3 Essential Strategies for Gaining Business Value Through Collaborative Supply Networks
Supply chain resiliency and sustainability are top priorities for CEOs today. But to achieve these goals, corporate leadership must spur a shift from internally focused supply chains to collaborative supply networks.
Resiliency, which is the ability to withstand supply chain shocks and bounce back quickly, has become the most important requirement for supply chains. Sustainability has also become critical, given the negative impact of greenhouse emissions, shifting consumer preferences, as well as government regulations around the globe. And even with these priorities, the need to balance costs, services, and inventory have not gone away.
Why collaboration networks matter for supply chain resiliency and sustainability
The adage that ‘none of us is as smart as all of us’ is true in the realm of supply chains. No single company is vertically integrated or isolated enough to be able to withstand the barrage of macro-economic challenges that are happening today. Inflation, pandemics, railway strikes — the supply chain disruptions keep on coming. Historically, the biggest driver for companies in the supply network has been to drive cost efficiencies and maximize service levels, all culminating in profits for the stakeholders. Supply networks have typically competed with each other to gain market share or margins.
However, there are areas where these competing supply networks can gain shared value for themselves and their ecosystem partners. In certain areas, such as ensuring ethical supply chains, supply networks may even collaborate with each other for better outcomes that no single supplier or manufacturer could achieve on its own. For instance, two major consumer packaged goods (CPG) manufacturers can work together to ensure suppliers deep within their supply chains are not utilizing child labor.
Coupa’s comprehensive approach to collaborative supply networks
Coupa’s Business Spend Management (BSM) platform enables enterprises and their suppliers to become agile, resilient, and sustainable.
There are three main components to the platform:
- Transactional capabilities: A core transactional layer that allows transactions and collaboration across suppliers and buyers
- Power user applications: A comprehensive suite of power user applications such as Supply Chain Design and Planning, Third Party Risk Management, and Strategic Sourcing to orchestrate and optimize processes
- Artificial intelligence: A Community.ai layer that analyzes community data to provide business insights at the point of making decisions
As recently announced, Coupa has been recognized as a leader in the Forrester WaveTM: Collaborative Supply Networks report. The following are three capabilities that Coupa enables within their customers to become collaborative supply networks.
1. Enable visibility through collaborative and transactional processes
In today’s dynamic world, suppliers and customers must fluidly interact with their manufacturers. This requires the following characteristics:
- Speed: Rapid supplier discovery, rapid onboarding, and identity verification
- A multi-tenant architecture: So that any new technology enhancements are available to the entire network
- Scalability: Information available in the cloud with high levels of scalability and availability
These qualities in a collaborative supply network can help lower transactional costs, reduce latency, and improve supply chain visibility. When transaction costs are lower and visibility is improved, a natural next step is to ensure that the processes are resilient through improved risk management and supplier diversification.
2. Orchestrate processes across procurement, supply chain, and finance
Most companies are siloed across their procurement, supply chain, and finance departments, which can create inefficiencies and performance gaps. For example, procurement makes supplier selection decisions based on costs and other criteria such as diversity, third party risks, etc. Finance is hyper focused on payment terms. Supply chain looks at lead-times, material, and capacity availability.
Orchestration is the capability that addresses this lack of synchronization. Orchestration ensures that each of these departments maintain their autonomy of decision making but while making decisions that are synchronized and globally optimal.
A lack of orchestration can result in the following types of performance gaps and inefficiencies:
- Distorted demand signals relayed to suppliers, as demonstrated by the classic “bullwhip effect”
- Information about risks in the supplier network reaches the manufacturer through a delayed lead-time or after the disruptions have already happened.
Coupa enables collaborative supply networks by breaking down these silos through a fully connected platform. Examples of these orchestrated processes include Procure to Pay, Source to Contract, Supply Chain Design to Sourcing, and Treasury Management.
This connected platform provides a common view across procurement, supply chain, and finance and results in improved visibility and resiliency. Having a clear understanding of the cost to serve across the entire value chain also results in the ability to model CO2 emissions and set sustainability targets that can be tracked.
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3. Improve decision making through community data, AI, and machine learning
Building trusted relationships with suppliers is an imperative for success. It is essential for companies to be part of a community that contains validated and trusted suppliers with whom they can collaborate on supply chain resiliency and sustainability. When suppliers and buyers participate in transactional, collaborative, and orchestrated processes, the community generates data that is useful for all the parties involved. Given the large volumes of raw data that is available as a result, AI becomes an important tool to parse through all the information and generate valuable insights.
These insights help ensure that costs are managed, supplier risks are proactively addressed, and sustainability goals are achieved. Rather than just relying on historical data, these insights are based on real-time data and facilitates decision making at a transactional level. For example, learn more about how real-time, AI-driven commodity classification can improve business spend.
Striving for excellence
Coupa has grown to service more than 2,500 customers spanning the Americas, EMEA, and Asia Pacific, with more than 3,000 employees and more than $4 trillion in cumulative spend under management. We continue to enhance our offerings, co-innovating with customers and partners to ensure our BSM platform is not only the most comprehensive, but also provides the most value.
Coupa is built on an obsessive and unwavering commitment to making our customers successful. For us, it’s more than just customer satisfaction, it’s about customer success.
My colleagues, and the broader community at Coupa, bring our best every day to ensure that our customers are successful in realizing their goals, satisfying their company missions, and transforming their organizations. We consider the suppliers in our community as our customers and strive to provide the best user experience and collaborative capabilities so that everyone in the network gains shared value.