Top-5 Benefits of Private Supplier Communities
By Nick Roquefort-Villeneuve, Head of Marketing — Amalto Technologies and Ondiflo
Great communication among business partners is key. Well, isn’t it the case in all relationships? The problem is that bad communication with your trading partners cannot be improved in the same way communication with your spouse within the safety of a therapist office can. In fact, you cannot sit your buyer or your vendor across from you and look into each other’s eyes, no talking allowed for three to five minutes, even if it suddenly gets awkward. In case the silence becomes uncomfortable, you certainly cannot choose to play a song that’s pleasant to the both of you or meaningful in terms of your relationship, and continue holding eye contact until the song ends… You just can’t.
Technology advancement pertaining to back-office operations and processes is the solution trading partners have to communicate efficiently with one another. Supplier communities, in particular, have contributed to provide enhanced communication, better exchanges and consequently sure competitive advantages to buyers and their suppliers.
As a buyer, how would like to be able to exchange business documents with your suppliers in a private, secure and customized environment? This is what the utilization of a private supplier community provides. It does indeed allow an organization to quickly, easily and safely exchange business documents directly between its back-end systems an all its suppliers. The private community is enabled by a private and dedicated cloud infrastructure, which allows buyers and their suppliers to operate their essential business processes more efficiently and cost-effectively.
• Benefit #1: Enhanced Process Automation
Processes that would usually require some form of manual intervention (email, phone, fax) associated to the sending and treatment of purchase orders and invoices are now automated, so documents can be sent and received directly from and by each trading partner’s back-office (ERP system). Thus, buyers send purchase orders directly from their ERP system. Suppliers receive purchase orders and send back confirmations, advance ship notices (ASNs) and invoices either via a portal or local light client software. Buyers receive the confirmations, advance ship notices and invoices directly in their back-end system. Ultimately, automation leads to faster fulfillment and payments.
• Benefit #2: Broader Transactional Scope
Supplier communities or portals allow smaller suppliers to automate routine supply chain execution transactions such as purchase orders, ASNs and invoices. In other words, access to a computer and an Internet connection enables the supplier to connect to the portal with much ease and minimal training and investment. Moreover, supplier communities give buyers an opportunity to fulfill their social responsibility by maintaining business relationships with local, smaller suppliers.
• Benefit #3: Real-Time Access to Statuses
In a way, a supplier portal is like being granted access to the buyer’s ERP system. Thus, suppliers can check at all times what the status of an expected payment is, which considerably decreases the volume of calls the supplier’s collection department needs to make to the buyer’s AP department to inquire about payment statuses, hence saving time and efforts.
• Benefit #4: Real-Time Reporting
Supplier communities provide buyers and their suppliers with access to the same data (KPIs, etc.), systematically updated. Such a high degree of visibility enables all stakeholders to make adjustments, so their collaboration can improve, and the risk of dispute be quasi-eliminated.
• Benefit #5: Enhanced Agility
Requirements are always evolving. For example, suppliers may change product references and buyers may elect shipments to be made to new distribution centers. A supplier community provides an online resource for buyers to communicate changes (contact details, routing guides and business processes) to the supplier community.
Hubs have been created, so that individuals and organizations that share the same activity or interest would be able to exchange and transact seamlessly. Private supplier communities provide suppliers and buyers with the platform and associated tools they require, so they can automate processes that intrinsically matter to their respective bottom-line.
