SAP Ariba Supply Chain Collaboration for Full Visibility

Supply chain collaboration is the process of extending internal systems and processes to an ecosystem of trading partners. On the supply side, this ecosystem typically includes direct materials suppliers across multiple tiers, contract manufacturers, co-packers, shippers, carriers, and third-party logistics providers. Businesses can collaborate on order processes including purchase order transmission, order confirmations, advance ship notices, goods receipt notices, and invoices, as well as forecast and inventory. In addition, businesses can collaborate with suppliers during quality-related processes by digitally requesting quality data, documentation, and confirmation.

Supply chain collaboration is important because it helps improve supply assurance, reduce invoice exceptions, improve process compliance, and provide visibility into potential supply chain disruptions. Supply assurance is a critical requirement in a world impacted by COVID-19, labor shortages, and other supply chain disruptions.

Supply chain collaboration is also important because it involves trading partners in digital transformation initiatives. According to recent research from Oxford Economics, more than half of companies outsource at least 25% of their manufacturing. As reliance on external partners increases, companies must expand the focus of their digital transformations beyond their own internal systems and processes to involve their trading partners in improvements.

Enterprises and their trading partners both benefit from collaborative supply chain relationships.

Enterprises benefit from:

• Greater assurance of supply, which leads to higher customer satisfaction, more upside revenues, and fewer stockout penalties
• Higher inventory turnover and fewer invoice exceptions and disputes
• Faster and more compliant confirmation of quality of raw materials, manufactured components, final products, and more
• Fewer manual collaboration efforts that often introduce error and take too much time
• Improved ERP processes and greater planning data accuracy
• Reduced IT costs from not needing to manage their own supplier portals

Trading partners (including contract manufacturing organizations, suppliers, n-tier suppliers, co-packers, tollers, and others) benefit from:

• Better visibility into customer demand
• Increased customer satisfaction for a higher share of wallet
• Reduced IT costs from creating one harmonized point of connection with customers

Supply chain partners can collaborate more effectively by using technology to automate manual tasks, eliminate data silos, and enable innovative new ways of working together.

Automated collaboration replaces manual processes (such as spreadsheet-based collaboration) to improve accuracy and reduce costs. Using network-based collaboration, businesses can use business rules to create better outcomes. For example, companies can require that their suppliers provide advance ship notices and receive goods receipt notices before they invoice. The network can perform three-way matching that verifies that these documents were submitted and match. This means fewer invoices are rejected because validation happens before the invoice data enters the ERP.

Third-party technology for supply chain collaboration can replace homegrown software to provide modern capabilities and a road map for innovation. With the right third-party technology, suppliers gain multiple collaboration options, including to business-to-business integration, EDI, portals, downloadable spreadsheets, and more.