Enhancing Customer Centric Supply Chains - Part 1
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GXS sponsored a study which looked at how today's suppliers were dealing with ever complex supply chain related requests from their customers. The study, entitled Enhancing Customer Centric Supply Chains, was conducted by SCM World and Cranfield University. This first of a two part presentation discusses the results from the study. The second part of this presentation discusses how GXS Managed Services can help to address some of the complex challenges facing suppliers working across today's customer centric supply chains. Updated April 2013
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Enhancing Customer Centric Supply Chains - Part 1
- 1. Enhancing Customer Centric Supply Chains – Part 1 Mark Morley, Industry Marketing Director
- 2. Slide 2 | © 2013 GXS, Inc. Introduction • Today’s customer centric supply chains are becoming incredibly complex • Many suppliers do not have the internal resources to support new customer driven technologies and business processes • Many suppliers are having to find new ways to support their customers in order to remain competitive in the market • Suppliers require incredibly flexible B2B platforms to service these customer demands
- 3. Slide 3 | © 2013 GXS, Inc. Third Party Research Institutions Validate the Value of B2B Outsourcing TCO Study by Hobson & Company ERP Study by AMR Research • 84% experienced ERP project delay • 34% of data comes from B2B • 2.9% average error rate for B2B ROI Study by Stanford University • Average 250% ROI • 62% increase in customer satisfaction • 75% increase in B2B capabilities • Average savings of 20%- 40% • Cash flow analysis model • Net present value model
- 4. Slide 4 | © 2013 GXS, Inc. Enhancing Customer-Centric Supply Chains Study Led by Professor Martin Christopher SCM World Speaker Faculty Member Emeritus Professor of Marketing and Logistics at Cranfield School of Management
- 5. Slide 5 | © 2013 GXS, Inc. Demographics – Primarily Manufacturing High Tech & Electronics (19%) Food & Beverage (11%) Pharmaceutical & Biotech (8%) Industrial Parts & Equipment (7%) Aerospace & Defense (5%) Automotive Parts & Vehicles (5%) Medical & Surgical Supplies (4%) Apparel & Footwear (3%) Note: The remaining 38% of survey respondents did not specify an industry
- 6. Slide 6 | © 2013 GXS, Inc. Customer-Centric Supply Chains Large Customers Large Customers Supplier (Manufacturer) Supplier (Distributor) Point of Sale Inventory Positions Sales Forecast Cross-Docking Floor-Ready Merchandise Mixed Pallets Inventory Position Consumption Production Forecast Vendor Managed Inventory Late Stage Configuration Evaluated Receipts Settlement Demand Planning Demand Planning Custom Services Custom Services
- 7. Slide 7 | © 2013 GXS, Inc. The New Competitive Advantage Product Price Promotion Place Customer Service Process 94% of Respondents Agreed that Increasingly companies will compete as much through superior processes and service solutions as through superior products
- 8. Slide 8 | © 2013 GXS, Inc. Complexity from Customers 73% Agreed 0% Disagreed Examples of New or Customised Processes • Custom Packaging • VMI • ASN • Drop Ship • Self Billing In the past three years the number of requests from large customers for new or customised supply chain processes have 0% 20% 40% 60% Decreased Significantly Decreased Moderately Stayed the Same Increased Moderately Increased Significantly
- 9. Slide 9 | © 2013 GXS, Inc. The “Customised” Supply Chain VMI JIT Floor Ready Merchandise Evaluated Receipts Settlement Cross-Docking Supply Chain Finance Schedule Assignment Open Account Postponement & Late Stage Configuration Auctions Reverse Direct Store Delivery Mixed Pallets Direct-to-Consumer e-RFQ SILS Corporate Social ResponsibilityCall Off Supplier Managed Inventory Wire Transfer 90% of Respondents Agreed that Our Customers Increasingly Demand Customised Service Solutions & Packages
- 10. Slide 10 | © 2013 GXS, Inc. Order Management Technology Source: 107 High Tech Respondents – SCM World Study – Enhancing Customer Centric Supply Chains - September 2010 0% 20% 40% 60% 80% 100% Punchout XML Phone Portal Fax EDI E-Mail Which of the following technologies do you offer customers to place orders? Select all that apply. No Dominant Approach Exists Suppliers Must Support Many Different Models
- 11. Slide 11 | © 2013 GXS, Inc. 0% 20% 40% 60% 80% Other Standard GDSN Portal EDI Spreadsheet Product & Price Sync Technology No Dominant Approach Exists Suppliers Must Support Many Different Models Source: 54 Food & Beverage Respondents – SCM World Study – Enhancing Customer Centric Supply Chains - September 2010 Which of the following methods do your customers require to share product catalog and pricing information? Select all that apply. No Dominant Approach Exists Suppliers Must Support Many Different Models
- 12. Slide 12 | © 2013 GXS, Inc. Differentiating with B2B E-Commerce 89% of Respondents Agreed that Flexibility of our B2B e- Commerce program enables us to differentiate from competitors on service On-Time Delivery ASN Timeliness Correct Carrier Authorised Substitutions Barcode Label ASN Accuracy Supplier Scorecard Perfect Orders Overall Score 0 5 10 2010 2009 2008 Perfect Imperfect
- 13. Slide 13 | © 2013 GXS, Inc. In Summary, Complexity will Grow; Service and Flexibility Will Differentiate • New sources of low cost competition mean that the pressure on price will continue • Continued concentration of markets means that bigger, more powerful customers will demand more from their suppliers • Conventional marketing strategies have less effect in a time-sensitive, on-demand world • Companies will compete as much through superior process and service solutions as through superior products • As complexity increases, manufacturers must further embrace technology to sustain high customer satisfaction ratings while maintaining appropriate profit margins • A flexible B2B e-Commerce capability is a critical requirement in devising a strategy for managing complexity
- 14. Slide 14 | © 2013 GXS, Inc. Further Information NA – http://www.gxs.com/resources/insights/ EMEA - http://www.gxsinsights.eu/4th_edition/index.htm
- 15. Slide 15 | © 2013 GXS, Inc. Thank You Phones US: 1-800-334-2255, option 3 EMEA: +44 (0) 1932 776047 GXS web sites US: www.gxs.com EMEA: www.gxs.eu
Hinweis der Redaktion
- Today’s customer centric supply chains are becoming incredibly complex.Suppliers are being put under pressure from their customers to adopt new technologies, integrate with key business processes and enter new markets around the world. However many suppliers simply do not have the internal resources to support the ever increasing demands being placed on them from their customers.In addition to customer demands, the global economy is just recovering from a major economic downturn and many companies are trying to reduce costs through restructuring their operations and at the same time remain competitive in the market.If companies are to improve the way in which they support their customers whilst at the same time remaining focused on their core competencies then they will need to ensure that they have a flexible B2B platform to support these activities.
- Over the past four years GXS has released a number of thought leadership studies to support our B2B outsourcing offering. In 2007 GXS partnered with the Supply Chain Management Forum at Stanford University to get a better understanding of the ROI that companies could realise by outsourcing their B2B infrastructure. On average companies were seeing a 250% ROI on their B2B projects.In 2008 GXS partnered with Hobson and Company to develop a Total Cost of Ownership model so that companies could work out the savings that could be made by outsourcing their B2B infrastructure rather than keeping their B2B inhouse. On average companies were finding a 20%-40% saving by outsourcing their B2B environment.In 2009 GXS partnered with AMR Research to undertake a study to get a better understanding of how companies were running their EPR B2B integration projects today, and one of the most significant statistics to come out of this study was that on average 34% of data feeding ERP systems comes from outside the enterprise.
- In 2010 GXS partnered with SCMWorld and Cranfield University to get a better understanding of how suppliers are meeting the increasingly complex demands from their customers. The study, entitled Enhancing Customer Centric Supply chains, was led by Professor Martin Christopher, Emeritus Professor of Marketing and Logistics at Cranfield School of Management.The remainder of this presentation will review the key findings from this important study.
- The study had a very strong response rate with over 880 respondents, from all major geographies around the world, from the industry sectors highlighted on this slide.The respondents were primarily from the manufacturing sector with High Tech companies drawing the highest level of response from all those companies that completed the survey.
- The study deliberately targeted suppliers who were either manufacturers or distributors to large companies. These companies could either be from a single country or operated plants all around the world.As well as placing numerous and varied demands on their suppliers these large customers also asked their suppliers to adhere to a variety of customised services and their suppliers were expected to integrate themselves to these services as a condition of doing business with them.So today’s suppliers are essentially having to deal with three key complexities here, Regional, Technology and Process based complexities.
- To succeed in this challenging environment companies need to go beyond the conventional marketing mix and to recognize that competitive advantage is gained through the strength of the relationships that can be forged with their key accounts. 94% of respondents said that they would have to become more competitive through superior processes and service solutions.
- As customers have grown larger and more powerful, they have fine-tuned their supply chain to optimize their operations.Each large customer approaches supply chain optimization differently.To minimize inventory some require VMI while others request goods be “drop shipped” directly to the end customerThe result is that suppliers have to support a variety of customized models for their large accountsOver recent years the number and diversity of the requests continue to increase
- As companies strive for supply chain optimization there have been a number of process innovations which provide competitive advantageOrdering – Enabling the supplier to manage inventory positions through VMI, JIT, Consignment modelsShipping – Reducing manual processing of goods through cross-docking, floor ready merchandise, mixed palletsSettlement – Eliminating the invoice with self-billing or offering accelerated payment to a vendor via supply chain financeOf course, there is no standard for VMI or self-billing or cross-dockingEach OEM or retailer implements these processes slightly differentlyIt should be no surprise then that 90% of respondents indicating an increase in requests for customized, complex services from large accounts
- Suppliers offer a myriad of technologies to enable customers to place orders. It seems that e-mail and fax predominate but with a significant number of respondents (61%) offering EDI capability or Order Management Portals (55%). So with no dominant approach existing, suppliers must support many different models.
- Suppliers have to support numerous different approaches to exchange product and price data with customers.The technology diversity adds complexity to the supply chain.Again no dominant approach exists at the moment
- One of the key findings from the study was that 89% of the respondents said that the flexibility of their B2B ecommerce program enables them to differentiate themselves from their competitors.Whether it is supporting a multitude of different communication protocols, document standards or offering support in different regions around the world, outsourcing the management of a B2B infrastructure can provide the flexibility that these suppliers are looking for.
- New sources of low cost competition meanthat the pressure on price will continueContinued concentration of markets meansthat bigger, more powerful customers will demand more from their suppliersConventional marketing strategies have lesseffectin a time-sensitive, on-demand worldCompanies will compete as much through superior process and service solutions as through superior productsAs complexity increases, manufacturers must further embrace technologyto sustain high customer satisfaction ratings whilemaintaining appropriate profit marginsA flexible B2B e-Commerce capability is a critical requirement in devising a strategy for managing complexity
- To find out further information about how GXS can help Enhance Customer Centric supply chains, please visit the dedicated microsites that are highlighted on this slide.GXS Insights contains a number of valuable resources including thought leadership articles, white papers and presentations. These will help you get a better understanding of some of the issues facing today’s customer centric supply chains and offers advice on how GXS Managed Services can help alleviate these issues.