Today’s supply chains are a complex, global network of networks. Thanks to the increasing sophistication of everyday products and services – from cell phones to automobiles – supply chains often rely on four tiers of suppliers or more to deliver finished goods.
That volume of suppliers, the global spread of supply chains, and a lingering dependence on manual processes, make answering simple questions hard. “What’s the status of my order, shipment or invoice?” becomes an hours-long endeavor involving emails, Excel spreadsheets and piecing together a trail of individual business documents, often in the form of Electronic Data Interchange (EDI). Identifying and effectively managing disruption is also harder, especially when you consider that while most supply chain professionals collaborate primarily with tier 1 suppliers – a whopping 40 percent of supply chain disruptions occur among tier 2 to tier 10 suppliers.
Finally, for all its benefits in terms of lower-cost labor and materials, globalization has also introduced new complexity and risk. The current global pandemic is the ultimate example. More than 980 of Fortune 1000 companies have tier 2 suppliers in China. When lockdown went into effect in the region, many companies were unable to pivot quickly enough. Since most didn’t have visibility into tier 2 suppliers, they didn’t realize they had dependencies until they were informed by tier 1 suppliers. Then, they were unable to find, validate and onboard reliable, new suppliers in other regions – and it showed, on production lines, in warehouses and on supermarket shelves worldwide.
The good news is, there is a practical path forward to enable trusted, transparent and efficient supplier collaboration. Two key recommendations coming out of the World Economic Forum right now are digitization and prioritizing data security and privacy across your multi-enterprise supply chain. I couldn’t agree more.
The future of supplier collaboration is intelligent, digitized and self-serve to improve data quality, ensure information immediacy, and reduce disputes across your supply chain. It is built on a secure foundation of transparency and trust, which enables more strategic relationships to help you reduce cost, mitigate risk and drive innovation.
IBM clients are already enabling deeper supplier collaboration to create net-new value for their customers. My favorite recent example is a leading global logistics provider that is helping a major manufacturing customer shift from producing cars to ventilators. With IBM Sterling Supply Chain Business Network, this logistics provider can offer its customer frictionless connectivity with countless new suppliers to quickly and cost-effectively obtain the hundreds of unique parts needed to make nearly 30,000 ventilators. Together, they’re helping close the gap on critical medical equipment shortages across the US.
To continue helping clients minimize the complexity of supplier onboarding and collaboration, I’m excited to announce several innovative new capabilities in this space – along with key offers that IBM is making available to clients at a discount or at no charge for a limited time, in support of the COVID-19 pandemic.
These solutions are just a few of the ways we’re helping clients across industries to deepen collaboration with suppliers to create smarter, more innovative and resilient supply chains.
For more insight into these solutions – and to learn more about related COVID offers – read the other blogs in this series: