As we approach 2024, it becomes increasingly important to apply the lessons learned from the past few years, particularly in response to the COVID-19 pandemic. One of the critical lessons is the need to establish resilient supply chains.
The pandemic has highlighted that pursuing greater efficiency often comes at the expense of diminished flexibility and effectiveness. Therefore, it is crucial for companies to strike a balance between cost-efficiency and supply chain resilience, defined as the ability to withstand disruptions and recover operational capability after disruptions occur.
In a survey conducted in April 2022 with supply chain and logistics executives, over three-quarters of respondents (76%) considered making their supply chains more resilient a high or very high priority. Actions to enhance resilience included developing stronger, more transparent relationships with suppliers and improving real-time visibility to supply and demand.
Collaboration has also emerged as a critical factor in addressing supply chain challenges and opportunities. In an October 2022 survey, the majority of respondents (96%) agreed that collaboration with suppliers, customers, logistics service providers, and other trading partners is essential for addressing supply chain challenges effectively.
Additionally, sustainability is shifting from voluntary to mandatory, with initiatives like the European Union’s carbon import tax and California’s carbon emissions mandate. These regulations necessitate a focus on sustainability and emissions data collection from external partners.
To address these challenges and enable these capabilities, supply chain and logistics software applications are essential but not sufficient on their own. Efficient and scalable communication and collaboration with external trading partners are equally vital, as much of supply chain operations occur beyond a company’s four walls.
Business Networks, often compared to social media platforms like Facebook and LinkedIn, provide a solution to this challenge. Rather than establishing numerous one-to-one connections, companies connect to a business network where trading partners and thousands of other companies are also linked. These networks offer cloud applications that facilitate communication, collaboration, and business process execution efficiently and at scale.
Business Networks also offer a holistic view of the supply chain, helping companies break down functional and process silos by facilitating data and information flow across different processes. They enable a modern, end-to-end supply chain approach, aligning with the concept of “stapling oneself to an order” to improve interdepartmental relations and overall financial performance.
One example of a company leveraging Business Networks is Roca Group, a bathroom solutions company with a global and complex supply chain. Roca Group uses these networks for integrated business planning, collaboration with suppliers on purchase orders, and logistics coordination. They plan to expand their usage to enhance transparency, sustainability, and end-to-end supply chain collaboration.
In conclusion, Business Networks are playing a crucial role in helping companies develop stronger relationships with suppliers, improve visibility, collaborate effectively, and obtain emissions data from external partners. These networks enable businesses to implement the lessons learned from the COVID-19 pandemic, creating more resilient supply chains and positioning themselves for future success.