Supply chain visibility is crucial for retailers dealing with the twin challenges of volatile demand and spiraling costs. Disruption is the new watchword as retailers have seen customer demand increase (46%). At the same time, demand has become less predictable (31%). At the other end of the retail supply chain, suppliers are more expensive (53%) and less reliable (30%). In this environment, supply chain integration is more critical than ever.
Recently, OpenText and IDC conducted global research to understand the role B2B integration plays in building agile and resilient supply chains. The results from the retail sector revealed that supply chain visibility, alongside supply chain integration solutions, are significant weapons in this battle.
Cost is not the only benefit of retail supply chain integration
Reducing operating costs remains the most important benefit retailers receive from their investments in supply chain integration. However, increased market volatility requires greater business agility. So, today retailers are also looking for business-led benefits such as faster time-to-market or improved customer satisfaction when looking for supply chain integration.
|Reduced operating costs||49%||41%|
|Faster time to market||46%||37%|
|Improved inventory turn rates||37%||30%|
|Improved data quality and accuracy||37%||31%|
|Improved customer satisfaction||35%||34%|
It’s interesting to note just how much more crucial faster time-to-market is for retailers compared to the average of all industries (46% vs. 37%). In fact, improved inventory turn rates (37% vs. 30%) and data quality and accuracy (37% vs. 31%) also score well ahead of the overall business average. This reinforces the key finding of this research: retailers are focused on supply chain visibility.
You can’t manage what you can’t see
In the retail sector, the modern global supply chain is complex, and that complexity is increasing. Retailers understand that effective supply chain integration is essential to managing complexity. However, when we asked about the barriers to successful supply chain integration, the depth of that complexity was stark.
|Global, extended supply chains, elongated lead times||27%|
|Complex supply networks with multiple tiers||26%|
|Multiple sales channels||25%|
|Complex integration of multiple IT systems||24%|
|Lack of budget to implement process changes||24%|
|Lack of trust in trading partners||23%|
|Disparate processes across divisions and brands||21%|
|Frequent new products and increased product obsolescence||21%|
|Complex products and product ranges||20%|
|Too complex integration of multiple IT system||20%|
Retail supply chains have become multi-tier, multi-layer digital networks of trading partners, processes, and systems. Achieving high levels of visibility is now the top priority for retailers. The basic, manual activities they once used to gain supply chain visibility no longer work.
|Better visibility of inventory||32%|
|Improved collaboration with suppliers||28%|
|Improved integration of planning tools||26%|
|Better use of demand data||26%|
|Better visibility into supply chain execution||24%|
The drive for supply chain visibility reaps benefits
Retailers have already made significant investments in visibility and believe they are making good strides in that direction. Only 4% say they have no visibility into their supply chain operations. Interestingly, almost one in five had reached the most advanced stage, using capabilities such as control towers and advanced analytics.
Supply chain integration is the foundation for expanded and advanced visibility. For these retailers, that translates into seamless and secure data flows between all trading partners in the ecosystem.
More information translates into improved business performance
Our survey shows that the more information types that a retailer digitally exchanges with its partners, the better the company’s business performance. This result was especially pronounced when it comes to business documents that underpin greater visibility. Retailers saw significant business boosts by digitally exchanging price information (86%), functional/order acknowledgements (86%) and shipping status (83%).
|Currently exchange digitally||Improvement to supply chain performance|
|Bill of Lading||32%||64%|
|Logistics Service Request/Response||31%||79%|
|Request for Quote||29%||80%|
|Payment Remittance Advice||28%||79%|
|Advanced Shipping Notice||28%||79%|
|Notes or other unstructured information||18%||64%|
The adoption of supply chain integration accelerates
Retailers understand the need to automate and optimize their supply chain processes. The digital connectivity offered by B2B integration platforms – such as OpenText Trading Grid [Link] – allows for end-to-end visibility across global and extended supply chains.
Our research shows that over 50% of retailers already use automated supply chain integration when dealing with customers. This figure will rise to three-quarters of all B2B transactions within three years.
|Manual and unstructured communication (paper, fax, phone, email, file sharing, etc.)||21%||11%|
|Manual but structured communication (web EDI or other portal solutions, web forms, smart forms, etc.)||25%||14%|
|Automated message-based integration (Direct EDI integration, Value-Added Networks)||29%||39%|
|Automated real-time system integration (API-based synchronous integration||25%||36%|
Implementing a Cloud-based supply chain integration platform
Our research investigated the underlying digital technologies that enable B2B integration. For 67% of retail companies, cloud represented the most critical technology. Improved supply chain visibility (53%), scalability (47%), compliance (44%), access to better system features (46%) and the latest software versions (48%) all featured highly when respondents spoke about the benefits.
The cloud offers an excellent foundation for building effective supply chain integration capabilities. You benefit from a high-performance and scalable platform to connect with trading partners worldwide. A Cloud-based supply chain integration solution – such as OpenText Business Network Cloud – delivers:
- A single, unified platform to connect all types of trading partners
- Rapid and effective onboarding and management of trading partners anywhere in the world
- Any-to-any integration across systems, people, and things
- End-to-end visibility across your entire supply chain
- Advanced AI and analytics capabilities for improved decision-making
- High levels of automation and data-sharing across a wide range of business and supply chain processes
- Comprehensive self-service capabilities and fully managed services
Retailers are embracing supply chain integration. However, our research shows that work still needs to be done to allow retailers the full benefit of an effective cloud based B2B integration platform. OpenText Business Network Cloud offers retailers the integration capabilities to overcome the challenges of increasingly global and complex supply networks and trading partner communities.
Read more about how Cloud-based B2B integration builds agility and resilience in retail supply chains or read the full IDC report to learn more about the state of integration in other key industries.