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Tag: supplier collaboration
In a rapidly changing political and technological world, mutual trust between business partners plays an increasingly important role. Collaboration within trusted supply networks is becoming a critical competitive factor. It is the basis for successful cooperation within the industry. Trust is also built through the timely and comprehensive provision of data that is shared by all parties. The resulting ecosystem brings immediate economic benefits and is the building block for end-to-end industrial digitalization.So far, 2024 has been a year of constant challenges: Geopolitical conflicts, economic crises, and rapid technological leaps are all putting politics, business, and society to the test. Despite all the uncertainties, many events have made one thing clear time and again: We can only move forward together. That is why we need partners from other countries, other industries and other parts of our supply chain - partners we can trust.Politicians in Germany and industry have recognized this. Various initiatives such as GAIA-X, Manufacturing-X or Catena-X have been launched to bring together the various players in an integrated value chain. SupplyOn was also addressed, as SupplyOn has been operating an ecosystem for more than 20 years, has continuously expanded it and is now also interoperable with other ecosystems such as Catena-X.In a business context, such a network requires one thing above all else: mutual trust. Those who collaborate beyond their own company boundaries and strategically share information with partners, suppliers, customers or government agencies need a secure, reliable digital environment!IDC's "Future of Industry Ecosystems 2023" study shows once again that ecosystems and business success are closely linked: 90% of respondents said they will increasingly rely on connected data ecosystems in the future and plan to maintain or accelerate their investments in them. The drivers are:Increased business agility,greater process automationimproved system integration, andincreased data sharing with partners, also for ESG reasons.It is no secret that data and distributed data is what gives networked ecosystems their unique value. Teams and systems in different companies, locations or government agencies can access the same data in real time. Access rights control the shared view of the data, giving stakeholders an unprecedented view of their own information and a clear understanding of the big picture. Based on this broader insight from multiple systems, stakeholders can now make more informed, faster decisions.In practice, we have already seen that this approach to digital collaboration is successful. Companies such as Pfizer and Biontech were able to research a vaccine against Covid-19 in a very short time, and leading companies such as Henkel and Covestro are already using the digital twin to make their contribution to decarbonization across teams. At a large company like Henkel, each business unit functions as a separate company. In one project, more than 4,000 physical and virtual sensors were installed in different areas and integrated into a single system. These sensors measure electricity, fossil fuels, compressed air, steam, water, and waste water, showing energy consumption on a plant-wide level, as well as in individual production areas and technologies. This enables Henkel to clearly identify where and how energy is consumed in different teams and parts of the company, and to initiate measures to reduce energy consumption. As a result, they have improved energy consumption and emissions data across the supply chain by 5 to 6 percent per year.The integration of artificial intelligence (AI) throughout the system provides even greater competitive advantages. Predictive and prescriptive analyses, for example, make it possible to predict bottleneck situations in the supply chain in good time, identify risks and thus proactively avoid supply bottlenecks. Here, too, SupplyOn is already using AI solutions in its ecosystem to strengthen the resilience of the supply chain, make inventories and bottleneck situations visible, minimize risks and thus enable faster and better-informed decisions. This enables them to ensure that products and services meet customer expectations and that ESG regulations, among others, are implemented efficiently (see SupplyOn's ESG Suite).Buyers, planners, schedulers, suppliers and customers: Each stakeholder benefits from a holistic view of the value chain with improved transparency and real-time data. An analysis by Aveva shows that integrated ecosystem thinking enables industry leaders to increase profitability by 10 percent, triple return on investment and achieve up to 20 percent higher sustainability performance. The SupplyOn experts will be happy to advise you on how to successfully implement an ecosystem.
You can only manage what you measure, they say—and rightly so. This is especially true when it comes to supply chain performance. Disruptive change and increasing demands for cost efficiency, quality, and speed present unique challenges. Only by measuring how well it is performing can the supply chain be properly aligned and optimized.This requires a comprehensive, holistic view of supplier performance which goes beyond traditional key performance indicators (KPIs). The evaluation scheme should also provide sufficient leeway and flexibility to respond quickly to internal and external changes. Most importantly, performance measures need to have impact. In other words, they need to shape the way we interact with each other. Therefore, evaluation criteria must be transparent and accessible to all stakeholders, and there must be a proactive, open exchange of information. Only then can both sides improve collaboration.So there are six factors that characterize good Supplier Performance Management: it must be holistic, flexible, binding, transparent, proactive and collaborative. But what does this mean in practice?Holistic Supplier ManagementMore than "just" performanceTraditional metrics such as on-time delivery (OTD), on-time, in-full (OTIF), unit cost, order fulfillment (PO collaboration), and first-pass yield (FPY) are certainly important. But there is more to a holistic picture: There are qualitative factors such as response time, service quality, complaint handling, price stability, and resilience to various risk factors.Another important evaluation category is determined by the supplier's capabilities. This includes factors such as agility and flexibility in the face of change, innovation and speed, the degree of digitization of its processes and, last but not least, sustainability aspects.Only the combination of all these factors provides a complete picture of a supplier’s performance. If you neglect one factor in the assessment, this can lead to significant competitive disadvantages or even serious compliance problems, for example with regard to the Supply Chain Acts in Germany or the USA. Flexible Supplier Performance ManagementCustomized and quickly adaptableEvery business is different. So are their supply chains and supplier relationships. This has an impact on Supplier Performance Management: which topics are important, which criteria are included in which scores and how they are weighted, and who has access to which data internally—all of this varies greatly from company to company.Accordingly, a Supplier Performance Management solution must be individually adaptable if it is to make a value-adding contribution. At SupplyOn, we have therefore placed particular emphasis on the high configurability of our Performance Management solution. With just a few clicks, companies can configure the content and data fields of a table, as well as filters, scorecards and hierarchies.Organizational structures can also be stored to enable multi-dimensional monitoring at the division, plant, or country level. The dashboard, too, is customizable. In the event of organizational changes or changes in the business environment, companies can easily adapt the configurations without any additional implementation effort—and optimally adapt their Supplier Performance Management to their changing needs at any time. Binding Supplier Performance ManagementProviding direction for procurementMeasuring supplier performance is not an end in itself. Supplier Performance Management can only function as an active control tool for supply chain quality if it is closely linked to all downstream procurement processes. In this sense, supplier performance is the supplier sentiment that companies use to decide which materials and processes (RFxs, auctions, orders and contracts) the supplier is qualified for.In this way, the purchasing department can ensure that only suppliers that comply with the company's internal specifications can be selected. This ensures compliance along the supply chain.SupplyOn Performance Management can be seamlessly integrated into internal systems via API, so that even global companies with very heterogeneous IT landscapes can benefit from this company-wide compliance enforcement. The solution also integrates with other SupplyOn solutions such as Supply Chain Collaboration, Sourcing and Quality Management.The aim of all these measures is to achieve an integrated workflow that leads to a continuous improvement in supplier performance—and thus in the entire supply chain.Transparent Supplier Performance ManagementA common understanding between customer and supplierSuppliers can only improve if they know — and above all understand! — how they are perceived by their customers. What metrics are most important, what factors go into a score, and what is actually measured? A supplier must be able to answer all these questions in order to adjust its own goals accordingly and initiate suitable improvement measures.With SupplyOn Performance Management, companies can share the evaluation categories and evaluation hierarchies with their suppliers. This customer-based structure makes it easier for suppliers to understand the reasons behind certain scores. Info buttons explaining the calculation of the respective KPI and traffic light functions also help to make this easier to understand.All of this ensures that both sides have the same view of the data and therefore the same understanding of supplier performance Proactive Supplier Performance ManagementAutomatic trend monitoringThe sooner companies and suppliers can take action on performance issues, the better. This requires up-to-date data. SupplyOn Performance Management uses automated processes and API connections to continuously collect all data in real time. Trend analyses provide a quick overview of improvements or deteriorations compared to historical data, making lengthy analyses a thing of the past. This enables companies to proactively take appropriate development and improvement actions for their suppliers and store them directly in the system.In the future, AI functionalities will further expand this proactive approach in SupplyOn Performance Management by automatically identifying optimization potential for suppliers and suggesting appropriate measures.Collaborative Supplier Performance ManagementWorking as a teamThe customer-supplier relationship is not a one-way street. It thrives on productive collaboration on both sides. Supplier Performance Management should reflect this collaborative approach. After all, different perspectives can quickly lead to misunderstandings and feelings of unfairness if not discussed.For example, last month's on-time delivery (OTD) score may have been 80 instead of 100 according to the customer's data, but when discussed with the supplier, it turns out that the late delivery was due to weather-related accidents and traffic jams—factors beyond the supplier's control. Both parties can then agree to adjust the score accordingly.For this exchange between customer and supplier, SupplyOn Performance Management offers convenient comment functions, the option of setting up measures and an integrated supplier self-assessment. Here, suppliers can present their own performance or capabilities and initiate a collaborative exchange with their customers.But collaboration is not just about individual scores. It is also about the customer and supplier working together to improve overall supplier performance.Bottom lineEmbedding all six aspects into Supplier Performance Management leads to more harmonious relationships because it enables collaboration on an equal footing. Suppliers are seen as equal business partners, pulling in the same direction as their customers, with the goal of continuously improving processes and collaboration. Suppliers can tailor their activities and actions to the needs of their customers and continuously analyze their progress. This enables companies to develop their suppliers efficiently and strengthen their own competitive position.The combination of these two perspectives makes Supplier Performance Management a powerful lever for increasing the resilience, efficiency and sustainability of the entire supply chain. At SupplyOn, we integrate these two perspectives through close cooperation with companies and suppliers. In this way, we continuously gather valuable feedback from both sides to continuously expand the SupplyOn Supplier Performance Management solution, integrate the latest technological advancement and improve it even further. As a result, companies and suppliers can work most efficiently and always stay one step ahead of the competition.
How should complex supply chains be designed so that they are resilient to risks of all kinds and adapt agilely to dynamic market conditions? How can a cost-efficient procurement strategy be implemented that leads to tangible cost savings thanks to intelligent demand bundling and optimized operational procurement processes? How can the interaction with suppliers be optimized so that both sides benefit from maximum efficiency and transparency? One of the key prerequisites is the seamless integration of the entire supplier network into your own business processes - end-to-end via just one central platform.Discover here how an global player in the automotive supply industry managed this balancing act - even though the organization was characterized by a high degree of inhomogeneity due to numerous takeovers. In the course of this project, a uniform IT infrastructure was created and standardized processes implemented for numerous single entities with large differences in terms of degree of digitalization, process design and IT landscape.The first strategic decision on the path to harmonization was to replace the heterogeneous IT system landscape with the company-wide introduction of SAP S4/Hana. It quickly became evident that the harmonization of internal processes and systems would be only the first step and that the supplier processes, which until then had largely been run via Excel sheets and e-mail, would also require optimization. This led to the second strategic decision: to use the migration to digitize and automate collaboration with suppliers at the same time. An established industry solution and a partner with extensive experience in the automotive sector were required here.SupplyOn was chosen for several reasons: Firstly, because of its decades of experience in the automotive business and the resulting numerous best practices. Secondly, because of the comprehensive process coverage and the ability to handle all supplier communication via one platform. And thirdly, due to the high number of connected suppliers and the associated overlap with the company's own supplier base.Reduce complexity with SupplyOnMixed scenarios with several providers were also examined during the selection process, but these were quickly rejected. Not only because external consulting companies such as Gartner clearly spoke out against them, but also because the advantages and synergy effects of a centralized solution were obvious to all parties involved:for suppliers: centralized access to all processes and datafor everyone: no additional and superfluous interfaces that would need continuous updating and be a constant source of errorsAnother advantage of SupplyOn for the customer was the fact that the complexity of the SAP project could be reduced, as SupplyOn offers some of the S4/Hana functionalities including supplier integration as standard. This eliminates the need for additional supplier connections to SAP and customizing, which saves the customer time and money with every SAP update. This applies, for example, to the VMI and complaints process as well as the sourcing process. The target scenario: an end-to-end digitalized world instead of Excel messThe customer's goal was to extend its internal SAP processes end-to-end to the supplier and create a seamless data flow from the internal systems to the supplier and back again - globally, for all plants, for all supplier-related processes, for all suppliers, across departmental and company boundaries. Where Excel sheets were previously exchanged, in future data will be sent directly from the internal systems to the supplier - and the return processes will be correspondingly seamless.This starts with the approval process for a new supplier and extends across the entire supplier lifecycle in all strategic and operational matters - from development and series production through to phase-out.The processes in detailSupplier qualification: The starting point of a customer-supplier relationship is the qualification and approval of the supplier. SupplyOn maps this process, taking into account specific regions and commodities. Upon approval, the supplier is classified and the supplier data is transferred to the internal SAP S4/Hana.Supplier master data management: All relevant data that characterizes a supplier is collected here - contact details, plants, production capabilities, certificates, audit results, classifications, approvals, contracts, etc. A duplicate check rounds off this service to ensure that a unique data record is attributed to each supplier.Sourcing of production material - including technical feasibility check: In addition to the price and commercial conditions, numerous other aspects can be queried during the inquiry process and other divisions can be integrated into the process, for example the development or quality department.Sourcing of indirect materials: The main aim here is to structure and standardize processes throughout the company, in particular to bundle volumes across the entire organization (demand pooling), adhere to compliance guidelines and prevent maverick buying.Start of series production: Standardized processes such as APQP or PPAP can be used to check readiness for mass production, ensuring a smooth ramp-up.Procure-to-pay: An end-to-end process from requirement to invoice enables a highly efficient, largely trouble-free and error-free supply chain. Subsequent processes are based on predecessor documents, which not only eliminates manual effort but also minimizes potential input errors.Supplier lifecycle management: In day-to-day collaboration, SupplyOn can be used to map a permanent control loop that aims to continuously optimize processes and products. The initiative does not originate exclusively from the customer. The supplier can also make suggestions for improvement and initiate changes. This is made possible by a collaborative approach in both directions.Audit Management: Both existing and new suppliers can be qualified and categorized here. The result is saved in the Business Directory. This makes it transparent for everyone what status the supplier has: "preferred", "standard" or "on hold". From there, the supplier can be efficiently developed further.Performance management: Performance data from several sources - from the SAP system, from SupplyOn and from external data providers - is bundled here and displayed to the supplier in a consolidated way for targeted performance improvement. At the same time, scoring is calculated from this data and made available internally, for example to Purchasing and Quality Assurance. This creates full transparency across departments at the level of parts, component lists and suppliers.Complaint management with action tracking: Here, errors are analyzed in a structured manner and resolved systematically - in a way that not only solves the current problem, but also ensures that repeat errors are avoided thanks to process or system adjustments.Risk management: By integrating external risk data providers, threatening situations - natural disasters, crisis hotspots or similar - can not only be identified very quickly, but it is also possible to immediately analyze which plants and parts are affected in order to immediately find solutions and alternatives for potential shortfalls. This makes the company more resilient to risks of all kinds and gives it completely new options for managing and responding to escalation situationsThe interlinking of all these supplier processes via one platform provides insights that were previously not achievable in the silo structure. Processes can be optimized end-to-end for the first time. To give an example, a buyer can no longer enquire about a supplier that has been set to "red" by the quality department. Or they can initiate necessary downstream processes with system support during the sourcing process.Implementation and rolloutA pragmatic approach was chosen for the implementation in order to get up and running quickly: Processes that do not necessarily require backend integration were started immediately via the web interface. These include, for example, the sourcing and complaints process. The interface to the backend systems is planned for a later date.As the S4/Hana rollout at the customer extends over several years - 160 plants are affected worldwide - this approach offers the major advantage that SupplyOn use can be started immediately in all plants, regardless of the status of the SAP rollout. At the same time, the integration of processes that are only manageable from the backend was tackled immediately.On the supplier side, SupplyOn takes care of all the necessary steps to get the 3,000 strategically important suppliers up and running quickly. This includes, for example, a comprehensive communication package, a specific training concept and support for suppliers during registration and day-to-day use. In the long term, a further 7,000 suppliers are to be connected in order to benefit from digitized processes in the long-tail area as well.Strategic goals achieved with SupplyOnIncreased competitiveness through the rapid introduction of proven, industry-standard end-to-end processes with suppliers, which SupplyOn continuously develops and adapts to new requirementsIncreased resilience to risks and in escalation and crisis situationsIncreased agility in order to be able to react quickly to changing economic conditions. Also rapid integration of other acquired entities.Improved cross-departmental collaboration between purchasing, quality management, finance and logistics through the use of one central platformReduced purchasing costs through intelligent bundling of demands across several areas.Higher product and process quality through close involvement of suppliers in improvement processes - including those initiated by the supplierLess frictional and administrative effort thanks to a holistic approach: everything from a single source and all processes via one system
Concepts such as decarbonization, net zero or carbon neutrality are now part of the common discourse in customer-supplier relationships. The influence of the supply chain on a product's final ecological footprint (product carbon footprint, PCF for short) is already well known and the efforts to reduce the emissions (Scope 3 upstream) have taken place in many industrial sectors.That's why this article is not about why reducing carbon emissions in the supply chain is the biggest lever to achieve their climate goals. Many studies already describe this and it has been discussed in webinars and at conferences. Rather, the following article will focus on the biggest challenges and highlight possible solutions.Challenge 1 - Data quality and availabilityTo reduce Scope 3 emissions effectively, correct decisions and a good data basis are required. As a company, I create this data by gathering as much real data (primary data) as possible from the supply chain and relying less on standard values or factors (secondary data).What sounds so simple, however, proves to be a significant challenge in practice.How do I retrieve the data?How do I consolidate them?Can my suppliers even deliver the data I need?Are the data I receive from my suppliers correct?Even this seemingly simple question is challenging for many companies - Gartner, in its report "3 Steps to Accelerate Scope 3 Carbon Emissions Reduction in the Value Chain", also identified data quality and availability as one of the most serious problems that companies have to overcome.The PCF data can be queried in different ways. Via e-mail for individual products, via Excel or with a special collaboration tool. Choosing the right way is essential for feedback. It has been shown that e-mail and Excel are often used to launch initiatives, but they quickly reach their limits for all parties involved. Due to the lack of plausibility checks, neither option allows any conclusions to be drawn about data quality and creates further data silos.For this reason, specialized software tools for the exchange of carbon data have become established, such as SupplyOn Product Footprint. In most cases, these tools offer an intuitive user interface, plausibility checks, are integrated into other business processes and are therefore part of an end-to-end collaboration process.This is especially beneficial for small and medium-sized companies (SMEs), as they do not have to introduce additional software, but can work in their familiar environment. Standardized query templates across several customers also ensure greater user acceptance.As a customer, I benefit from a higher return rate and high-quality data. If I want to ask for more details than those provided in the standardized templates, flexible software tools also offer the option of customization, so that I can obtain all the data I need from the suppliers to make my decision.However, care must be taken here not to overload SMEs with overly specific questions, which can either take a very long time to answer or, in case of doubt, cannot be answered.Challenge 2 - EfficiencyWhen I request primary data from my suppliers, it's important to consider what resources they have to deal with the topic of PCF as a whole. As an OEM or Tier 1, I usually have specialists for lifecycle assessment, so-called LCA experts, who deal with this professionally and in most cases have a significantly larger team compared to a Tier 2, Tier 3 or even Tier 4. Hence, it's crucial to recognize that my supplier does not have the same knowledge and resources as I do.Efficiency is a critical success factor in collaboration. Using software solutions for data retrieval is often deemed efficient. In most cases, this is also easier and saves time compared to collaborating via emails or Excel files. However, the journey cannot and should not end there, as the data is initially without context and detached from other business processes.Successful companies integrate the query of PCF values into existing processes along the product life cycle and thus create additional efficiency in collaboration. The purchasing process is a good example of this, as suppliers are already asked to submit their carbon data during the RfQ phase - parallel to the price information and integrated into the sourcing software. The supplier can use a tool to communicate with me as a customer, while I receive all the relevant data at the same time and in a bundled form.SupplyOn Product Footprint's seamless integration into the source-to-contract process provides decisive added value at this point, contributing to more efficient collaboration.However, efficiency is not just a question of the right software. Transparency and communication with suppliers are also crucial in view of the different levels of knowledge about PCF and the limited internal and external resources. The more understanding and knowledge in the supply chain on the subject, the better and faster the data feedback will be.Many companies therefore organize webinars, training sessions or entire supplier days specifically for their suppliers. SupplyOn supports its customers in this process and offers customized supplier community events to cover a wide range in an efficient and resource-saving manner.Challenge 3 - PriorityThe intensity with which companies advance decarbonization efforts is closely linked to the priority placed on sustainability. The importance of dealing with carbon data from the supply chain is influenced, for example, by the delivered industries, legal reporting requirements (keyword CBAM and CSRD) or the company's own corporate goals.Decarbonization competes with many other topics for attention and resources. Cost reduction, digitization, a shortage of specialists, delivery quality, availability - these are all challenges that also need to be overcome. It is therefore important to first define a clear strategy and prioritization within the company.In order to make the importance of PCF values clear to my suppliers, transparency and communication are once again important success factors. Without close cooperation and involvement of suppliers, sustainable carbon reduction along the entire supply chain is not possible. Again, community events and supplier days are among the best practices.In addition, the purchasing side can influence the priority given to suppliers by giving the PCF more weight in the award decision. It is already not uncommon today to take the carbon footprint of a product into account when making purchasing decisions. As the carbon price rises, the importance of the PCF will continue to increase.SummaryIn conclusion, it can be said that purchasing can make a major contribution to the decarbonization of the supply chain despite the major challenges. Selecting the appropriate software, implementing efficient, integrated internal and external processes, and maintaining transparent communication with suppliers are essential components.
Beginning of July, SupplyOn hosted a Supplier Community Event on the topic of Company Carbon Footprint (CCF) to promote the importance of measuring and reducing carbon footprints within the supply chain. The event was a collaborative initiative of Continental, Bosch, Schaeffler, and Vitesco Technologies, and was run and supported by SupplyOn.The event focused on encouraging suppliers to accurately measure and report their carbon emissions. The tool to do so is provided by SupplyOn through a survey, which allows the information to be obtained very efficiently. The data collected that way is crucial in determining the environmental impact of the supply chain and can help identify areas for improvement. The event aimed to raise awareness about the importance of carbon footprint measurement and provide guidance on calculating and tracking emissions.Throughout the session, experts from the participating companies emphasized the necessity for sustainable business practices. Andrej Antipov from Bosch highlighted the alignment between all companies involved, emphasizing the shared goal of implementing CO2 reporting and reduction measures across the supply chain. As part of Bosch’s climate action activities, the company keeps an eye on emissions in the upstream and downstream stages of its value chain (scope 3). Bosch has the goal to cut such CO2 emissions by 15 percent in absolute terms by 2030 compared with the baseline year 2018.Veronika Leutgäb from Continental discussed their commitment to renewable energy and the importance of suppliers having a roadmap toward using electricity from renewable sources. Continental has joined the global RE100 initiative committing to using green electricity and expects its suppliers to do the same. By increasing the use of renewable energy, CO2 emissions can be significantly reduced throughout the supply chain.The event provided a platform for companies to learn from each other and exchange best practices for measuring and reducing carbon footprints. It was an opportunity for suppliers to understand the expectations of their customers in terms of environmental impact and to work towards aligning their practices with sustainability goals.A major step in driving environmental awareness among business partnersSupplyOn's CCF event marked an important step in promoting environmental consciousness and sustainability within the supply chain. By encouraging suppliers to accurately measure and report their carbon emissions, companies can work together toward creating a greener and cleaner supply chain for a sustainable future.Continental further emphasized its commitment to sustainability and indicated that they are working on enhancing its supplier evaluation process to give greater weightage to sustainability aspects, including carbon neutrality and responsible value chains.Markus Oberender also emphasized that Vitesco Technologies is interested to learn about the general strategy and roadmap of suppliers, e.g., when will they start using only renewable energy and when do they plan on becoming carbon neutral.The Schaeffler Group set itself the goal of achieving climate-neutral operations and reducing CO2 emissions in both in-house production and the supply chain by 2040 – for example, by using renewable energies. Sophia Schmid, from Schaeffler, expressed the importance of the CCF survey in gaining transparency from their suppliers. The survey results will be considered in future supply chain evaluations, underlining their commitment to sustainable sourcing decisions. Vitesco Technologies supported that expression by emphasizing the seriousness of the topic. For them, this will be one of the major issues for the next years. Therefore, the sooner the suppliers start the better.Overall, the event was a huge success, showcasing not only the collaboration of industry leaders in promoting sustainable business practices but also the commitment of their suppliers to support this joint effort. The collaborative endeavor of SupplyOn, Continental, Bosch, Schaeffler, and Vitesco Technologies highlights the importance of measuring and reducing carbon footprints in creating a more environmentally conscious supply chain.
