplier metrics such as compliance and on-time fulfillment performance. You can optimize the built-in analytics for the operational insights you need the most.

Many supplier collaboration services use a break-fix response, only showing up when problems appear. Here at TrueCommerce, we use a managed services model. Our proactive monitoring validates the flow of messages between you and your suppliers, identifying and preventing potential disruptions before they affect your operations.

Start Improving Your Supplier Collaboration Today

If business visibility is a top priority, an interconnected supply chain can transform your operations with insights and automation that enable you to make real-time strategic business decisions. The right platform reduces technical complexity so you can focus on your work without being buried in supplier communication demands. TrueCommerce makes supplier collaboration simple, so you and your partners can reach your business goals efficiently and reliably.

Reach out to an expert today to see how TrueCommerce can ease your supply chain operations all while saving money and minimizing risk.

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About the Author: Brian Lindner is the Director of Field Marketing at TrueCommerce. He has spent the last 15 years in B2B project management and marketing. His focus is on Vendor Managed Inventory and related eCommerce solutions that help companies save time through automation. Brian enjoys spending time with his wife and 2 kids and in his spare time brews delicious craft beer with his friends.