Understanding the Key Steps in Supply Chain Convergence
For today’s organizations, improving customer experience is a top business priority for 2022 and beyond – and rightly so. Today’s customers are demanding more from companies, including a seamless experience where any concerns or questions are addressed quickly and efficiently.
To retain current customers and to attract new ones, organizations must deliver. To do so successfully, they must be resilient, productive, and efficient. To accomplish the goal, it is critical to transform silo’d departments that aren’t aligned or seamlessly connected when it comes to systems and data.
As supply chains become increasingly more complex, companies must fully commit to supply chain convergence.
Traditionally, convergence has been defined as integrating an organization’s various systems. But today’s supply chain convergence today runs much deeper.
“Convergence is broader and more organic,” says Alex Zhong, director of product marketing at GEP. “It’s not just connecting two systems. It’s whatever needs in the supply chain to come together to meet customer demand and put customers in the center.”
Simply put, this means systems, data, and processes from across an organization must converge to enable successful collaboration, such as employees seamlessly sharing data in an inclusive way. This involves four essential considerations:
1 – Linking procurement and sourcing with supply chain
One key area of supply chain convergence involves connecting procurement and sourcing with supply chain management.
Historically, these functions, with different goals and objectives, have been disconnected, with communication lacking. Supply chain management wants to deliver to customers, while sourcing and procurement want to lower costs. What’s more, the two more often than not run on different systems, making collaboration near impossible.
“But if the two don’t work together, supply can’t successfully meet demand,” says Zhong. “Procurement and supply chain need to converge.” Technology can enable this critical convergence, helping information to flow and creating a unified view of spend and cost. Once technology connects procurement and supply chain, supply chain convergence across the entire company becomes easier, Zhong says.
2 – Harnessing the right type of technology
Selecting the correct technology is key, and it can mean the difference between success and failure when working toward supply chain convergence. A modern platform with built-in data analytics and embedded artificial intelligence (AI) capabilities allows organizations to reach true convergence, aptly hedge risk, and cope with any severe or lingering disruptions like pandemics or inflation.
3 – Incorporating convergence to help with sustainability
Organizations that embrace supply chain convergence are also better positioned to meet sustainability goals. “If procurement and supply chain are not working together, you can’t improve sustainability,” says Zhong. “You need a wholistic picture of your ecosystem to accomplish your Scope 3 goals.”
4 – Improving supple chain maturity and cost savings
Finally, companies that pursue supply chain convergence improve their supply chain maturity while reducing costs company-wide. For example, improved convergence helps keep inventory levels stable and product and service levels high, meaning customers come back for more. This also allows business leaders to manage spend more effectively.
In today’s world of increased risks, more complicated supply chains, and high customer expectations, working in silos is no longer sustainable. Supply chain convergence is the way of the future.
GEP helps companies with transformative, holistic supply chain solutions so they can become more agile and resilient. Our end-to-end comprehensive, unified solutions harness technology to change organizations for the better. To find out more, visit GEP.
