As a supply chain professional, you are continuously communicating and collaborating with a broad community of people. But what about the tools at your disposal? Do they allow for the most efficient and effective means of communicating? Let's have a look at how we could always do better and why this is crucial to your business.
Communication is key, but it stinks.
There aren't many things both retailers and suppliers agree on. Safe for at least one exception: communication stinks. A questionnaire by Kane reveals that there's huge discrepancy between both parties on almost every topic but for the factor 'communication' both hover around a score of 6/10. The costs and inefficiencies increase significantly due to failures in communication.
Improving communication with all your stakeholders could give you access to more data. And more data means more visibility: god knows we’d all benefit from a little more of both. Another common-sense reason for more efficient communication has to do with the ability to make quick and informed decisions. Once you are able to share all these new insights amongst your stakeholders, you gain the ability to generate impact and make decisions faster. If there is no exchange of information, you are basically feeling your way around the dark.
The road to collaboration is paved with quick wins
So what is everyone waiting for when the solution is staring us straight in the face?
Okay. So now we know and agree that 1. We need to collaborate better and 2. Not doing so is costing us money and opportunities. Let’s put that into actual, shocking numbers. Research estimates an incremental profit increase from 7 billion to 21 billion dollars annually for the FMCG industry as a whole, simply through greater retailer-supplier collaboration. This theory has been put into practice by a retailer who stated that a successful collaboration project with their suppliers led to an inventory reduction of 30%. Put two and two together and you’ve got every supply chain stakeholders dream: make more money whilst ridding yourself of superfluous stock.
It’s the perfect time to start collaborating, as cloud-based communication technology with real-time data access is now widely available and making it so easy to connect your entire supply chain that there are no more excuses to keep the imperfect status quo. An easier, more familiar way to say “cloud-based communication technology with real-time data access” is: social technologies.
The Social Network
According to a study by McKinsey, it is estimated that two thirds of the value creation lies in improving the communication and collaboration within and across enterprises. This huge value in the supply chain was unlocked through the use of social technologies.
Despite this impressive finding on value creation, a study by Adrian Gonzalez, founder and president of logistics research company Adelante SCM, found that 61,5% hasn’t implemented a social networking solution yet. This is surprising to say the least, seeing as a McKinsey study found that 90% of companies that are using social technologies, have reported various key benefits from it. Benefits such as: greater access to knowledge, cost reductions due to more efficient communication and an increase of productivity.
What’s the delay?
So if social technologies have been found to be the causal glue between your success and that of your shareholders, one could ask why so many companies refrain from drinking this magical elixir.
The answer is so straightforward that it’s easy to miss. For one, most supply chain stakeholders simply do not know where to start and how to differentiate between the good, bad and ugly social technologies. A correlating reason found in the same aforementioned study by Adrian Gonzales is that businesses are often unsure of what the implementation of such technologies will entail: will the upside of such a change generate the business value that is being promised?
We here at Pro Alliance for one strongly agree that the key to our industry’s future success is communication, communication and communication. If you want to know more about how a Saas solution could give you all of the benefits you’ve just read about, visit proalliance.ioand get in touch with us for a tailor-made appraisal.