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Strengthening the Links in Today's Retail Value Chain
5 Ways Cloud Technology Enhances Collaboration & Performance in the Supply Chain
Bryan Nella, GT Nexus
Retailers and consumer goods companies struggle to meet ever-changing consumer demand. Staying in-step with customers while preserving margins requires a new level of global supply chain excellence. This fast moving, omni-channel world requires multi-enterprise collaboration to orchestrate all moving parts. Multiple parties need to truly collaborate to manage the flow of data, goods and capital. Constant fine tuning is necessary to align supply with demand. For that to happen, all parties require clear visibility into a single version of supply chain truth to ensure goods are produced at the calculated cost - and sold at full margin.
Traditional tools for communicating between retailer, brand and trading partner are outdated. Many businesses still rely on spreadsheets, e-mails and phone calls throughout the transaction lifecycle.
Enter Cloud Technology
As more and more businesses embrace cloud technology, many retailers are finding that cloud-based solutions are a perfect fit for managing the global supply chain. Instead of updating 10 or 20 trading partners regarding changes in an order, a collaborative model for the supply chain allows brands to post their updates in one place, where they are viewable by the entire supply network. The process is similar to updating the status of a LinkedIn or Facebook profile - once the post is made, everyone sees it instantly.
Applying Cloud Technology to Every Day Business
Connecting the entire supply network in the cloud opens the door to new possibilities for speed, efficiency, savings, visibility and agility. Processes from planning to purchase order through settlement and delivery can be streamlined better when all parties are connected in the cloud. Here are five examples of how:
1. Speed through Factory Floor Execution: A manufacturer uses a single platform that handles all of its customers' requirements with regards to automated packing, scanning and shipment building to ship store ready cartons or facilitate fast cross-docking at its customer's DC. At the same time, they improve packing accuracy and minimize chargebacks. Through the cloud, its factories have the tools to accurately pack customers' orders, print or order compliant carton labels, and generate a customer compliant inbound shipping notice.
2. Full Margins by Eliminating Unexpected Delays: A retailer's sourcing department is automatically informed in real time of any significant delays anywhere in the goods sourcing process. Whether a delay originates in the availability of raw materials, during production or transportation, the brand is instantly alerted. The delay is identified and the brand has enough time to find the best possible solution to preserve a full margin delivery.
3. Flexibility and Communication to Improve Performance: Prior to each fashion season a clothing provider communicates its capacity and raw material needs with suppliers and mills. Each supplier validates whether it can meet that need or identifies lack of coverage early. At time of PO issue, suppliers are prepared and all connected parties are instantly updated in case of changes.
4. Handle More Business without Adding Resources: An outdoor apparel brand handles $500M in sourcing settlements with one person in accounts payable due to process and workflow automation. A leading global footwear brand deploys a paperless and touchless straight-through process for transactions to allow payment approval in 48 hours. A mid-size consumer goods company replaces all letters of credit with an open account platform without adding any staff to handle the supporting documentary process. Not only did they save their companies a lot of money, they helped their suppliers save as well.
5. Capital Optimization: A global retailer provider utilizes a self-funded early payment program in the cloud and places information onto customs invoices to lower its duty payments. Using the cloud-based system, the retailer obtains discounts from suppliers in exchange for delivering payment within five days from shipment and pays duty on a lower invoice value. Suppliers obtain capital they need within days at rates 20-30% lower than financing available to the supplier locally.
Tying together all retail value chain parties throughout the transaction lifecycle has always been a hassle. A typical sourcing transaction can involve anywhere from five to fifteen different parties – in different countries, languages and time zones. Traditional methods of communicating are slow and inefficient. Cloud technology enables a collaborative model for the supply chain to enable all parties to communicate and transact in real time. With the right strategy, technology and support, the cloud can be a strategic differentiator in the retail supply chain.
Bryan Nella, Director of Corporate Communications, GT Nexus
Bryan Nella is Director of Corporate Communications at GT Nexus, the world's largest cloud-based supply chain network. He has more than 12 years of experience distilling complex solutions into simplified concepts within the enterprise software and extra-enterprise software space. Prior to joining GT Nexus, Bryan held numerous positions in the technology practice at global public relations agency Burson-Marsteller, where he delivered media relations and communications services to clients such as SAP. In previous roles he has worked with clients such as IBM, MasterCard and U.S. Trust. Bryan holds a BA in Mass Communications from Iona College and a MS in Management Communications from Manhattanville College.