As an advisor to leading Fortune 500 enterprises, we’ve helped many companies transition from linear, sequential value-chain models to interconnected, intelligent, and digital ecosystem-led integrated business models. In my experience, companies that successfully navigate this shift can create lasting value through seamless and simplified collaboration. And the most successful do this by leveraging network solutions that help them automate and modernize what had been disintegrated and siloed business trading networks. A recent McKinsey report quantifies my observations: “The integrated network economy can experience a global revenue pool of $60 trillion by 2025.”
While some companies can readily embrace the power of network solutions, we’ve seen many others face challenges on their way to achieving successful carrier and partner collaboration. This blog will outline some common challenges and discuss how network solutions can help streamline and automate carrier and partner collaboration.
Key challenges shippers need to overcome
We all know that the unavailability of critical materials and components, inventory blind spots, siloed logistics management, inadequate technology, and disruptions in the supply chain are some of the biggest hurdles in supply chain planning and operations. If overlooked, these challenges can seriously impact the business, leading to decreased sales, a shrinking customer base, and a loss of ROI across the company.
Combatting these challenges requires the seamless flow of information across supply chain operations. Generally speaking, supply chain partners use channels such as emails/SMS, Carrier Collaboration Portal (CCP), and EDI/interfaces, among others, to communicate with the business ecosystem. However, relying solely on these communication channels can lead to multiple challenges due to a lack of in-depth visibility into the supply chain and across business ecosystems, resulting in reduced customer satisfaction and slow response to market trends.
We’ve outlined below three of the most common challenges shippers face in carrier collaboration:
- Siloed logistics operations: Ineffective communication is one of the major causes of siloed logistics operations. As the global supply chain grows with the involvement of multiple partners and their unique processes, it becomes difficult for shippers to maintain a record of all the ongoing carrier and partner activities.
- Complex and non-scalable integrations: Some shippers use carrier selection mechanisms to assign a suitable carrier for their businesses. Others rely on third-party logistics that subcontract loads to other carriers or rely on direct integrations, such as EDI, CCP, and emails. These methods are not only time-consuming but also resource intensive. Sometimes shippers must provide carrier portals and bear additional expenses to ensure seamless communication.
- Lack of synchronization within the supply chain: Supply chain disruptions are causing havoc within the industry. The impact of these disruptions is massive and can bring entire economies to a standstill. In addition, businesses within the supply chain struggle with complex communication loops, siloed operations, and an evident disconnect between the physical and information flow.
Role of Business Networks in carrier collaboration
To mitigate these challenges, suppliers dealing with high volumes of shipping operations are shifting from traditional on-premise models to simplified network-centric solutions to track the movement of goods and data from the point of origin to its point of consumption.
Network solutions enable trading partners to plan, execute, monitor, synchronize, and optimize all business operations and events across their extended supply chains, wherein they can avail services based on their requirements and no longer worry about carrier integrations and collaborations. Such solutions help optimize supply chain management processes, automate repetitive tasks, improve freight order lifecycle management, and enable extensive material tracking while providing a more efficient flow of information. This gives enterprises more revenue-generating opportunities and happier end-customers.
Let's dive deeper into the benefits of network solutions:
- Cost reductions: Outsourcing integrations is a great way to optimize resource utilization, reduce operational costs, increase productivity, and free up FTE capacity through the complete digitization of manual supply chain processes. It enables you to market your products faster and react proactively during supply chain disruption.
- Quick integration capabilities: Network solutions bring together disparate systems, people, and processes. The integration capabilities create a single source of truth for all stakeholders, eliminating connectivity issues and miscommunication. They can connect with your critical applications, including enterprise software, legacy systems, and third-party applications like Uber Freight, enabling efficient information flow across the entire supply chain.
- Power Intelligent Operations: Network solutions play a crucial role in transitioning traditional supply chains into intelligent and technology-enabled value chains. From monitoring global shipments across modes of transport to getting instant alerts in case of deviation from the plan, network solutions provide intelligent insights across the business partner ecosystem to increase supply chain resilience and mitigate supply chain risks.
An overview of the market-leading network solutions
Many enterprise software vendors have developed solutions to help organizations move towards network-centric approaches. As it can be challenging for businesses to understand the differences and commonalities across these solutions, we’ve included an overview of some market-leading digitally enabled network-centric logistics solutions for seamless carrier collaboration.
Elemica's centralized supply chain platform digitizes, automates, and streamlines supply chain processes. It helps organizations organize and share critical data and documents through a centralized platform. The platform provides one connection, transaction, and trading partner at a time to help businesses unlock more value through the digitization and automation of supply chain operations.
Uber Freight is a popular logistics and transportation platform that acquired Transplace, a cloud-based transportation management solution, to enable shippers and carriers to take control of their freight and deliver on their goals. Backed by innovative technology and a team of domain experts, Uber Freight provides quick assistance to shippers for moving loads from one location to another by assigning them reliable carriers from its network. Moreover, it provides actionable insights, instant carrier quotations, optimization strategies, and transparent pricing to the shippers. It also unlocks the potential to better plan and execute freight by giving visibility into shipments, key performance indicators, and weather and traffic analytics.
IBM Sterling Supply Chain Business Network
IBM Sterling Supply Chain Business Network is a cloud-based business network that simplifies collaboration across your supply chain. It leverages IBM Blockchain and artificial intelligence (AI) insights to provide multi-party B2B transaction visibility. It automates B2B transactions with your customers, suppliers, and trading partners and yields an average 3-year return on investment (ROI) of 308%.
BlueYonder Logistics Network
Blue Yonder's logistics network provides a digitized ecosystem that connects various logistic services producers and consumers across the entire supply chain. It follows a market-driven approach to deliver critical supply chain information promptly and transparently.
SAP Business Networks for Logistics
While we see the robust and advanced capabilities of each of the above solutions, SAP Business Network for Logistics stands out due to the multiple advantages it offers above the rest. First, it seamlessly integrates by design with SAP and non-SAP systems via IDocs, Rest Service, and OData Read Service API. SAP takes it further by providing out-of-the-box integrations with SAP Transportation Management System (Freight Collaboration option), Yard Logistics (Dock Appointment Scheduling), SAP ERP, and third-party solutions such as p44 and UberFreight. In addition, shippers can take advantage and reduce carrier onboarding costs by leveraging SAP's free-of-charge service. Whenever shippers' carriers are off the network, SAP onboards them to the solution.
SAP Business Network for Logistics is an innovative solution that provides transparency, resiliency, and sustainability to the business. It brings together various business partners for inter-company collaboration and to help enterprises transform their disintegrated and siloed business trading networks into a unified network. It offers intelligent insights to provide an overview of global logistics, including all freight activities and shipment routes across multiple modes of transport. It also facilitates data sharing between various supply chain partners at a global level. This helps to gain a common understanding to optimize multiple processes for cost reduction and improved capacity utilization.
SAP Business Network for Logistics drives supply chain agility and resilience through a comprehensive set of functionalities that include:
- Freight collaboration: Freight collaboration is one of the major functionalities of SAP Business Networks for Logistics. It helps business partners connect on a collaborative network to manage transactions and share insights across the value chain. Shippers collaborate and communicate on the network and receive and respond to freight quotations, tendering, and invoicing from a vast network of carriers. Additionally, freight collaboration’s key features include dock appointment scheduling, shipment execution, document exchange, and more.
- Global Track and Trace: SAP Business Network Global Track and Trace option is a highly configurable cloud tool to improve supply chain transparency, resilience, and sustainability. The solution automates businesses' entire sales order operations and helps them gain actionable insights to navigate supply chain turbulence. It provides awareness beyond milestone reporting with real-time geolocation tracking. It provides rule-based triggering that includes follow-up activities, such as sending emails or updating the backend systems on the occurrence of certain predefined conditions, including delay or damage to goods. It also includes sales order fulfillment monitoring, continuous tracking of goods in transit with details of processes and planned/unplanned event reporting.
- Material Traceability: SAP Business Network Material Traceability backed by blockchain allows businesses to trace multi-ingredient products. It offers an end-to-end traceability feature to capture and analyze the batch genealogy of goods, from raw materials to finished products, and gain real-time dynamic visualization to analyze batches or serialized products by extensible properties and attributes.
Innovation is the key: Streamlining supply chain collaboration
According to Harvard Business Review, around 50% of Fortune 500 companies have either gone bankrupt, have been acquired, or closed operations due to digital disruption. In today's complex supply chains, cross-company visibility and logistics communication have become important to improve end-user service levels. In my experience, network solutions play a pivotal role in transforming traditional supply chains into modern, intelligent, and autonomous value chains. These solutions help businesses increase their operational efficiency, expand supply chain visibility, and promote effective shipper-carrier collaboration, reducing the probability of having disputes with carriers.
If SAP applications dominate your organization's application landscape, the choice is simple. SAP Business Network for Logistics should be the preferred choice because you can simplify integrations and because it is a robust, scalable cloud network with global coverage and several flexible options.
A decision is more difficult if your dominant enterprise applications are non-SAP. If you need to grow and enhance your carrier collaboration with advanced tools such as event management, need to integrate with third-party tools to enable real-time visibility, and need to enable additional analytics, consider SAP. In addition, SAP has dedicated and proven product support practices. Max Attention services, Online Service Support (OSS) tickets, notes, and a dedicated team can help to address product questions quickly.
At HCLTech, we help organizations assess the functionality and feasibility of network solutions like SAP Business Network for Logistics. With rapid prototyping and proof of concepts supported by various tools (SAP Business Technology Platform, Azure App Services, PEGA), we help shippers make informed decisions to choose the most effective carrier collaboration strategy. Furthermore, businesses can leverage these strategies to synchronize business operations, streamline carrier collaboration, and transform themselves into intelligent enterprises.
To know more about how HCLTech can plan your SAP Business Network Logistics journey to streamline supply chain operations, visit our page.