Increased frequency of international ‘black swan’ events has resulted in a world characterised by unavoidable supply chain disruptions. While the pandemic acted as a catalyst for these severe supply chain issues, it also uncovered the underlying and unaddressed problems associated with the traditional linear and fragmented supply chain, where each step is dependent on the one before.
Improving supply chain visibility has now become the key priority for many organisations. By doing so, businesses can operate with greater fluidity as they collaborate with a wider network of trading partners and leverage combined intelligence, consequently reducing the significance of disruptions.
A business network opens a door of opportunity into a world of connected enterprises. With International Data Corporation (IDC) declaring disruption to be the “next” normal, a digital business network enables companies to collaborate with trading partners to streamline processes, create value in real time, and solve problems quickly as they arise.
In fact, according to a recent study of ours, 79% of consumers say they are more aware of how supply chains impact availability of products than before the pandemic. With this increased awareness comes increased scrutiny, which means collaboration is vital for business continuity. Those who have pivoted to operating in a business network can tap into a network of trading partners who can provide companies with access to real-time information, allowing them to have a greater view of their business so they can adapt and respond to unexpected changes or events with minimal disruption to their business and their customers.
Driving value for customers
One of the most important elements of running a successful business is having happy, referenceable customers. When organisations collaborate in real time, and work in parallel, the customer ultimately benefits. Customer service is enhanced because they receive the value as the businesses in the network focus on their needs. This allows them to understand and satisfy customers’ needs, solve fulfilment challenges in real time and over-deliver on expectations.
Selecting optimal suppliers
A business network provides transparency that allows companies to choose suppliers who best align to the company’s values, processes and their customers’ expectations. For example, our research showed that consumers are now favouring brands that support local suppliers (83%) and are seeking ethically sourced products (55%). Those operating in a business network can respond to consumer trends by identifying suppliers who prioritise sustainability and who can help them to achieve their environmental, social and governance (ESG) goals.
Boosting visibility to enhance profitability
We’ve seen the effect of recent disruptions on supply chains, exposing their fragility. The impact of these disruptions can immediately slow down desired outcomes. Because a business network can provide visibility across the entire supply chain, companies can anticipate issues that may arise. This allows them to adapt and react quickly, avoiding unnecessary costs due, for example, to shipment delays.
Companies can also reduce costs through their ability to identify and work with the most efficient and low-cost logistics supplier for order fulfilment. This enables companies to reroute shipments through a logistics business network, ensuring deliveries are handled quickly to meet customer expectations.
Further, business networks can open a company’s visibility into new suppliers that may compete against current ones. This new, larger supply base can lead to new relationships and help drive down purchase prices — further enhancing profitability — and bring new customer channels to light.
Leveraging global networks
Relying on a business network can help a company move beyond its local market to become part of a global network that continues to grow as more companies join. Business networks are multipliers for buyers, sellers, shippers, carriers and even asset utilisation and maintenance. This helps companies expand into new global markets, find new customers and uncover new opportunities, and secure the suppliers needed to support these new business models. In addition, with a global network of suppliers, businesses can be assured of supply during times of disruption, reducing stock-outs and revenue loss.
Because every transaction has two sides ꟷ whether it is the buyer and seller or shipper and carrier ꟷ the network can quickly expand. For example, when a buyer uses a carrier, that carrier becomes known to the seller, which can then become a new source for both businesses. As these two businesses transact more with others, the carrier may work for even more of their connections. This network effect is an excellent means for companies to broaden their customer base and trading partnerships.
Improving forecasting and flexibility
Through the combined intelligence generated by all trading partners within a business network, companies can view historical data on shipment types and routes, equipment information, product specifications and more. This data can be used to identify trends, track KPIs and benchmark with industry peers. Such intelligence can also trigger alerts to enable businesses to respond to real-time events along their supply chain. Through collaboration on the network, businesses and their trading partners have more insights and knowledge to make better informed decisions. For example, material traceability provides consumers with visibility into where a product was sourced. Without this visibility there are many questions that are hard to answer, like whether the product was ethically sourced or whether it was adhering to legislative requirements. Without the answers to questions like these, companies could be jeopardising their brand and reputation and could even face legal repercussions.
Business networks enable companies to tap into the combined intelligence of an extensive system of trading partners. As a result, supply chain visibility is greatly improved which allows business leaders to forecast and minimise any potential risks while also improving operational flexibility to ensure business continuity and growth. As business networks expand and their ecosystem of engaged trading partners multiplies, the opportunities for businesses are limitless.