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Study: Customer-facing supply chain solutions improve efficiencies

Wednesday, May 17, 2017

In today’s digital supply chain landscape, electronic linkages between customers and suppliers is on the rise, and double-digit growth is expected in 2017 and beyond, according to new research released from leading B2Bi Managed Services provider DiCentral, in partnership with SAP and the Global Supply Chain Institute at the University of Tennessee (UT) Haslam College of Business.

The whitepaper, “Proactive Partnerships: Creating Supply Chain Value in the Digital Era,” helps prepare supply chain and EDI decision makers for digital disruption in the supply chain and highlights how to adopt—and adapt—digital tools to prepare for and protect against this disruption.

With the modern instant-gratification buying culture, buyers and suppliers must be in lockstep. Suppliers operate in a world of slim profit margins and tight deadlines, and late shipments for failing to follow the packaging requirements of a retailer—such as a misplaced barcode—can result in costly penalties. According to 80% of survey participants, their customers run an existing EDI compliance program, which can result in penalties, and nearly 75% of survey respondents have been subject to fines due to noncompliance. Among those respondents receiving fines, 3% report receiving fines of more than $100,000 in a 12-month period. For small- and midsized businesses (SMBs), these fines can have a material impact on profits.

From machine-to-machine communication (such as EDI) and data analytics, to cloud-based solutions and mobile capabilities, disruptive technologies are far and wide, and digital technologies are transforming the way today’s organizations operate. More and more companies are embracing these automation tools and supply chain analytics to remain competitive, reduce costly human errors and improve customer service levels.

“In today’s age of digital technologies transforming the way organizations operate, creating a digital supply chain network is a business imperative for supply chain and EDI managers across the globe,” said Thuy Mai, president and CEO of DiCentral. “We are proud of the work we have done with SAP and our mutual customers. Our partnership has helped the clients that invested in SAP ERP to be more agile and competitive in today’s digital economy. We couldn’t be happier that UT’s Global Supply Chain Institute was able to showcase the economic value proposition these clients achieved.”

According to study findings, 76% of survey participants expect growth in their electronic supplier connections up to or more than 25%. More than 75% of survey participants agree their current system can process most inbound EDI/XML connections without human intervention, and 60% of participants report business-to-business integration has enabled them to improve customer service levels.

“Technology continues to improve and evolve at a frantic pace, so companies must act now, or get left behind,” said Randy Bradley, assistant professor of information systems and supply chain management at UT’s Haslam College of Business. “Our survey demonstrates that many companies are moving in the right direction, but they need to continue to move faster.”

Although companies are embracing digital disruption with automation tools, most supply chains have a long way to go. Nearly a third of companies surveyed revealed that their trading partners are more prepared for automation EDI integration than they are. A streamlined business management software solution such as SAP Business One enables small and midsize businesses to automate in a single, scalable system. To adapt to the ever-changing marketplace, organizations are implementing SAP Business One to streamline operations from start to finish, gain instant access to company information in real-time, improve decision making and accelerate profitable growth.

According to survey participants, the top benefits of utilizing DiCentral’s B2Bi Managed Services to integrate supply chain data with SAP software include enhanced accuracy and consistency of data, improved reporting capabilities and more streamlined business processes. Using the whitepaper findings, supply chain and EDI decision makers can develop a framework for developing a stronger supply chain automation strategy using tools to keep up with competition and increasing consumer demand.

The study encompassed a quantitative survey of 80 individuals spanning numerous industries, including retail, healthcare, wholesale distribution, process manufacturing, discrete manufacturing, and consumer product goods. Seventy-five percent of the participants use SAP Business One as their ERP software.

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