B2B Integration

What’s Average B2B Integration Maturity? – Pt 5

B2B integration maturity

A common question that B2B integration services provider are asked is “What are other companies doing for B2B integration?” When talking about B2B integration maturity, we want to know how we compare with our peers. In fact, the definition of being mature is being ahead of our peers. This post, based on a recent report from SCM World entitled “The B2B Integration Path: A Roadmap for Business Value Generation” is about what companies in the middle of the maturity model are doing, and how they got there. 70% of the respondents were scored as being at the middle or analytical stage – making this “average B2B integration maturity” for comparison purposes. The full report, available here, lays out the complete path to maturity. Moving from “Informative” to “Analytical” The second stage (informative) of B2B integration maturity is where companies have to engage digitally with a few key trading partners, so supply chain visibility is limited. In the third stage (analytical), organizations begin to gain “Collaborative insight through the aggregation and analysis of connected digital demand and supply data.” For more on the definitions of the stages, read my post on the 5 Stages of B2B Integration Maturity. So how does a company move from stage 2 to 3? According to our survey, which looks at three aspects of maturity – people, process and technology – there are several things that distinguish stage 3 companies from stage 2 companies. People There are two noticeable people differences between companies at stages 2 and 3. First, companies at stage 3 have developed functional or cross-functional B2B expertise. While only 29% of companies at stage 2 had developed B2B expertise, 78% of companies at stage 3 had. The second difference was the use of dedicated B2B staff. At 61% of stage 2 companies, all B2B staff were shared resources and only 17% had any dedicated staff. But only 22% had no dedicated resources and 78% had at least a few dedicated B2B staff members. Process In the process area, stage 3 companies are differentiated by a significant increase in the percentage of trading partners who are digitally connected and by a reduction in on-boarding times for new digital partners. In the survey, only 34% of companies at stage 2 connect digitally with more than 20% of trading partners, but at stage 3 that percentage rises to 83%. 68% of stage 2 companies report on-boarding taking more than four weeks for a new trading partner and none of the companies at stage 2 could on-board a new trading partner in less than two weeks. While at stage 3, 60% could on-board partners in less than four weeks and 23% had reduced the time down to less than two weeks. Technology In terms of technology, the first shift is in terms of standardization of tools. For 62% of stage 2 companies, the B2B integration toolset is undefined. But the toolset is undefined for only 10% of stage 3 companies. Instead, 44% of stage 3 companies report that core tools are defined and usage is locally consistent and another 42% report that core tools are defined and used consistently across multiple locations. Stage 3 represents a big move away from paper, fax, phone and email as transaction models, with only 11% saying that is their primary model, while 45% of stage 2 companies make that claim. There is a big shift to EDI and Portals with 14% of stage 2 companies reporting that most transactions occur via those modes, while 50% of stage 3 companies have reached that goal. Finally, companies moving from stage 2 to stage 3 report greater levels of ERP integration for transactions with 90% of stage 2 companies having no ERP integration or only have integrated a few transaction types. 61% of stage 3 companies have integrated with ERP for most or all transaction types.   Previous posts in this series: Don’t Be Immature – Impact Your Business With B2B Integration Maturity 5 Stages of B2B Integration Maturity – Pt 1 Does B2B Integration Have Tangible Business Benefits? Pt 2 The B2B Integration Maturity Landscape – Pt 3 First Steps in B2B Maturity – Pt 4  

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First Steps in B2B Maturity – Pt 4

B2B Maturity

Maturing your B2B integration program is definitely a journey. When OpenText commissioned SCM World to conduct a survey companies from all over the world, we were looking for a path companies could follow on their journey. Our goal was to help supply chain, operations and customer service executives see a path for B2B maturity. The full report, available here, lays out a path to maturity. Taking the first step The first stage of B2B integration maturity is where transactions are executed in siloed, reactive processes reliant on manual technology. In the second stage, organizations begin to transact digitally with a limited number of key trading partners. (for more on the definitions of the stages, read my post on the 5 Stages of B2B Integration Maturity). So how do you make that first move? According to our survey, which looks at 3 aspects of B2B maturity – people, process and technology – there are several things that distinguish stage 2 companies from stage 1 companies. People There are two big people differences between companies at stage 1 and 2. First, there is a shift in decision about B2B integration from internal silos (100% of respondents at level 1) to a centralized structure (48% of respondents at level 2). Second, the emphasis for integrated B2B activities moves from completion of tasks (100% of respondents at level 1) to consistency and accuracy (48% of respondents at level 2) and driving awareness of business performance (16% of respondents at level 2). Process At level 2, processes move from being siloed and disaggregated (100% of respondents at level 1) to being connected (82% of companies at level 2). Additionally, the frequency of process digitization increases beyond 25% of B2B transactions (100% of respondents at stage 1) to between 25-89% of transactions processed digitally (41% of stage 2 respondents). Technology In terms of technology, we begin to move from informal and unstructured information exchanges to unilateral exchanges. In the survey, 39% of companies have taken this first action in moving from the transactional (step 1) to the informative (step 2), with another 26% taking more advanced actions. Also, companies began to move from manual transactions with non-digital partners via non-digital means, such as a phone or fax machine to a standardized template (53% increase in respondents from step 1 to 2) or some level of digitization (12% more responses at step 2 vs step 1). Don’t forget to get your copy of the full report here. Previous posts in this series: Don’t Be Immature – Impact Your Business With B2B Integration Maturity 5 Stages of B2B Integration Maturity – Pt 1 Does B2B Integration Have Tangible Business Benefits? Pt 2 The B2B Integration Maturity Landscape – Pt 3

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The B2B Integration Maturity Landscape – Pt 3

B2B Integration Maturity

In partnership with OpenText, SCM World conducted a survey of 115 companies from all over the world. The goal was to guide supply chain, operations and customer service executives on the journey to integrating and automating B2B resources, specifically people, technology and processes. The full report, available here, lays out a path to maturity., while the excerpt below features the section of the report which summarizes the current B2B integration maturity landscape. SCM World’s B2B integration maturity survey yielded 115 responses from companies representing the automotive, consumer packaged goods (CPG), hi-tech, industrial and life sciences industries, among others.  (More on industry results in my next blog post). The percentage of responses by maturity level represents a relatively normal distribution, centered on an overall average maturity of 2.8, as shown in Figure 5 below. If you missed my post on the definitions of the steps – read it here. The largest group of respondents falls in the Analytical (step 3) category on the B2B integration path. Here, demand and supply use cases come together, beginning the multi-tier integration found in progressive steps. The supply chain data available is more than just simple information, and can be analysed more extensively to generate new business insight. Few companies have separated themselves from their peers at the lead along the B2B integration path. 16% of responding companies achieved an overall score greater than 3.4; only 2% scored at or above 4.0. What separates these companies is their Relational (step 4) approach to B2B integration. Here, the focus shifts towards a real-time approach that keeps pace with what is driving the business. Common toolsets and processes are leveraged to drive collaboration upstream and downstream across a growing network of suppliers and customers. Also notable is the move toward partnerships in managing B2B integration operations. CAPABILITY ADVANCEMENT REQUIRES PARTNERSHIPS FOCUSED ON DEVELOPING COMPETENCIES Outsourcing at least part of your B2B integration operations accelerates the expansion of partner networks, enabling collaborative relationships with other leading companies that drive advancement of all elements in parallel. Of the Relational (step 4) companies, 63% of operations are either fully outsourced (25%) or utilise a hybrid of external and internal resources (38%), leaving less than 38% to be run solely with internal staff. The most consistently present qualities across all of the leaders on the path show that: B2B integration is justified by real-time collaboration with trading partners Cross-functional B2B expertise is more evident within IT and/or the line of business Supply chain data is collected and organised via a collaborative network reaching to at least direct customers and suppliers Fully integrated processes exist with customers and/or suppliers More than 70% of all B2B transactions are processed digitally Previous posts in this series worth a read: Don’t Be Immature – Impact Your Business With B2B Integration Maturity 5 Stages of B2B Integration Maturity – Pt 1 Does B2B Integration Have Tangible Business Benefits? – Pt 2

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Does B2B Integration Have Tangible Business Benefits? Pt 2

B2B integration maturity

OpenText recently sponsored a survey on B2B integration maturity which was conducted by SCM World. We were interested in learning about what constituted B2B integration maturity and what impact that might have on a business. The results, available in this blog, lay out a path to maturity based on answers to the survey from 115 participants from all over the globe. For many organizations, B2B integration is just a means of doing business, a requirement to work with certain suppliers or customers. The survey revealed that companies who have achieved some level of B2B integration maturity have justified their B2B integration investments because it encourages collaborative business growth among partners. (Page 23 of the report) More importantly, the survey showed that the viewpoint of these companies was correct. Those companies who had mature B2B integration programs experienced tangible business benefits over those who did not. Here is an excerpt from the report: Initially, business need for B2B integration is understood, but often companies have yet to see sizeable improvements in business performance. For example, at the beginning of the B2B integration path: 61% have monthly inventory turns of one, or less 66% of companies at the lowest step have 61 days of sales outstanding (DSO), or more 33% are shipping outside of standard process by expediting at least 10% of orders As companies begin their advancement, they are accompanied by metrics improvements, (as shown in the chart below in this blog post). The trajectory of these metrics suggests that performance metrics are positively impacted as B2B integration matures. As companies advance to the analytical (step 3) and relational (step 4) steps on the B2B integration path, key improvements drawn from the study include: 72% of respondents experience savings of at least 20%, as compared to the costs of manual transactions More efficient order management, with 54% of companies expediting 5% of orders, or less Faster inventory turns, with 68% of companies achieving at least two inventory turns per month Better cash management, as 78% of companies at the highest step have 60 days of sales outstanding, or fewer Improvements in stock-out rate and perfect order percentage are also beneficial for advancing companies, as these metrics are reflective of supply chain agility and efficiency. This data coincides with decreased expediting costs, but more importantly creates revenue and profit opportunities by minimizing lost sales and optimizing product flow throughout the value chain. Where metrics have the potential to prove significant value to the business is in calculative metrics such as cash conversion cycle (CCC). The CCC is a conventional metric that, according to Investopedia, “indicates how efficiently management is using short-term assets (e.g. inventory) and liabilities to generate cash”. This is an especially important measure in volatile market conditions, as organizations are under intense pressure to maintain healthy balance sheets and strong cash flows. Ideally, a company’s CCC is as low as possible, with exceptional companies operating at a negative value, by effectively leveraging their supply chains to convert sales to cash prior to the actual transaction. Historically, only a few supply chain stalwarts have sustained a long-term negative CCC – among them Dell, Apple and Amazon. Using SCM World study data, the CCC is calculated for each step of the B2B integration path, based on the range of company responses. The results are quite clear: with each progressive step on the B2B integration path, there is an associated 2-3x improvement in cash conversion cycle. If you missed Part 1 of this series, read 5 Stages of B2B Integration Maturity.

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5 Stages of B2B Integration Maturity – Pt 1

B2B integration maturity

OpenText recently sponsored a survey on B2B integration maturity which was conducted by SCM World. We were interested in learning about what constituted B2B integration maturity and what impact that might have on a business. The research paper, available here, lays out a path to maturity based on answers to the survey from 115 participants from all over the globe. A section of the paper that describes the five stages or steps is provided here. What is the B2B integration maturity path? Based on the results of this research, the B2B integration path framework was developed to trace progressive advancement of B2B integration maturity in organizations across key industries. The B2B integration path framework represents a five step journey for advancing B2B integration maturity by using SCM World study data to identify improvements that must be made to increase maturity in the elements of structure and people (people), tools and technology (technology), and process (process). In addition to enabling you to determine your organization’s current level of B2B integration maturity, the framework also allows you to compare your organization’s level of B2B integration maturity versus that of your peers, across industries and against the broader business community. Routes to maturity on the B2B integration path are varied. True progress is marked by the intersections created with simultaneous movement along the three elemental paths of people, technology and process. The five steps on the B2B integration path are defined as follows: Transactional. Tactical execution of siloed, reactive processes on manual technology Informative. Key trading partners engage in foundational business processes, with limited digital visibility Analytical. Collaborative insight through the aggregation and analysis of connected digital demand and supply data Relational. Responsive network, with integration of most trading partners across multi-tier demand and supply networks Generative. Profitable growth cycles driven by end-to-end digital integration throughout the value chain In my next post, I’ll talk about what the research says about the benefits of moving along the B2B integration path.

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Building a Vendor Compliance Program That Improves Relationships – Seminar Series

vendor compliance

I wrote recently about how retailers can improve vendor compliance through deduction management. The premise is that by quickly capturing compliance violations and communicating them to vendors, retailers can prevent recurring violations that occur before the vendor is notified by paper-based processes. Deduction management solutions allow retailers to automate the chargeback or deduction process. Because the process is automated, managed, and clearly documented, most retailers implementing our solution process chargebacks faster. Would you believe that this doesn’t harm vendor relationships – it actually makes them better? That is what Stage Stores experienced when they implemented OpenText™ Active Intelligence for deduction management. How is that possible? This question that will be answered in an upcoming seminar series sponsored by OpenText, taking place in New York, Chicago and Seattle in June. Ken Lettre, Vice President of Vendor Compliance and Relations, will be joining us from Stage Stores to share how OpenText Active Intelligence helped Stage Stores increase accuracy, improve vendor response time from three months to three days and greatly improved the relationship between vendor and retailer. You can learn more and sign up to attend one of these June seminars today.

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Don’t be Immature – Impact Your Business With B2B Integration Maturity

B2B integration

It is easy to feel a little resentment when someone tells you that you need to be more mature. Frequently our immediately response is – why would I want to be more mature? Coming from the right person, we might instead ask – what do I need to do to be more mature? If you are involved in B2B integration, you need to be more mature. A recent research study by SCM World, sponsored by OpenText, shows that being more mature in B2B integration has tangible business benefits for your organization. The report also defines some things you can focus on in order to become more B2B mature. Business benefits of increased B2B integration maturity included: • Reduced transaction processing costs • Fewer expedited orders • Higher inventory turns • Lower Days Sales Outstanding (DSOs) • Higher perfect order rate • Fewer stockouts Sounds good, doesn’t it? It answers the “why would I want to be more mature?” The research doesn’t stop there. It allows us to understand what companies were doing to become more mature. It helps to answer the question – what do I need to do to be more mature? Interested in learning more about the benefits of B2B integration maturity, and what you can do to get them? Then join OpenText and Kevin O’Marah, SCM World’s Chief Content Officer, in a webinar on 24 May to learn what enterprises are doing to get these results through B2B integration efforts. Register and you’ll get a copy of the full research study report too!

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OpenText Enterprise World 2016 – More Business Network!

Enterprise World

If you’re going to take time away from your busy schedule to attend a vendor event, that event had better be relevant to your job, your business and the OpenText solutions you use. This year, Enterprise World has more B2B and secure messaging. We’ve reduced the number of keynote sessions and added 300% more Business Network breakout sessions to give you valuable insights, such as: How OpenText™ Trading Grid® Analytics delivers unprecedented supply chain intelligence How to reduce onboarding times by more than 50% and better manage supplier information How B2B mobility improves your supply chain responsiveness How to automate your procure-to-pay and order-to-cash processes How to jumpstart your Internet of Things (IoT) initiatives with pervasive integration and embedded analytics already available in the Grid Here is how you can GET MORE at Enterprise World 2016 More B2B Presence B2B is a leading strategic investment area for OpenText, and this is clearly reflected at Enterprise World 2016. You will find more than 40 Business Network breakout sessions. Check out these and other sessions: B2B Outsourcing Top 5 Best Practices (B2B-101) How to Achieve Global Shipment Visibility in Your Supply Chain (B2B-209) Improving Vendor Compliance and Relationships Through Automated Deductions Management (B2B-211) More Peer Presenters & Networking Attend Enterprise World 2016 and hear real use cases from your industry peers.  Gain insights and best practices from B2B customers, including MillerCoors, KeyBank, Northbay, Sutter Health and more. Check out these and other sessions: From Zero to Hero: How MillerCoors Transformed its Supply Chain (B2B-105) How KeyBank Grew Customer Satisfaction and Competitiveness with B2B Managed Services (TBD) Fax Customer Panel: Peer Best Practice Sharing with Northbay, Sutter Health (FAX-208) We are also providing more networking opportunities to help you build valuable professional relationships. More Technical Sessions Breakout sessions will cover detailed product updates and roadmap reviews so you can take advantage of the latest capabilities in your solution, and plan for what’s coming next – OpenText™ B2B Managed Services,  OpenText™ Trading Grid VAN and OpenText™ BizManager™ gateway. Technical experts leading discussions are eager to obtain your feedback on priorities and directions. Check out these and other sessions: Roadmap Roundup: BizManager B2B Gateway (B2B-203) Roadmap Roundup: Trading Grid Messaging Service (B2B-204) BizManager Transformation Mapper Workshop (UTR-1-6612) Get a Handle on Document Exchange: Trends in Connectivity and Communications Protocols (B2B-212) More Support & Implementation Best Practices Solution consultants and support experts will provide practical advice for optimizing your solutions, at all stages of their lifecycle. We will arm you with tips and tricks to be more effective in your role. Check out these and other sessions: The New Experience: Business Network Customer Support Update (B2B-215) Simplify & Optimize Your SAP Implementation with B2B Managed Services (B2B-102) How to Get the Most from Business Network Professional Services (B2B-216) More Strategic Direction To be successful, you need to stay ahead of major trends and other disruptive forces. Your B2B ecosystem is no exception. At Enterprise World 2016, you will learn about the impact of digital disruption, the Internet of Things, a bimodal supply chain, embedded analytics, and the movement to cloud and outsourced business models. Turn the buzz into reality and gain practical insights to get started in your organization now—leveraging the investments you’ve already made in OpenText B2B. Check out these and other sessions: Use Business Network Pervasive Integration to Kickstart Your IoT Initiative (B2B-107) Gain Supply Chain Intelligence with Trading Grid Analytics (B2B-207) Assess Your B2B Maturity: Are You Leading or Lagging Your Industry Peers? (B2B-100) More Industry Sessions OpenText understands that industries are bound by common markets, opportunities, and challenges. Learn more from your industry peers at Enterprise World 2016 with the following sessions, among others. Select your industry on the registration page for more. Financial Services: How KeyBank Grew Customer Satisfaction and Competitiveness with B2B Managed Services (TBD) Integration for Banks and Corporate Treasury (B2B-104) Business Networks for Financial Services and Insurance (FNS-200) Manufacturing: Simplify & Optimize Your SAP Implementation with B2B Managed Services (B2B-102) Improve Your Supply Chain Performance With Supplier KPIs (B2B-208) How Will Digital Disruption Impact Manufacturing (MFG-200) Retail: Improving Vendor Compliance and Relationships Through automated Deductions Management (B2B-211) Creating a 360-Degree View of Your Customers with Big Data Analytics (ANA-101) More Value You will get more value from Enterprise World 2016. In addition to these highlights, expect many opportunities to engage with OpenText B2B experts. Also GET MORE at Innovation Labs, Expo Labs, and Customer Reference Roundtables. And don’t forget the Business Network fax and secure messaging portfolio—helping you manage the exchange of unstructured information. Check out these and other sessions: Using OpenText Capture Center to Integrate Faxes into Your Applications (FAX-204) Best Practices in Deploying Secure Messaging Across Your Enterprise (FAX-202) Simplify & Save Money: Extend Faxing to the Cloud (FAX-201) You can register now.

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Fax in Your B2B Digital Transformation

fax

The journey of digital transformation. It’s likely that your supply chain has already started the trip. If not, then it’s very likely to start soon. Catalysts may be corporate events like mergers and acquisitions; initiatives like supply chain visibility; or IT projects like an Enterprise Resource Planning (ERP) system upgrade. Throughout the trip it’s important to consider your B2B partners — including distributors, transportation carriers, banks, insurance providers, or purchasing organizations — that help you deliver the level of quality in products or services that your customers expect. Your largest partners may already be on a similar journey of digital transformation so you can count on them to move forward with you, perhaps your mid-sized partners are as well, especially those with enough capacity or IT resources to support their B2B infrastructure. But what about your smallest partners? They may have little or no IT resources to support B2B processes and so rely on manual methods for invoices, purchase orders, delivery notices, and other B2B documents. To send these documents they will likely rely on a fax machine. If your business receives these faxes on a regular basis then you may have a community of small partners that could be left behind in the digital journey. It’s time to consider the fax in your B2B environment. According to a recent study, ‘The Current and Future State of Digital Supply Chain’, 48% of respondents rely on fax, phone, and email to interact with supply chain partners. That number reflects a vast amount of manual processes that could simply be accepted as the status quo. Businesses that seek to increase their visibility and transform their supply chain can lose sight of the fax—and the smallest partners as a result. With OpenText™ Fax2EDI, OpenText™ Business Network customers can automate fax-based processes with their trading partners. Cloud-based image capture services transform supply chain documents received via fax or email into machine-readable information, ready for integration into your back-office systems. So the next time you see a B2B document received through a fax machine consider the trading partner on the other end. Will they join in you in the transformation of your supply chain?

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Achieve Deeper Supply Chain Intelligence with Trading Grid Analytics

supply chain analytics

In an earlier blog I discussed how analytics could be applied across supply chain processes to help businesses make more informed decisions relating to their trading partner communities. Big Data analytics has been used across supply chain operations for a few years, however the real power of analytics can only be realized if it is actually applied across the transactions flowing between trading partners. Embedding analytics to transaction flows allows companies to get a more accurate ‘pulse’ of what is going on across supply chain operations. In this blog, I would like to introduce a new offering as part of our Release 16 launch, OpenText™ Trading Grid Analytics. The OpenText™ Business Network processes over 16 billion EDI related transactions per year and this provides a rich seam of information to mine for improved supply chain intelligence. Last year,OpenText expanded its portfolio of Enterprise Information Management solutions with the acquisition of an industry leading embedded analytics company. The analytics solution that OpenText acquired is being embedded within a number of cloud-based SaaS offerings that are connected to OpenText’s Business Network. Trading Grid Analytics provides the ability to mine transaction flows for both operational and business specific metrics.  I explained the difference between operational and business metrics in my previous blog, but just to recap here briefly: Operational metrics can be defined as: delivering transactional data intelligence and volume trends needed to improve operational efficiencies and drive company profitability. Business metrics can be defined as: delivering the business process visibility required to make better decisions faster, spot and pursue market opportunities, mitigate risk and gain business agility. Trading Grid Analytics will initially offer a total of nine out-of-the-box metrics (covering EDIFACT and ANSI X12 based transactions), which will be made up of two operational and seven business metrics, all of which are displayed in a series of highly graphical reporting dashboards. Operational Metrics Volume by Document Type – Number and type of documents sent and received over a period of time (days, months, years) Volume by Trading Partners – Number and type of documents sent and received, ordered by top 10 and bottom 10 partners Business Metrics ASN Timeliness – Number of timely ASN creation instances as a percentage of total ASNs for a time period Price Variance – The actual invoiced cost of a purchased item, compared to the price at the time of order Invoice Accuracy – Measures whether invoices accurately reflect orders placed in terms of product, quantities, and price by supplier, during a specified period of time Quantity Variance – The remaining quantity to be invoiced from a purchase order, equalling the difference between the quantity delivered and the quantity invoiced for goods received Order Acceptance – Fully acknowledged POs as a percentage of total number of POs within a given period of time Top Partners by Spend – Top trading partners by the economic spend over a period of time Top Products by Spend – Top products by economic spend over time Supply chain leaders and procurement professionals need an accurate picture of what is going on across their trading partner communities so that they can, for example, identify leading trading partners and have information available to support the negotiation of new supply contracts. Trading Grid Analytics is a cloud-based analytics platform that offers: Better Productivity – Allows any transaction related issues to be identified and resolved more quickly Better Insight – Deeper insights into transactional and supply chain information driving more informed decisions Better Control – Improved visibility to exceptions and underperforming partners allows corrective action to be taken earlier in a business process Better Engagement – Collaborate more closely with top partners and mitigate risk with under-performing partners Better Innovation – Cloud-based reporting portal provides access any time, any place or anywhere More information about Trading Grid Analytics is available here. You can also learn more about the benefits of supply chain analytics.

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What is a Business Network?

Business network

Companies do business outside of their so-called ‘four walls’.  Meaning, they rely on other businesses to accomplish their objective; hence, the importance of business-to-business (B2B) collaboration.  Companies source raw materials, semi-finished goods or services from other companies to manufacture products or to deliver services.  In turn, they sell those products and services to other businesses, consumers, or patients. Along the path to a finished product or service, many other organizations are involved — transportation carriers, distributors, banks, agents, insurance providers, purchasing organizations and more. The list is long.  Among these organizations, procure-to-pay, order-to-cash, corporate-to-bank and other business processes take place.  It’s a complex trading partner ecosystem, one that is always in flux, depending on current market or geopolitical environments. Supporting all of these business processes, of course, is information.  Emails, orders, invoices, ship notices, customs documents, designs, inventory status, pricing, and more. This list is long as well.  Information flows are necessary to support business flows, although often the business applications that run these business processes are not optimized for efficient information flow — especially when that information comes from many different types of systems, in different formats, sent by different protocols, and in different media (XML, EDI, paper, fax, email, etc).  That is where business networks come in. Business networks are cloud collaboration platforms that extend business processes and applications with the required information flows to digitize and automate key business processes.  Business networks are the fiber that hold the economic tapestry together.  A business network may be focused on a specific business process (e-invoicing), on a certain function (indirect procurement), on a specific industry (Automotive), or on a geographic region (EMEA). Ideally, your business network spans all of the above, delivering flexibility and growth of your digitization efforts into the future, regardless of where they may go — buy-side, sell-side, direct and indirect procurement, multi-industry, and global.  This is the OpenText™ Business Network. OpenText Business Network simplifies the inherent complexities in trading partner ecosystems, by providing a single connection that digitizes all information flows, whether they are suppliers, customers, banks or other valued partners — anywhere in the world. As a result, customer requirements can be complied with, suppliers managed, and organizations can focus on delivering their core business objectives.  OpenText Business Network is comprised of multiple solutions, from B2B integration, community management, procure-to-pay, fax, secure messaging, and notifications to provide a complete portfolio of B2B Managed Services solutions. With Release 16, Business Network goes beyond information flows to deliver unparalleled opportunity for digital transformation across extended business communities.  The OpenText™ Business Network Cloud 16 offers hyper automation, pervasive integration, and deep visibility, enabling leaders in the digital economy to leverage information across their extended ecosystem, incorporating trading partners and business processes. Release 16 represents a $2B investment over a 3-year time period to support digital transformation and create a better way to work.  It represents how OpenText is moving beyond Information Exchange (our former name), with a new Trading Grid Analytics service, broader procure-to-pay process support, expanded trading partner enablers and new mobile interfaces that enable anywhere, anytime access. Begin your journey and explore OpenText Business Network Cloud 16!

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Improving Vendor Compliance Through Deduction Management

vendor compliance

For retailers, vendor compliance programs are designed to help streamline and standardize the management of expense offset with vendors and/or suppliers. If you are a retailer buying from hundreds (maybe thousands) of vendors, having the ability to ensure shipment and supply chain consistency can save you significant operational costs. But this can create challenges for vendors, who may sell to hundreds of retailers, and need to follow the guidelines for each retailer and/or customer. In order to help with the complexity for both the retailer and the vendor, retailers publish vendor compliance manuals with standards and expectations for doing business with them. (Note –  if you do a web search for “vendor compliance manual” you can see examples of these by various retailers). But, as a retailer, simply publishing standards often isn’t enough for vendors to comply with, unless there is also some form of incentive as well. The incentive typically takes the form of penalties for non-compliance, also known as “chargebacks” or “deductions”. The process for capturing non-compliance, applying penalties, allowing the vendor to challenge specific deductions and then billing or reducing payments can be complex and time-consuming. If the process takes too long, a vendor may send multiple non-compliant shipments before they can be advised of any wrong-doing. Since the real goal of chargebacks is not to generate revenue, but to reduce non-compliance, timely notification and clear communication is essential to a successful program. So how can a retailer automate this process? The simplest answer is through a deduction management solution. One option is the OpenText™ Deduction Management solution, a cloud-based system for capturing non-compliance, automating internal reviews, notifying vendors, managing the dispute process, and scorecarding vendor performance. You can read more about the OpenText Deduction Management solution and view a demonstration of the mobile deduction capture feature running on an Apple iPad Mini below.  

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How IoT Will Enable Future Device Managed Inventory Processes

DMI FEATURE IMAGE - 200316

Last week I spent a very productive day with a leading technology analyst discussing the Internet of Things (IoT). The analyst had recently switched to covering IoT instead of B2B integration and EDI, so we had a very interesting discussion relating to the role of IoT in the supply chain, and how it will help to introduce more self-sensing, closed-loop processes to companies across multiple industries. I have been closely following the IoT sector for nearly three years now and have posted a few blogs on this subject. In this blog I wanted to highlight one significant area that I covered in an interview for Forbes magazine last year. I hadn’t realised the significance of the article at the time, which discusses how in the future, connected devices or things could potentially initiate some form of procurement process by themselves using analytics-based techniques to measure usage or consumption patterns for the connected device concerned. Say hello to Device Managed Inventory (DMI)! The analyst was quite surprised that this concept had not been mentioned before, and asked the ten participants in our meeting to search for the term “Device Managed Inventory” on Google, and only our reference was found. It’s rare to lay claim to a new industry term, but I certainly believe that we will see rapid adoption of DMI as more and more supply chain-related devices get connected to IoT platforms around the world. DMI is really an evolution of Vendor Managed Inventory (VMI) which has been around for years. Companies across the retail and high tech sectors have deployed VMI processes with key trading partners to help streamline their supply chain operations. VMI is part of a family of business models in which the buyer of a product provides certain information to a vendor (supply chain) supplier of that product and the supplier takes full responsibility for maintaining an agreed inventory of the material, usually at the buyer’s consumption location. A 3PL provider could also be involved to make sure that the buyer has the required level of inventory by adjusting the demand and supply gaps. The aim of VMI is to essentially prevent the buyer from running out of stock and to minimise inventory across supply chains, for example in warehouses or regional fulfillment centres. EDI has been central to this particular process for many years. The key to making DMI work smoothly is to efficiently collect information from sensors attached to the connected device, as in the case of the vending machine example shown below, and then feed this information into an analytics platform. Analytics routines would then continuously monitor consumption patterns, compare with stock levels, and when the levels get near to or below a predefined level, a procurement process would be initiated by the connected device and an automated EDI transaction would be generated and sent to the supplier for fulfillment. This application of DMI is really a form of Proactive Replenishment, the aim being to ensure that stock levels are always within a certain set of min/max levels and hence ensure that customer satisfaction levels are maintained. DMI would certainly be useful for replenishing stock levels in retail stores, maintaining fluid levels within gasoline storage tanks or parts quantities in storage bins located next to manufacturing production lines. This type of scenario, whereby the connected device initiates an EDI transaction, could also be applied in a Predictive Maintenance scenario. So for example sensors fitted to a vehicle’s water pump could detect water flow rate changes, perhaps due to a leaking seal or crack in the casing. This information would be transmitted to a vehicle service centre where new parts could be proactively ordered with the relevant supplier. The driver of the car would be notified that the water pump would likely fail within a 1000 miles and their vehicle would be booked in to have the replacement part fitted. I have discussed both of these scenarios in an earlier blog, where I looked at use cases for IoT across the supply chain and how analytics could leverage information flowing across the supply chain to make more informed decisions. Many of the key building blocks to make the above scenarios a reality actually exist today. MQTT, for example, is a relatively new open source communications protocol used to connect devices to a network. To learn more about how analytics will drive future supply chain operations, take a look at this earlier blog. Read more from the analyst I spoke with, who described DMI as a “Gob-Smacking B2B IT Mash-up”, in his blog here.

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Integrating Logistics Visibility into your Supply Chain Network

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Companies seeking to build a digital supply chain network with their suppliers frequently turn to EDI to digitize transactions and help with automation – placing orders, receiving advanced ship notices, receiving invoices and sending remittance advice. However, in the middle of this automated process, organizations often find themselves having to resort to manual processes for logistics visibility, in order to figure out when a shipment is supposed to arrive, especially for goods shipped via ocean carriers. If you are placing thousands of orders a month and receiving thousands of shipments, this manual process for checking ship status can be expensive as well as a potential risk to your business. This is where OpenText Active Orders new logistics track and trace capability comes in. First, Active Orders allows you to set up digital communication relationships with 3PLs and carriers. Second, as Advance Ship Notices (ASNs) are sent to you from your supplier, Active Orders forwards them to the carriers you have booked transportation with, requesting status updates. Using templates that you build, Active Orders will notify you when a shipment is expected to be late, based on current status. In the Active Orders portal you can see all shipments in transit, including which are at risk of being late, without having to make multiple phone calls, or  look up their status on multiple websites. Active Orders aggregates this information across multiple suppliers, carriers and 3PLs, providing the information your business needs – all in one place. Without this visibility, you could be carrying too much stock in your company, increasing your costs unnecessarily, or regularly running out of stock on certain items, decreasing customer satisfaction with your brand. OpenText Active Orders is a complete purchase-to-pay process for both digital and non-digital trading partners – providing end-to-end visibility of transactions in process – including logistics visibility. Learn more about Active Orders, or discover how one company using Active Orders succeeded in automating and optimizing their purchase-to-pay processes, resulting in increased productivity, reduced paper water and less time spent troubleshooting and fixing transactions.  

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Want to get your message across securely? Follow Sony’s CEO and fax it.

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Sony Entertainment CEO Michael Lynton is becoming the new poster boy for faxing. The executive recently revealed during a media industry conference that his fax machine is getting a lot of use these days, as he prefers to send hand-written notes via fax instead of sending an email. Lynton said he’s surprised by how quickly he can jot down a thought and fax it. While email may be even quicker, he explained that by taking a minute to put pen-to-paper and then sending a fax can be preferable to firing off emails in haste – the electronic version of speaking before thinking. The folks at Sony Entertainment have some experience in seeking out alternatives to email, following the hack of its network in 2014. As I mentioned in a recent blog on the topic, during the aftermath of the hack Sony employees took to picking up the phone, writing notes, and faxing in order to communicate with each other. Of these options, fax is the form of communication that can go from one party to the other safely and securely. Fax is a secure communication; so won’t be intercepted or hacked. A phone call can be overheard or recorded, and leaves a paper trail. Notes can be mislaid, stolen or confiscated, the latter possibly by an authority figure – cue those second-grade memories for some of us! A better alternative to fax machines is electronic faxing – no paper is required to send notes and other important content that you don’t want intercepted.  Learn more about how fax with cloud delivery is an ideal alternative to fax machines. What’s an executive to do? Fax, fax, fax.

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Understanding the Basics of Supply Chain Analytics

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Today’s supply chains move millions of shipments around the world each year, but just think for a moment about the information required to ensure these shipments get from A to B safely and on time. The information flows, primarily based on EDI/B2B transactions, to support today’s global supply chains are growing in volume year-on-year. What benefits could a business obtain by being able to monitor these information flows and obtain deeper insights into what makes supply chains ‘tick’? Say hello to supply chain analytics. Monitoring the day-by-day, hour-by-hour, or minute-by-minute ‘pulse’ of a supply chain could potentially bring significant operational and business benefits to a company. From a supply chain point of view, companies are looking for answers to questions such as: Who are my top suppliers and how many B2B transactions have I exchanged with them? Who are my top (and bottom) performing suppliers based on specific key performance indicators such as complete orders, accurate shipments, on-time deliveries and processing of payments? For which suppliers/customers has the order/payment volume increased or decreased by more than 30% over the last 12 months? Which of my customers sent me the most orders during the end of year holiday period and which ones sent many changes? Here at OpenText we are processing over 16 billion transactions per year across our Trading Grid B2B network. These transactions are feeding global supply chains with rich information to help ensure that orders are processed in time, deliveries are shipped to the correct destinations and invoices not only get paid on time but comply with the ever increasing number of compliance regulations. Now what if you could apply Big Data analytics to supply chain operations in order to obtain deeper insights into how your digital information flows are supporting your physical shipment flows around the world? According to many leading analysts, Business Intelligence and Analytics are the most important focus areas for the CIO in 2016. Big Data analytics has been around for a few years now, really emerging in 2010 with mobile and cloud based technologies, but it is really only over the last two years that companies have started to embrace Big Data across the enterprise. You only have to look at recruitment websites to see that one of the hottest jobs in the market at the moment are for Big Data Scientists, those that can understand rich data sets, analyse and then report on them. There are many EDI document standards supporting today’s global supply chains, with ANSI and EDIFACT formats being the most prevalent. But if you go to the EDI document level there are really just two types of information that are useful from a supply chain analytics point of view. Firstly,operational-based information and secondly, business specific information, so what does this information actually look like? Operational information could be considered as the type of documents flowing between trading partners across a supply chain, so this would include Purchase Orders, Invoices, Advanced Ship Notices (ASNs) and Order Acknowledgements. The volume of these transactions could run into thousands, or for a large global company, millions per year. What if you could use this information to determine the volume of transactions by document type and volume of transactions by trading partner? Applying analytics, let’s call it operational in nature, could help to determine the top trading partners that a company deals with on an annual basis and also provide insights into the most popular document types being exchanged. Chances are, companies doing business only in North America will be exchanging more ANSI-based documents while companies doing business on a global basis will be using EDIFACT. So, Operational Analytics could be defined as delivering transactional data intelligence and volume trends needed to improve operational efficiencies and drive company profitability. Business information could be considered as the data from within each document type. So for example for an ASN, it would contain information such as delivery address, shipment details, quantity, sender details etc. What if you could actually perform deep introspection on each business transaction as it flows across a B2B network and then use this information to produce a series of business-related trends that could be reviewed, and if necessary, acted upon? Applying analytics, in this case business analytics, could potentially help a business to determine ASN timeliness, Invoice Accuracy, Price Variance and so on. If there are any exceptions or errors then the business can take corrective action and resolve any problems much sooner. So, Business Analytics could be defined as delivering business process visibility required to make better decisions faster, spot and pursue market opportunities, mitigate risk and gain business agility. Applying operational and business analytics to a pool of billions of transactions flowing across a business network could transform the day to day work activities of supply chain, logistics and procurement professionals around the world. Let me briefly highlight two use cases for supply chain analytics. The retail industry is highly consumer driven and seasonal in nature which introduces significant fluctuations in the procurement process. Being able to monitor the volume of documents, by type, across a business network can potentially provide retailers with some interesting indirect insights into consumer demand in different markets around the world. Applying operational analytics, especially when applied to a few years of historical data could help to forecast potential order volumes and therefore allow retailers to be better prepared for seasonal fluctuations. Operational analytics, based on B2B transactions could potentially transform the retail industry, making it more responsive to consumer demands and ensure that inventory levels are aligned more accurately with expected demand levels. In the automotive industry, ‘ASN Timeliness’ is one of the most important variables measured to ensure that Just-in-Time production lines are running smoothly. ASN timeliness can be defined as the number of ASNs sent on time divided by the total number of shipments within a specified time period. Many automotive companies use ASN timeliness as the basis of monitoring the performance of their trading partner community. Applying business analytics in this case allows a car manufacturer to not only monitor supplier performance from an ASN delivery point of view, but also compare suppliers against each other to create a top ten ranking of delivery. What if you could monitor the ‘live’ transactions flowing across a business network and apply business analytics to monitor trends and exceptions before they impact the business? As shown by the ASN timeliness chart above you can use analytics to very quickly assess and compare the performance of your trading partners. Some car manufacturers use ASN timeliness as the basis of determining whether penalties or even contract termination should be applied. So in summary, applying analytics across trading partner information flowing across a business network could: Provide a complete 360 degree view of supply chain activities Offer deeper insights into transaction based trading partner activities Provide earlier identification of exceptions, allowing corrective action to be taken sooner and prevent supply chain disruptions Allow more informed business decisions to be made The  two examples above are based on company specific transactions flowing across a business network, but what about looking at a community as a whole? Applying analytics to an entire community of companies connected to a business network could provide some interesting insights into business/industry activity as a whole. Every month the manufacturing industry, one of the main contributors towards a country’s GDP, waits to hear from global economists as to how each country around the world has performed. The Purchasers Managers Index (PMI) measures eight key metrics each month, for example number of new orders, stock levels, production output and changes in employment levels. A PMI number above 50 signifies that a country is in growth and a number below 50 signifies contraction. Three periods of contraction will normally signify that a country is going into recession. The numbers below relate to the January 2016 manufacturing PMI numbers for the G8 member countries. You can quickly see here that Japan and Italy tied in January as the fastest growing economies in relation to manufacturing PMI. OpenText™ Trading Grid connects over 600,000 companies, and processes over 16 billion transactions with a commerce value of over $6.5 trillion. Applying analytics to this scale of transaction volumes could provide deep and very rich insights at both industry and country level as to what is happening from a business growth or contraction perspective. If you were to apply analytics to a community of trading partners on this scale then in theory our results should be broadly in line with the PMI trends, especially as many of the order volumes for example being measured as part of the PMI process are actually moving across our Trading Grid infrastructure as EDI transactions. I have only scratched the surface in this blog about how analytics can be used to provide operational, business, customer and community-related insights to supply chain operations and further blogs over the next few months will take a closer look at each of these areas. If you would like to see how analytics can be used in a different situation, in this case to monitor the US elections coverage,take a look at our Election Tracker. Also take a look at Trading Grid Analytics, a new breed of embedded analytics that provide insights across entire business flows.

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Applying a ‘Marginal Gains’ Approach to Improving Retail Supply Chain Performance

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Today’s retailers are under constant pressure to adapt their business strategies to meet ever changing consumer demands whilst at the same time improve the day to day performance of their supply chain operations. This blog will discuss how adopting a ‘marginal gains’ approach to implementing a B2B environment can help improve the overall performance of retail based supply chain operations. The retail industry has undergone a significant transformation in recent years. I thought it would be interesting to highlight a number of key trends that will impact the retail industry in 2016. Omni-Channel Retail Continues to Become More Pervasive – Omni-channel retailing has been one of the main trends to impact retailers in recent years. The growth in adoption of online mobile retail has changed the dynamics of consumer buying patterns and retail distribution. Even though ‘brick and mortar’ stores will continue to have a place in the high street, the ability to quickly price compare online and review online product and store details is transforming the way in which consumers choose how and where to buy their goods. Retailers therefore need to be able to source goods at competitive prices as well as ensure they are working with ‘responsive’ suppliers that can work with ever changing consumer demands. Low Price, Discount Retailers Continue to be a key Growth Segment – Price is king in the retail sector and low cost ‘brand name’ products have fuelled the growth in the discount store sector. In some countries such as the UK, the quality of the store experience in some cases has taken second place to new discount stores that can offer the same goods for significantly less. The discount store concept is built on a number of key principles, especially in relation to low overheads, simplified logistics processes and finely tuned supply chain operations. To align with the low cost dynamics of the discount stores, retailers will have to provide relatively low cost methods to seamlessly collaborate with suppliers. Retailers Invest in ‘Last Mile’ Shipment Delivery Services – So called ‘Last Mile’ delivery is a key logistics related challenge for today’s retailers. Online retailers such as Amazon are experimenting with a number of new technologies, for example their drone based Prime Air delivery service, to complement their existing delivery methods. Last mile delivery is especially important in busy city centres and retailers that can find a way to deliver products efficiently to a consumer will be able to develop a strong advantage over their competitors. New Technologies Driving Improved In Store Customer Experience – Retailers are starting to leverage new disruptive technologies to improve the in store buying experience and encourage repeat purchases. The exponential growth in mobile devices has allowed today’s consumer to become more ‘informed’, not just before they enter a brick and mortar store, but while they are inside, for example doing online price comparisons before making a buying decision. To help influence the buying decision retailers will increase the use of technologies such as ‘augmented reality’ for product demonstrations and beacon location technologies to try and draw consumers into making a purchase within their stores. Improved 360 Degree Visibility of Retail Supply Chains – Retailers will continue to look for new ways to improve visibility into consumer buying patterns and supply chain operations. In fact in the retail sector, consumer buying patterns and supply chain operations are intrinsically linked. The use of big data analytics in the retail sector will continue to grow exponentially as retailers look for different ways to mine consumer related buying information and align with transaction based shipping information from supply chain operations. From analysing consumer buying patterns from loyalty card schemes through to monitoring the end to end performance of a ‘last mile’ third party logistics provider, ensuring that you have a complete 360 degree view of retail and logistics operations can literally make or break a retail business. So with these technology trends changing consumer buying habits and impacting the future operation of retail supply chains, how can retailers establish a B2B platform that supports their future business requirements and at the same time improve the overall performance of their supply chain operations? Adopting a Marginal Gains Approach to Improving Retail Network Performance Over the years many management theories have been developed to improve supply chain operations.  One of the most famous theories to be developed and indeed put into extensive practice across the Japanese manufacturing industry is Kaizen. Kaizen is a process that was initially developed to help with the continuous improvement of working practices and personal efficiencies. In a similar way, the ‘marginal gains’ theory was developed to achieve a similar effect, that is to make small incremental adjustments to a process, that collectively help to significantly improve overall performance of that process. I will go into further details on the exact details of a marginal gains approach in a future blog, but in elite sports such as Formula One Racing, Rowing, Sailing and Cycling it has now become common place. In a world where the difference between first and second, ie winning and losing, can be miniscule and as a result significant time, money and effort is placed on finding ways to get an advantage on the competition. If you don’t evolve and improve your performance then you will get left behind and the same happens in business. The marginal gains theory originally came from British Cycling, masterminded in the build up to the Beijing Olympics by their Performance Director, Sir Dave Brailsford. Brailsford now runs the incredibly successful Team Sky. In summary, the principle that Brailsford introduced was that if you could improve every variable underpinning or influencing your performance by just 1% then cumulatively you get a significant performance improvement or in the case of the British Cycle terms, an “aggregate of marginal gains”. The British Cycle Team has examined everything that impacts on bike speed and systematically looked to make improvements to equipment, technology, rider preparation, fitness, rider mindset, coaching and so the list goes on. The trick is being able to identify all these key variables and then from a marginal gains point of view being able to act on them in some way so as to make improvements and strive for performance excellence. Let me now discuss how this approach can be applied to a supply chain environment and in particular developing a B2B network to work seamlessly with trading partners around the world. B2B networks are incredibly complicated and many companies are unable to establish full B2B capabilities from day one. A better approach would be to take a step by step approach, ie onboard all trading partners to a single network first and ensure you can trade electronically with them. Then look at improving the people to people or collaboration across the supply chain, then look at automating specific business processes such as invoicing and perhaps introduce tools to provide end to end visibility. The introduction of each additional piece of functionality could be considered as taking a marginal gains approach to improving the overall efficiency of a B2B network and I have summarised this approach in the diagram below. Retailers can certainly benefit from adopting a marginal gains approach to improving their supply chain operations and given that trading partner engagement is a key part of today’s retail industry I thought for the purposes of this blog I would expand on how companies can use collaborative B2B solutions to improve trading partner engagement. I will expand on the other five improvement areas in a future blog entry. As discussed earlier, the retail industry is becoming increasingly omni-channel in nature and retailers are beginning to adopt ‘mobile first’ strategies to appeal to today’s consumer. Ensuring that store shelves remain full whilst at the same time trying to increase the number of inventory turns and improve service quality is becoming a difficult area to balance. Key to this is ensuring that retailers are able to work seamlessly with trading partners, whether suppliers, logistics providers or financial institutions. A recent OpenText sponsored study with IDC Manufacturing Insights found that many CPG based suppliers had a relatively low adoption of B2B technologies. In fact 94% of CPG companies that responded to the study said that they traded electronically with less than 50% of their trading partners. Anything that can help automate their business processes will help to strengthen the relationships with their customers, namely the retailers. Exchanging transactions electronically with trading partners is only one part of the equation, the other part is ensuring that you have a suitable environment for managing the people to people interactions across a supply chain. Retailers, and in fact companies in many other industries, face a constant challenge to manage their trading partner communities effectively and there are a number of issues, for example: There is no single source of supplier contact information Minimal automation of supplier setup and registration Continuing need to onboard suppliers faster, especially when entering new markets Reduce overall supplier onboarding and associated management costs Monitor supply chain risk & performance Overcome ERP and Master Data Management Integrity issues Embracing legal and regulatory compliance issues OpenText Active Community is an enterprise wide collaboration platform that helps companies improve the way in which they engage or collaborate with their trading partner community. By providing a web based collaboration platform that allows suppliers to update their own contact information as and when required helps to ensure that you can reach out to a supplier community in a more efficient manner. At the end of the day if a supplier wishes to do business with a retailer then it is in their own interest to at least make sure they are contactable. Active Community not only allows companies to keep up to date contact information about each and every supplier, it also provides a platform to send out regular communications to a trading partner community. We will be delivering a webinar in the near future which will go into more details about the key technical features of Active Community, but essentially the cloud based platform provides two key capabilities that allows retailers to collaborate effectively with their trading partner community: Supplier Registration: automates and accelerate the setup of new suppliers. Retailers will typically have hundreds or thousands of suppliers located in different parts of the world and ensuring that they can be onboarded as quickly as possible is important. Simplifying the supplier registration process helps to: Centralize the supplier management process and helps to simplify ongoing management and maintenance of a supplier community Reduce the time and cost associated with executing supplier registration processes Accelerate time to market which in turn improves market competitiveness and increases sales opportunities Reduce data errors by registering suppliers through an online collaborative approval process Information Management: helps to ensure that supplier information is available from a central hub and is kept up to date. It also allows suppliers to be segmented as required, for example which suppliers are EDI enabled, which suppliers are receiving purchase orders electronically etc. Providing a 360 degree view of supplier related information offers a number of benefits: Provides a holistic view of supplier information from a single contact database. Offers a fully configurable platform to reflect one or many business requirements as desired by a hub Improve data control by enabling the governance of self-service access to supplier information Synchronize data with back-office systems such as ERP and CRM Today’s retailers are under pressure to reduce costs and at the same time adapt their business models to meet constantly changing consumer demands. Adopting a marginal gains approach to managing a B2B environment and the associated trading partner community can help to better align a retail operation to the needs of the consumer market. Improving trading partner engagement is only one part of developing a marginal gains approach to establishing a B2B environment to support a business and I will expand on this concept in a future blog entry. In the meantime if you would like further information on Active Community then please visit our website.

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ON DIGITAL-First Fridays: It is a Network, Not a Chain

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In the digital world the supply chain is not a chain, it’s a network. The network is made up of connections between businesses, suppliers, partners, and customers. The customer sits at the hub of this network, driving the supply chain, assembling goods and services from a variety of vendors. Participation is plug-and-play, with suppliers filling in gaps to deliver satisfying customer experiences. The customer experience is really only as good as the supply network that supports it. The “value chain” of the past has been replaced by the consumer’s “whole-life platform”. As part of this platform, consumers expect mass customization, same-day delivery, dynamic pricing, and real-time visibility. All of these expectations are impacting today’s supply chain (which is really a network). The full potential of Digital cannot be realized without reinventing the supply chain. In the digital world, supply networks are flexible, with fully integrated end-to-end processes and commerce. Low-cost suppliers and digital manufacturers have agility built into their production lines. Operations can scale rapidly—at a global level—so they are digitalized and run in the Cloud. New channels are used to serve new markets. The entire network is enriched through analytics and the Internet of Things (IoT). There is visibility at all nodes in the graph. Analytics move beyond contributing to supply chain optimization, revealing customer preferences and new paths to value. Better decisions can be made, so that better products and services can be delivered, faster. The IoT will streamline the exchange of data and commerce across the network, with Business-to-Business (B2B) integration operating as the collaborative platform for managing global business transactions, securely and compliantly. Every high-performing supply chain is essentially a dynamic digital network. Over the next few years, more than half of the Global 2,000s will re-design their supply chains into networks to support digital business. The IoT will play a central role not only in creating wired, intelligent, and instrumented supply networks, but also a global, connected network. I’ll examine how in more detail my next post in this series. For more thoughts ON DIGITAL, download the book.  

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Enterprise Challenge #41 Only 182 of my 360 Degrees are in Focus

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Like so many words in the English language, the word visibility can mean different things depending on the context. The Oxford Dictionary defines visibility as the “state of being able to see or be seen.” For example, when we see a weather report, visibility is the distance at which objects can clearly be seen. But what does it mean when discussing the supply chain? In the supply chain context, we can “see” visibility in a couple of ways to support the goal of driving a more efficient supply chain. Supply chain visibility is the ability to see what is happening now—to know the status of each and every order, shipment and invoice—especially when the status is ‘red’ and needs risk mitigation, or if there is an untapped opportunity to pursue. This visibility allows an enterprise to make quick adjustments to keep their supply chain moving. For instance, a manufacturer in Detroit, Michigan can send a purchase order to its supplier in Japan, receive an electronic document that the item is out-of-stock, and immediately react by sending the purchase order to an alternative supplier in Brazil – all in just minutes. Armed with this information, businesses can effectively manage bottlenecks, plan for delays, and proactively manage customer expectations. In short, they can resolve issues before they have a negative impact on business performance. Without this visibility, it could take days to realize your stock of an item is about to be depleted with no replacement on order – resulting in lost sales because of disrupted production schedules or failure to meet customer demand. This scenario assumes digital exchange of information to speed transaction flow and enable automation. That is what OpenText does. We provide solutions that enable the digital exchange of information between buyers, suppliers and other supply chain partners. OpenText B2B Managed Services handles the complexity of connecting to trading partners of all sizes and digital capabilities. And OpenText Trading Grid—the largest B2B network in the world—provides the Cloud foundation for global information exchange. Supply Chain Visibility is also the ability to look back and analyze performance over time (which, in turn, provides the foundation to look forward and predict). Buying organizations need visibility into frequency of order errors or late deliveries by suppliers. These metrics provide the information needed to help identify potential problems in the supply chain and make adjustments. For example, consider a reliable supplier who has more recently been missing delivery deadlines and sending incomplete orders. The supplier’s change in behavior may indicate a need to change terms with the supplier or, if the behavior continues, may indicate the need to consider alternative suppliers. Without this visibility, you could miss a seasonal sales opportunity – again resulting in lost sales – because you are relying on a supplier who has trouble meeting deadlines. To help with this visibility, OpenText has added supplier performance metrics to OpenText Active Orders. Active Orders enables digitizing and automating supply chain processes with small and medium-size suppliers that are not ready or able to implement traditional EDI or B2B integration through a simple, intuitive web portal. Data from digital trading partners can also be captured, giving you a complete view of all suppliers. With metrics on supplier performance, manufacturers are able to manage underperforming trading partners—ultimately mitigating risk to business performance—and determine the most strategic trading partners to do more business with.  

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New Resolution for Retailers in 2016: Take Charge of Your Chargebacks

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How many errors and chargebacks are going through your distribution centers or system unchecked during this holiday season? There’s a significant chance it’s more than you expect. Consider the cost incurred when shipments arrive on incorrectly stacked palets, ASNs arrive invalid or late, and cartons have unscannable barcodes. All of this can be costing you millions. Based on our insight into the retail industry and speaking with our customers, on average 2% of your retail sales revenue is offset by chargebacks. Say, for example, your annual sales revenue is $5 billion and 50% of that revenue is earned during the holidays. That means you are experiencing $50 million in errors and chargebacks every year. What’s your estimated total? If you don’t have a complete deduction management process then it’s likely to be much higher than your actual amounts. Some retailers have in-house or legacy processes to identify and assess their chargebacks while others don’t have an established process at all. In both cases, it’s extremely likely that errors are slipping through your distribution centers or systems. Not only are the errors unaccounted for but there are missed opportunities to notify vendors and avoid similar errors for future shipments. The benefits of a complete deduction management solution go far beyond the cost offsets. Better communication with vendors means a better working relationship and avoidance of similar errors down the road. By combining communication with more timely and accurate data, retailers can achieve better transparency with their vendors. This can further strengthen the retailer-vendor relationship and ensure that products arrive on floors without any cause for delay. Improve your vendor compliance program in 2016. See how Stage Stores achieved both compliance and collaboration with its vendors in a recent OpenText Success Story.

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