This week we started testing our Inventory Collaboration app on the Tradeshift Platform. I'm a supply chain as well as a skating enthusiast and I was struck by the image above when I was watching the team pursuit of the women between the Netherlands and Japan where Japan won gold in the final. Supply Chain Inventory is like the Olympics of supply chain management.
This is Why
In a multi-tier supply chain we all know that in the Procure to Pay (P2P) process the individual partners typically use the following 3 transactions in the supply of materials: Purchase Order, Shipment Notice and Invoice. These are like the ABC of supply chain collaboration to work together and our Order Collaboration, eLogistics Collaboration and PAY apps support exactly those processes.
Inventory Collaboration: "Synchronizing ERP systems with clunky EOQ"
Now, look at these transactional processes as the movements that the skaters make individually as 3 tiers in the supply chain: They each have to get grip on the ice, exercise power to gain speed and steer from the hips individually. As Olympians they all know how to do that very well but how do you win the race?
Well, that’s the secret of the supply chain olympics: Executing P2P perfectly isn’t good enough! If you look at the picture above you get the clue: The Japanese were better synchronized in their movement and therefore more aerodynamic than the Dutch. This is where Inventory Collaboration comes in: ERP systems with clunky EOQ algorithms and batch oriented production schedules that aren’t synchronized just produce “drag” by design. Even if all individual transactions are carried out with 100% to plan, the sum of the parts is not ideal and everyone just moves individually within the lead times.
Inventory Collaboration: "improves leadtime and reduces disruptions"
Our Inventory Collaboration app uses the same P2P signals as an input but then draws a magic line across the different tiers in the supply chain to detect spikes and dents in the curve that indicate a lack of “flow” in the overall supply chain and provides a feedback mechanism with automated alerts. Because these events are projected forward and not just registered as transactions as in a Warehouse Management System, this provides capability to get in sync and stay in sync with your partners.
The results are improved lead times, less disruptions and more of the right product in the right place at the right time along the supply chain. So are you ready for your supply chain Olympics? Train with us, get your P2P right to start with and go for gold with Inventory Collaboration.