A Comprehensive Guide to Supply Chain CollaborationRavi SundarRajan
In every aspect of a a supply chain, there are areas of collaboration. It’s important to understand each type of collaboration, its use in the supply chain, and when a business needs to use it. Some common areas of collaboration include:
- Purchase Orders
- Inventory/ Forecast
PURCHASE ORDER COLLABORATION
Some traits of businesses that need purchase order collaboration include:
- Companies with a small group of strategic, and where most items are single or dual sourced
- Companies that have frequent small volume purchase orders to the same suppliers
- Companies that have frequent revisions to purchase orders for any reason
The typical life cycle of a purchase order in these businesses is:
- Supplier confirms purchase order or requests for changes
- If any changes occur on the customer side, they are communicated to suppliers
- Orders are tracked and managed by both parties
SHIPMENTS/ RECEIPT COLLABORATION
Once shipments leave the supplier, an Advance Shipment Notice (ASN) is provided, usually detailing package details, serial numbers, expiration dates, etc. Having this is tremendously useful to the customer as they get an idea of the shipment and its contents before it is received.
Along with an ASN, shipment tracking services are also provided, from the time it is shipped until it reaches the warehouse. This is in case of a delay in the shipping process either due to the supplier or for external reasons.
The main benefit of collaboration in this process is when the material is received at the warehouse. In a traditional supply chain, it takes a lot of time to verify the contents of the shipment and to match it to the order sent. Using an ASN, however, all it takes is a single scan and the order sent is matched to the shipment received. Any discrepancies can be shared and resolved easily with the supplier.
FORECAST/ INVENTORY COLLABORATION
Forecasts are useful to provide a view into the future demand of the supplier and customer. If any potential delays are noticed, such as large order volumes, both sides can take measures to make sure the shipments arrive in time. This can help prevent unexpected problems and bottlenecks in the supply chain
Inventory collaboration is useful in a VMI system. In this method, all inventory is held by the supplier until needed by the customer. As such, having a view of how much inventory is held by whom and when the inventory needs to be delivered is absolutely vital to keep the supp,y chain running smoothly. This requires inventory visibility and collaboration.
Kanban or Just in Time (JIT) processes help with this as they offer a complete and easy solution to help collaborate forecasts and inventory. You can read more here: https://www.tpsynergy.com/e-kanban
To get compensated for their products, the suppliers need to send an invoice to the customers. Traditionally, this is done by sending a manual copy or as a pdf to the customer’s email. While this still results in the same pay, having to send invoices to every customer individually requires a large amount of manual work. This wastes valuable employee time that could otherwise be spent doing less tedious work. Using an electronic version of invoices like EDI or XML leads to increased collaboration on improving the efficiency of invoices management.
Integrating every aspect of collaboration into your business could cost you millions and take months, but TPSynergy makes it easy with a full-service collaboration platofrm that costs a fraction of what you would usually pay. Contact us to schedule a free demo to learn how we can integrate into your supply chain.