Supply chain leaders were already being tested in recent years by volatile market trends, rapidly changing customer demands, and new and emerging risks to supply chain disruption. The new reality of the global pandemic has introduced even more challenges for supply chain management. Although making use of agility and operational business insights to build supply chain resilience has long been a priority for CPOs, CFOs, and supply chain executives, the pandemic has increased the urgency: 31 percent of CFOs indicated supply chain issues rank as one of their top three concerns related to the COVID-19 outbreak (PWC).
And it’s no surprise that most of these challenges are data driven. It’s only when you have end-to-end insights into your suppliers, product, material or customer data that you can get a better understanding of macro demand trends, enable rapid identification of alternate suppliers, improve collaboration, and automate onboarding for faster time-to-market.
Here are five data-driven supply chain challenges that were heightened by the global pandemic.
1. Lack of Visibility Impacts Agility and Decision Making
Supplier data is often incomplete, outdated, and fragmented across dozens or even hundreds of systems, such as supply chain management and supplier relationship management (SRM) software, dozens or hundreds of Enterprise Resource Planning (ERP), financial and accounts payable systems across your product lines and regions. Valuable data is hidden in spreadsheets, databases, and remote file stores, each with its own structure and data model. This critically valuable asset is piling up in each business unit, every procurement team, and all regional offices, often making it impossible to access a consolidated, complete, trusted view of all your suppliers and sub-suppliers and act quickly.
- 65% of procurement leaders have limited or no visibility beyond their tier-1 suppliers. (Deloitte)
- 76% of CFOs agree that without “one version of the truth,” their organization will struggle to meet its business objectives. (Accenture)
More than ever, procurement and finance rely on a trusted 360-degree view of their supply chain and across their supplier network. To build supply chain resilience, they need automated workflows that help identify and onboard alternate suppliers quickly. A centralized access improves visibility and increases transparency into your supplier data for a trusted understanding of all relationships and improved supply chain insights and decision-making.
2. Poor Data Quality Data Costs Millions
If the data is incorrect, incomplete, or outdated, not even the best supplier information management solutions can help. In fact, poor supplier data quality can cost millions, in terms of poor business decisions, ineffective operations and logistics, missing procurement information, and significant opportunity cost.
- 93% of CPOs rate cost reduction as a priority for their organization in the next 12 months. (Deloitte)
- 60% of CPOs cite poor master data quality, standardization, and governance as the biggest 5 challenges to procurement.(Deloitte)
Automated data quality checks embedded in your supplier management workflows effectively improve the quality of supplier data while reducing manual workload and costs.
3. Manual Processes Slow Time to Market
Using ineffective and inefficient manual processes to manage supplier data is usually accompanied by a lot of redundant workloads and results in a significantly slowed down time to market. If onboarding a new supplier takes weeks or months, that represents tangible opportunity cost and lost business.
- 68% of CPOs cite improving and automating procurement processes as a top priority for their organization. (Bain & Company)
- 60% of companies use no tools or are relying on improvised MS Office tools for workflow assignment and supplier relations management. (Bain & Company)
Automating supplier and product information management workflows reduces the time it takes to onboard new vendors by up to 80% and improves time to market for new products by up to 10x with streamlined and automated supplier onboarding, workflows, and self-service.
4. Missing Governance Standards and Lack of Transparency Increases Risk
Supply chain risk factors and uncertainty have increased over the past couple of months. The ability to assess the risk for a specific supplier while also monitoring their compliance or performance is an ongoing pain point for some supply chain executives.
- 93% of CPOs rated risk reduction as a top priority for their organization. (Deloitte)
By making compliance a factor when onboarding new suppliers, you can mitigate supply chain and vendor risk with a 360° view that allows you to monitor and reduce supplier risk and access alternate suppliers in case of a supply chain disruption. By fueling all supplier-facing applications, business intelligence tools, and analytics programs with trusted, governed, up-to-date supplier data, your finance, legal, and supplier relationship management teams can more easily monitor and analyze their suppliers’ risk and compliance.
5. Sustainable Sourcing and Traceability are Key for Consumer Trust and Loyalty
Another critical factor to remember is how to manage consumer expectations as they make their purchase decisions. Leading brands like Unilever and retailers like PVH are focusing their supply chain and marketing efforts around ecological and social sustainability and traceability, as they see this as an important driver for long-term success. Responsible, transparent sourcing and sustainability will become more and more of a factor when onboarding new suppliers.
- 63% of consumers refuse to buy products and services from companies they do not trust as supply chain traceability is a key criterion for them.(Accenture)
- 99% of CEOs believe sustainability will be important to the future success of their business. (Accenture)
Gain consumer trust by providing trusted and relevant product, ingredient, and sourcing data to create a unique and seamless brand experience and make compliance, transparency, and sustainability a factor when onboarding and monitoring suppliers.
Want to learn more about digital commerce platforms and supplier relationship management? Then register for our Digital Commerce and Supply Chain Summit, or download a copy of our eBook, “Unleash the Power of Supplier Data,” to discover how a 360º view of your supplier data can save you millions of dollars, year after year.