Unpredictability is undoubtedly the major issue manufacturers face when dealing with fragmented supply chains. As the supply chain breaks, manufacturers must find new suppliers and new transport routes and find them rapidly, so that production doesn’t come to a halt.
Pick your favorite supply chain description: fragmented, disrupted, brittle, uncertain, quixotic, complex, pressure-filled, bottlenecked.
Global supply chains are suffering from what a recent research article from J.P. Morgan describes as a “perfect storm” of, among many factors, consumer demand shifts and increased online purchases, labor constraints, COVID-19 shutdowns, sky-rocketing international shipping costs, inflation, rising fuel costs, the Russian invasion of Ukraine, global trade friction, fluctuating exchange rates, Brexit, shifts in geographical supply and demand, calls for environmental sustainability and more ethical operations and more.
It’s exhausting for supply chain leaders.
Even as industries start to recover from the effects of the pandemic, significant issues remain:
- Ongoing work stoppages in China due to the COVID-19 pandemic
- Potential U.S. port congestion and unresolved labor issues when imports from Asia return to full strength
- Continued fallout, including transport congestion, limited air freight and rail freight transportation in the Asia-Europe lanes, because of the Russia/Ukraine conflict
All these challenges reverberate up and down the value chain and manufacturers know them all too well. So, how can manufacturers respond to these challenges?
How to Effectively Manage Fragmented Supply Chains
Integrated and automated supplier relationship management delivers answers for fragmented supply chains.
Regular readers of this blog know that we’ve focused lately on various critical supply chain issues and ways to combat them, including the bullwhip effect, ways to improve supplier network communications amid supply chain areas ripe for deeper examination, the cost of not knowing your suppliers regarding environmental/social/governance (ESG) and corporate social responsibility (CSR) issues, supply chain due diligence, and ethical supply chain initiatives, among others.
All these posts point to the need for visibility and solutions that foster collaboration in the supplier ecosystem. In a recent article from Procurious, the authors suggest:
“A modern spend management strategy requires visibility into your suppliers’ practices as much as your own. Supplier visibility provides analytics and insights to inform your strategy. Supplier relationships are being put to the test every day. Strong collaboration, deep visibility and actionable data are key to remaining resilient and agile.”
The article also quotes a McKinsey study that only 21% of companies have visibility beyond their tier one suppliers, and only 2% have visibility into their tier three suppliers. A lack of visibility contributes to fragmented supply chain operations.
The Benefits of QAD SRM
QAD Supplier Relationship Management (SRM) is an integral building block to strengthen supply chains to withstand challenges and disruptions. With the waves of challenges undermining supply chains across all industries, businesses need improved supplier collaboration, optimal sourcing and quicker ways to respond to shifts in supply and demand.
QAD SRM delivers the tools to improve real-time communication and procurement processes and to counteract supply risks. Instead of relying on spreadsheets, manufacturers gain the means to automate and streamline supplier lifecycle processes using a supplier portal. Users can access a variety of QAD tools and solutions:
- QAD Auctions tailors auction designs to the specific negotiation and award strategies and improves sourcing results.
- QAD Demand and Delivery achieves improved visibility and collaboration on inventory, schedules, orders, shipments, invoices and replenishment requirements.
- QAD Sourcing automates the electronic RFQ process with suppliers, improving evaluation and qualification of suppliers and negotiating best value agreements.
- QAD Supplier Management delivers all supplier information and reduces discovery, onboarding and qualification cycle times.
QAD SRM achieves further process improvements, including better information collaboration with customizable workflows, forms and questionnaires plus automated document collection, management and downloading. By centralizing supplier data, QAD SRM gives users options to organize and manage the data. Predefined templates add another layer of consistency and reliability for supplier data. At the same time, procurement organizations can collaborate on accurate and current supplier intelligence. Its workflow engine identifies supplier activities, tasks and approvals, optimizing source-to-pay processes.
With QAD SRM, electronic signatures are easily managed and distributed to proper recipients with security protocols in place.
The digital connectivity of QAD SRM delivers greater transparency and end-to-end collaboration with suppliers, resulting in products and parts delivered where and when required. The solutions improve collaboration, quality and performance resulting in an integrated supply chain and improved performance. Inventory outages are less likely, quality improves, and shipments occur on time.
Improved supplier visibility with automated solutions results in reduced risk, the ability to rely on real-time data, to foster trust among suppliers, and respond to changes in the supply chain.
To learn more about QAD SRM, please visit our website.
