Building a New Resilient Supply Chain

The global marketplace today can perhaps be described as volatile. Prices are on the rise, shortages are popping up unexpectedly and in unexpected places.  Many major retail grocers are expecting center store sales to increases, an indication of things to come.

While supply chains have become more extensive and interconnected, they have also shown unprecedented instability in the face of disruption. In the wake of COVID-19, the fragile stability of lean supply chains found difficulty in recovering quickly in the face of disruption.  What has emerged is a succession of supply side ripples across multiple industries. The ripples collide until at last they reach the end of the line and, similar to the domino effect, as one chain ends another begins in sequence.  Many of the assumptions upon which the lean manufacturing model was created, were undone by market and environment variables that emerged during the onset of the COVID disruption.

Organizations are beginning to accept a pretense of recovery amid a truly formidable challenge of accelerated customer demand and labor shortages, and while research indicates that retail sales can grow by as much as 10.5% to 13.5% to generate more than USD 4.4 trillion in this year, there are concerns. Having undergone unprecedented and unwelcome change throughout the past year, suppliers require stability and flexibility to tackle the surging demand. Resisting instability forms the key priority for retail suppliers, which brings focus to resilience.

21% That’s the number of respondents in a recent Gartner survey who affirmed that they have a resilient network at present. Giving context to the figure, resilience implies elevated visibility, persistent velocity in moving product from source to destination while avoiding supply chain constraints. In this current moment of volatility in the market, it is imperative for retail suppliers and retail enterprises to increase their supply chain resilience.

Becoming more resilient is no longer a luxury for supply chain leaders. The long-standing tradition of lean manufacturing and its entrenched philosophy will be the challenge to overcome. Supply chains need to be efficient as well as resilient, and practices such as redundant supply chain operations, alternative factories, and ample safety stock need to be developed in parallel with productivity and performance improvements.  Supply chains also need to maintain compliance substituting lesser performing partners for those more suited following the COVID disruption. The widespread disruptions affected supply chain monitoring and audit and while enforcement may have been relaxed, performance improvements can only be brought about by effective monitoring and accounting. In order to holistically build a resilient supply chain network, retail suppliers need specific data elements to be incorporated into their supply chain and a robust solution methodology which combines five important elements is key.

Connectivity

A surefire approach to building supply chain resilience in retail is ensuring anytime, anyone, anywhere communication, systems need to be ‘access anywhere’ supportive of SSO (Single Sign on) and active directory. Manual partner-to-partner communication requires a lot of paperwork and must be reduced in light of staffing shortages.  Manual communication methodologies lead to errors and errors mean more human intervention. Automatic and secure document flows compatible with multiple enterprise level system and capable of a variety of data interchange formats and in real time delivers resilience.

Flexibility

A significant aspect of resilience is ironing out friction within the network. A resilient supply chain must be flexible and able to fix critical issues with the least amount of effort.  ‘Fix-on-the-fly’ functionality reducing human interaction increases flexibility. An efficient business rule manager is key to incorporate such flexibility. Reusable business rules ensure seamless partner onboarding and transaction integration.  Reusable sets of business rules allow for the conservation of scarce technical resources and ease of use.  The addition of reusable rules to rule sets to overcome existing issues, and proactive alerting based on business rules means time to make a correction where and when necessary. Change, through a business rules engine can be automated and in real time. Audit functions mean changes can be rolled out, and rolled back if that become necessary.

Adaptability

Perhaps the greatest lesson that the past year has taught suppliers in retail has been the importance of adaptation. The transition to digital and the prominence of ecommerce platforms has been well documented in the retail industry. An omnichannel strategy covers all potential channels for distribution and sales. An omnichannel strategy makes sense amid market disruptions such as we’ve seen this past year and a half.  An omnichannel strategy means demand can be met with convenience and speed. While a stand-alone omnichannel strategy as a solution is one way to meet demand, leveraging a common process workflow to bring transactions in or out of the enterprise the same way every time means an increased ability to create multiple trading relationships and do so quickly. By eliminating the need for additional support or maintenance, a common process workflow takes partner on boarding to a new level while increasing the utility of business rules reduces the dependencies on map and mapping activities. Combining centralized B2B communication with such a workflow results in a highly independent system in which transactions and business processes are handled automatically, accounting for connection changes, partner onboarding, acquisitions, mergers and complete enterprise migration without adding disruption.

Accountability

With much of the COVID disruption behind, and planning and change ahead, compliance has never been more important for retail suppliers.  A flexible and effective event notification processor to stay on top of supply chain events and issues in real time becomes a valuable tool. Such rules-based processing must be backed by comprehensive audits, reports, and analytics.  Such tools must be visible across the internal supply chain operation. Transaction transportation, transformation and integration tools must include analytics to ensure consistent business operations, keeping disparate teams in touch with the latest goings-on in the supply chain domain.

The Way Forward

Accepting resilience is just the first step. The path includes overcoming challenges like supply chain and labor shortages and success in resilience is achieved by combining five key elements:

• Centralized communication across multiple methods, formats, and platforms
• Flexible business rules, business rules management, and alerting.
• An adaptive common processing workflow that simplifies onboarding and processing
• Visibility, accountability, and adaptability
• Easy access to these key elements and in one place.

A resilient path will quickly deliver an elevated level of performance, particularly important as the retail industry begins to leave the COVID disruption behind and starts to engage with the new normal.

While the number and complexity of supply chain initiatives seem to grow season after season, a few remain on the top of such initiatives.  A combined study of supply chain leaders completed by Bain & Company and Microsoft identified digital agility and resilience as top priorities in their choice of supply chain software. The study also indicated that many supply chain senior executives, who once viewed their supply chain as a “cost center,” now see them as a “strategic capability.”

What the study appears to indicate are a number of strategic areas for future-proof investment, the ability to generate granular data sets to enable in-depth visibility and provide actionable insights, and of course, an omnichannel strategy that ensures consistent customer experiences across websites, mobile apps, social media accounts, and brick-and-mortar stores.

Intelligent Technologies to Drive Smart Supply Chains

Granular data, in-depth visibility, and actionable insights naturally come together conversationally when we begin to reconstruct business strategies, post COVID-19. Solutions that store transactional details provide granular data sets, which then provide much needed visibility that generates insights across partners, customers, and channels.

When an omnichannel strategy exists, the combined insight provided by solutions that store transactional details allows for advanced customer segmentation, empowering companies to build more detailed, customized experiences based on the needs of the partner, customer, or channel populations and experiences. No wonder then that the most successful brands are looking to harness intelligent technologies to adapt to fast-evolving consumer demands and market challenges.

While some may believe a lack of resources or investment opportunities are inhibiting the next steps, supply chain leaders have begun to realize they need to proactively seek resources or opportunities, anticipate supply-side change, and be somewhat agile themselves in order to make decisions that increase sales avenues and address customer needs.

Why Customer Insight?

The market is full of options and today’s customers have an abundance of choices, many of which are just a few clicks away. Working from home has greatly reduced travel times to and from work. It follows that the general population can spend more time on experiences that engage them personally and, according to a recent survey, 75% of millennials value experiences over things.

Experience, or more specifically, a positive experience, is derived from the utility offered and a utility that offers easy access to goods and services is more preferable to price. The outcome of this level of business-critical thinking suggests that it has become imperative that brands begin to understand evolving customer desires and delivery experiences that delight, which brings us back to strategic areas for future-proof investment.

Combining strategy and future-proof investment together ensures that the customer is at the center of supply chain planning. Only those organizations that have an in-depth connection with their customers can monitor their behavior, analyze trends, and select the right channel to maximize customer reach and engagement. Sellers must ensure that products and services are available to their targeted buyers and on all channels.

Businesses with an omnichannel presence enjoy 90% higher customer retention over those that do not. Adding availability and convenience by way of an omnichannel strategy ensures consumers can switch between devices and screens to complete a task. Creating digital for targeted buyers on all channels, generating granular data sets to enable in-depth visibility, and providing actionable insights brings it all together.

Integrated Platforms for Data-Driven Supply Chain Transformation 

Cross-channel insight is not likely to be found across multiple integrations or within a
“black box” infrastructure that is several decades old. Modern organizations need modern integrated platforms that work with smart solutions and intelligent interfaces. Many modern organizations are now enhancing their processes with intelligent autonomous systems powered by digital innovations like the Internet of things (IoT), artificial intelligence (AI), and machine learning (ML) to design a truly customer-centric supply chain.

Modern integrated platforms are AI/ML-enabled, can gather data from touchpoints across channels and partners, and deploy advanced data analytics that help analyze the information to find inefficiencies and potential ways of improvement. Such data-driven approaches help supply chain leaders forecast demand, get real-time updates across the network, and track product movement from factories to the shopping floor.

How AI Enables Channel Discovery and Optimized Delivery

Using the business needs and supply chain challenges described in this paper, we have identified five ways to introduce IoT, AI, and ML into supply chain initiatives to help companies select the most optimized integration channel and ensure uninterrupted delivery to maximize revenue generation:

1. Streamline partner onboarding: AI can automate and streamline the complex processes associated with managing channel partners, particularly if there are a lot of trading partners, a number of repeatable processes, or a large number of paper-based documents. AI helps identify repeatable processes based on a partner’s system configuration and data formats to speed up the partner onboarding process and ensure faster channel deployment.
    
2. Use business insights to pick the right channel: Manufacturers use a range of channels to sell products and, as those channels increase in number and in complexity, manufacturers need data to maximize the revenue produced through each channel. Solutions, which store transactional details and provide granular data sets, can be leveraged to deliver visibility. Visibility generates insights across partners, customers, and channels, and contributes to better decisions. Solutions that leverage real-time data from the live environment, and then use AI and advanced analytics, can help pick the right channels in which to invest. At this point, we can probably agree that better decisions lead to better outcomes.
    
3. Customize customer journeys: The world’s most recognizable and successful brands harness intelligent technologies to adapt to fast-evolving consumer demands, market conditions, and market challenges. IoT, AI, ML, big data, and easy-to-use analytics can be used to create in-depth customer profiles based on external data such as demographic models and purchasing behavior. Solutions that store transactional details allow for advanced customer segmentation, empowering companies to build more detailed, customized experiences based on the needs of the partner, customer, or channel population, where delivering a consistent brand experience facilitates customer engagement at the right moment and in the right channel.
    
4. Empower channel partners: Maximizing channel revenue also depends on how effectively supply chain partners like dealers, retailers, and distributors can attract new customers and deliver products via a compelling customer experience. A supply chain platform that provides seamless and timely integration with intelligent technologies will provide partners better tools along with the ability to deliver at the customer touchpoint.  Selecting smart solutions with intelligent interfaces empowers channel partners.
    
5. Measure performance: Leveraging access to data across channels and partners, modern organizations can effectively measure not only partner performance but their own performance in terms of sales, reach, engagement, and the depths of those engagements. Translate those processes into the selection of a new partner. Compare a partner who can process orders and invoices against a partner who can process orders and invoices, contracts, and chargebacks, and also maintain inventories; it’s a new game and works very similarly in the freight and logistics space just as well. For instance, say, you have two transportation service and logistics providers (TSLs) pitted against each other. While the first one can process shipments and invoices, the other can process shipments and invoices plus offer warehouse services such as the ability to pick, pack, and ship automatically, based on your need to supplement your business where and when needed. Selecting solutions with built-in reporting empowers your business by delivering the capacity to measure and display your own performance.
    

Toward an Automated Channel Discovery Process 

Market research has shown that digital tools can automate 80-90% of supply chain planning, and digital technologies such as AI can reduce inventory by up to 75%. In order to achieve a fully AI-powered supply chain, they will need a holistic view of all operations including application integration, along with an understanding of their business goals.

Smart solutions with intelligent interfaces deliver granular data and AI-powered platforms close the gap between channel performance and desired business outcomes. An optimized solution, one without human intervention, produces a self-driving supply chain. Such a supply chain reduces delays, costs, and losses in revenue, and delivers precision to a well-defined channel strategy.

About PartnerLinQ: Enterprise Connectivity at the Speed of Business

PartnerLinQ is an innovative, process-centric, easy-to-use integration platform that enables API-led, cloud-native integrations. It easily handles both standard and proprietary file-based formats, including custom integrations. The solution is well suited for retail, e-commerce, wholesale, transportation, 3PL, as well as distribution, digital, and analog partner extensible platform. It helps your team achieve operational efficiency and gain real-time visibility.

PartnerLinQ was designed and developed by a team with more than 25 years of deep integration experience.  The PartnerLinQ team has been providing industry-focused leadership in technology and consulting and in the development of innovative solutions that drive global supply chain transformation from the factory floor to the consumer’s doorstep. PartnerLinQ integrates natively with Microsoft Dynamics 365, while also providing robust support for more than 70 ERP systems and ecommerce platforms. PartnerLinQ is a completely integrated solution that consigns big VAN and iPaaS solutions to the past. PartnerLinQ is a modern platform with the technology of tomorrow, providing enterprise connectivity at the speed of business today.

Reimagining the Consumer Electronics Supply Chain: The Three Key Challenges for 2021

Disrupted Supplies

In March 2020, McKinsey forecast[1] electronics companies could face serious reductions in inventory due to epidemic-induced factory shutdowns. This was a clear signal to electronics suppliers that the diversification strategies initially developed during the predicted US-China trade war were quickly becoming a recommended path.

But while companies scrambled to onboard suppliers, the move could not mitigate the disruption. 53% of electronics industry leaders were anticipating delays or cancellations in new product launches by May 2021, with 91% of the shortage attributed to challenges in supply chain management [2].

Frenzied Demand

The need for semiconductor chips has continued to surge with the advent of newer automotive technologies such as electric vehicles, collision avoidance and automatic braking systems, real-time navigation, night vision, and lane-change warning systems. There’s no predictable relief in demand for these and other advanced technologies involving artificial intelligence and autonomous vehicles.

The Semiconductor Industry Association has projected global chip sales to grow 8.4% in 2021 – a massive 5.1% hike in a $433 billion industry. With much of the world’s workforce having migrated to home offices and home-based leisure activities, computers, tablets, and gaming consoles are in high demand and chip production is struggling to keep up. A year after McKinsey’s original forecast, the world’s biggest chipmakers like AMD and Qualcomm continue to announce new shortages.

And the impact is not limited to consumer electronics or sub-systems. GM extended its automobile production cuts in the US, Canada, and Mexico; other automotive giants like Ford, Honda, and Fiat/Chrysler have also warned investors about slowdowns in new vehicle production due to chip shortages.

So has begun a cycle of delayed customer value and intense competition among vendors and a new race to market supply chain capabilities which hold the key to delivering increased value in the supply chain.

Challenges in Supply Chain Management

This widespread shortage in semiconductor chips has underlined the critical role of their supply chain in today’s economy. While optimized supply chains in the electronics industry had helped temper the explosion of IT and digital services in the past two decades, several unexpected factors have since emerged with the potential to disrupt the optimized global model.

There are three key challenges –challenges of immediate concern and which the consumer electronics supply chain needs to address in order to deliver the right product, in the right quantity, at the right price, place, and time.

Geographical Concentration

The world’s largest chip makers continue to largely depend on manufacturing centers in China. While some supply chains had begun to migrate towards other manufacturing centers, such as those in Malaysia, Thailand, and Vietnam, these migrations occurred very close to the beginning of the pandemic.

Since then, China, who recovered rapidly from its pandemic-induced slowdown, continues to dominate US electronics imports, while the other centers have been slower to respond. They also have the disadvantage of being newer players in the market, which means less depth in terms of production inventories, staff, and other resources. 

Such geographical concentration of manufacturing activity carries an inherent risk, which was laid bare first during the US-China trade (tariff) war and then by the global pandemic. Given China’s existing supply and production infrastructures, most of the larger manufacturing entities have decided to stay put. A recent PwC survey said as much, stating that most companies are planning a ‘China +1 strategy’ once the pandemic subsides. This strategy involves relying on China as the primary source, while looking to one other country as a strategic manufacturing alternative.

US companies are similarly keen to nearshore operations to countries like Mexico; however, all of these plans have been complicated by uncertain economic and trade climates.

Product Lifecycle and Complexity

Advances in technology and rapidly changing customer behavior have also had an impact on the life of the average electronic product, leading to challenges in supply chain management. Companies have to carry larger inventories or depend on faster inventory turns; this increases overall inventory costs and significantly impacts the bottom line in the event of a short lifecycle product or worse, a product failure.

Electronics companies push for newer and more complex product variants to remain competitive. Having outsourced part or all of their manufacturing process to specialized centers, they remain vulnerable.

Integrity of Supply

Vulnerabilities increase as product components move through multiple facilities and geographies and the chance of counterfeits increases. A lack of supply chain visibility makes components and raw materials increasingly difficult to trace. While companies spread out the manufacturing of parts and assemblies across regions to reduce the risk, vulnerabilities continue to appear.

‘Nearshoring’ and localized manufacturing have the potential to enhance traceability of parts and assemblies. But consumer electronics supply chains also need solutions with increased visibility capabilities to strike a balance and mitigate multiple risks simultaneously.

Working Towards a More Distributed Supply Chain

Over the last few decades, consumer electronics companies have leveraged their global supply chains for cost advantages and specialized manufacturing expertise. But factors such as tariffs, the fallout from the pandemic, and a perceived failure of just-in-time logistics have renewed the push for regionalization.

Industry leaders must be proactive to ensure a more distributed and more collaborative future. Consumer electronics supply chains need digital solutions that facilitate easy entry into new markets and with new suppliers, centrally optimize their supply chains, and provide an end-to-end visibility from point of order to delivery.

Integrated Systems for Enhanced Collaboration

Investing in enterprise IT and supply chain solutions to optimize individual business processes shows promise. But these investments often lead to multiple solutions, ranging from spreadsheets to portals to demand and supply chain planning tools, many of which are loosely integrated at the enterprise level.

As a result, supply chain partners continue to operate on multiple systems and platforms, creating an even larger integration challenge. Network architectures with limited flexibility cannot accommodate multi‐party, multi‐tier supply chain structures that exist between customers, manufacturers, and trading partners.

A modern supply chain in the electronics industry needs access to real‐time supply and demand transactions. It needs a flexible platform that allows each company in the supply chain to implement its own processes – one that makes sense to their culture and way of doing business. More specifically, the platform should drive visibility, planning, communication, analysis, and execution in perfect orchestration across unlimited numbers of trading partners.

Such a platform will allow trading partners to execute activities in their own home-based systems and communicate along the supply chain as required for order to cash, freight, and trans-ocean transactions. This makes an agile and scalable cloud‐based architecture all the more critical. An easy-to-deploy supply chain solution can help organizations build their capabilities in stages. This ensures immediate and incremental value at each stage, paving the way for self-funded deployment and reserving capital for events yet to unfold.

About PartnerLinQ: Enterprise Connectivity at the Speed of Business

PartnerLinQ is an innovative, process-centric, easy-to-use EDI solution that enables API-led, cloud native integrations. With a simplified B2B communication engine that includes EDI, AS2, SFTP and real-time APIs, PartnerLinQ is a fully integrated platform and easily handles both standard and proprietary file-based formats, including custom integrations. The solution is well suited for retail, e-commerce, wholesale, transportation, 3PL, as well as distribution, digital, and analog partner extensible platform and helps your team achieve operational efficiency and gain real-time visibility.

PartnerLinQ is designed by a team with more than 25 years of experience in providing industry-focused leadership in technology and consulting and in the development of innovative solutions that drive global supply chain transformation from the factory floor to the consumer’s doorstep. Hosted on Microsoft Azure, the PartnerLinQ platform integrates natively with Microsoft Dynamics 365, while also providing robust support for integration with other ERP systems as well as e-commerce platforms.

 

[1] Knut Alicke, Xavier Azcue, Edward Barriball. (Mar 2020). McKinsey. Supply-chain recovery in coronavirus times

https://www.mckinsey.com/business-functions/operations/our-insights/supply-chain-recovery-in-coronavirus-times-plan-for-now-and-the-future

[2] Supplyframe. (May 2020). Supplyframe Electronics Sourcing Report.

https://supplyframe.com/press-releases/supplyframe-electronics-sourcing-report-highlights-innovation-imperative-amid-covid-19/

The PartnerLinQ Advantage: 5 Key Value Adds for Food and Beverage Supply Chain Optimization

Foodservice on the Rebound?

Consumer interest had increasingly tilted towards experiences like travel, movies, and entertainment over the last decade. So being homebound over a year and a half has naturally created a void in people’s lives, with a craving for activities that create memories and provide entertainment. This was reflected by an immediate increase in restaurant transactions when municipalities tentatively eased restrictions for on-premises dining in 2020. And following a widespread rollout of vaccines in the US, consumers are becoming more confident about eating out. The first signs of a shift in spend pattern are already evident. The US Census Bureau’s Advance Monthly Sales for Food Services1 show a surge in April sales for food services and bars, with dollar sales up 15% from a pre-pandemic 2019 and a whopping 116.8% over last year. As per a NielsenIQ survey2, 62% of Americans miss eating out at restaurants the most and 28% of households are planning more trips to restaurants and bars than they did in 2020.

Reimagining Customer Experiences

Foodservice outlets are also innovating in terms of customer experiences and product offerings as their buyers still prefer contactless, hands-off transactions. Quick-service giants like McDonald’s and Burger King are redesigning premises3 with smaller dining rooms, more pick-up options, and a distancing of store operations from guests. Some like Maggiano’s are presenting a whole line of pre-cooked meals for consumers to take home and eat later. As restaurants desperately try to recapture lost sales, they are boosting up their catalog of digitally-delivered meals to ease household cooking burdens and provide in-home restaurant experiences. New methods of delivery like on-demand food trucks and in-garage grocery delivery services are picking up, while brands like Albertsons, Domino’s, and Kroger are experimenting with sophisticated technological alternatives like robots, drones, and driverless delivery services.

Food and Beverage Supply Chain Optimization: A Continuous Process

But the F&B industry also needs to continue looking for ways that optimize supply chain and partner networks in order to meet quickly evolving market demands. Many food makers and distributors are facing impediments like labor shortages, supply constraints, and high freight costs, which make it difficult to deliver all their products on time. Retailers had overlooked such deviations for months during the pandemic. But they are less willing to accommodate now as companies strive to get back to business-as-usual amid a reopening economy. Big buyers like Walmart are imposing chargebacks on suppliers for late deliveries or incomplete orders, while Kroger has launched a new ‘supplier discovery program’ to add new, diverse, and more reliable suppliers for farm produce, bakery, meat, seafood, and dairy.

On one hand, friction between food retailers and their suppliers adds costs across the food value chain. On the other, end-consumers are struggling to come to terms with job losses or other financial hardships brought on by the COVID-19 pandemic. Buyers are growing increasingly more price sensitive; IRI data4 indicates that a 10% increase in the price for edible products could reduce sales volume by as much as 17%.

The PartnerLinQ Advantage

To fully utilize a period of increased demand, PartnerLinQ provides food service organizations a number of distinct advantages to extract maximum value out of their supply chains.

Easy Partner Onboarding

F&B companies need to rapidly onboard new sales channels and supplier partners to take advantage of opportunities as and when they emerge.  PartnerLinQ supports EDI communication as well as direct B2B transfers to and from non-EDI organizations. It also supports a wide range of common data interchange standards to ensure reliable and secure communication across partner networks. With its EDI-optimized business rule engine and extensive preconfigured business rule library, PartnerLinQ increases the flexibility to connect with partners on their own terms and makes it possible to respond faster to partner-driven changes.

Automated End-to-End Workflows

PartnerLinQ’s infinite job scheduler allows organizations to configure, schedule, and execute multiple transactions simultaneously, including features like a bulk transfer of business-critical data to trading partners without any human intervention and without interfering with other business processes. Removing hands-on processing means that F&B organizations can ensure fewer errors and improved customer relationships, leading to improved delivery of goods and services and reduced customer turnover. A streamlined and automated communication process enhances compliance and helps avoid fines due to SLA breaches, payment delays, and performance gaps. PartnerLinQ’s built in auditing functionality gives F&B organizations the information to combat chargebacks and provide proof of delivery to end customers.

Smarter B2B Integration

PartnerLinQ integrates natively with Microsoft Dynamics 365 and can be integrated with other ERP systems at the same time without the need for additional licensing or subscriptions. It also provides robust support for EDI integration with dozens of ERP systems and ecommerce platforms. This allows foodservice businesses to shift seamlessly between EDI ERP and API-based integrations and with corporate parent companies or wholly owned subsidiaries at the same time, making support and maintenance more efficient, more attractive, and less vulnerable. F&B organizations can enjoy seamless connections with all network partners and a variety of internal systems while deploying multiple supply chain solutions within a single platform.

Hybrid Cloud Architecture

The food supply chain software ensures a simple and robust cloud deployment that minimizes infrastructure costs and enhances analytical reporting powered by Azure’s serverless, scalable, event-processing engine. A hybrid cloud architecture provides the most agile, flexible, and frictionless way to exchange B2B data, enabling further F&B supply chain optimization and empowering foodservice companies to take on the complexities of a multi-enterprise, multi-application integration process. In addition, they can now enjoy real-time visibility to garner insight and control across the entire value chain.

Omnichannel Integration

PartnerLinQ’s multi-channel integration capabilities allow it to combine perfectly with a Headless Commerce architecture, which separates the front- and back-end of an ecommerce solution to enable faster and more flexible customer experiences. It is also aligned with a unique CSP program and a layer of API integrations, delivering tailored experiences unique to customer preferences.

Gearing Up for the Next Normal with PartnerLinQ

In addition to a digitally-empowered F&B supply chain optimization, PartnerLinQ helps foodservice companies increase throughput, establish and enhance supplier relationships, keep track of deliveries and stay on schedule, while reducing chargeback risk and taking on new market opportunities and additional channels in the new normal. PartnerLinQ’s food supply chain solution also helps manufacturers keep traceability in house, remain in line with customer preferences, and increase connectivity across channels – both traditional and e-commerce.

Endnotes:

1. https://www.census.gov/retail/marts/www/marts_current.pdf
2. https://www.nielsen.com/us/en/insights/article/2020/understanding-consumer-sentiment-can-help-companies-adjust-as-the-u-s-begins-to-re-open/
3. https://www.bakingbusiness.com/articles/53819-foodservice-adapts-new-concepts-as-it-recovers
4. https://www.iriworldwide.com/en-us/insights/publications/cpg-pricing-promotion-revenue-growth-during-inflation

Four Steps for CPG Supply Chain Network Optimization

Businesses and individuals will struggle to associate the words ‘high-point’ with 2020; amazing as it sounds, that has been the case for the consumer packaged goods (CPG) industry as a whole. In fact, the CPG sector grew 19% in 2020 according to NC Solutions – a firm that has been providing research-based insights for more than 10 years to help brands target the right segments on the basis of in-store purchase behaviors, optimize in-flight campaigns, and measure the outcomes.

The upward trend on its own, and in comparison to the years prior to 2019, has not been predictable or uniform. While some companies enjoyed an unprecedented surge in demand, others suffered drastic sales declines.  There were rapidly deployed workforces and simultaneous lay-offs due to lockdowns.

Despite all this turmoil, the CPG industry overall is definitely in a much better place to take on an uncertain future when compared to other sectors in this brave new world.

Changing Priorities in Changing Times

The momentum of CPG companies has historically comprised gradual shifts in priorities as business changes are observed and accounted for. Incoming waves of wax and wane in the early days of 2020 caused concern for most companies who wanted to ensure the health and safety of customers and employees. Safeguarding cash balances and optimizing supply chains came later in the year; later still were efforts to build new supplier networks, optimize existing networks, and make them all more resilient.

Now, with western economies largely emerging from the crisis, attention has again turned, towards return to business and recovery. Business leaders across the CPG sector are starting to see some measure of an economic rebound; this is also the moment when they are beginning to consider long-term strategic moves as the future unfolds and looks much different than what they had envisioned last year at this time.

Cost and Availability: The Key to Customer Retention

Most consumers will need some time to recover and return to more normal levels of spending. Consumer demand for toilet tissue, cleaning products, bottled water, and personal protective equipment (PPE) has just about returned to a normal level.  McKinsey projects that 40% of US buyers are now more mindful of where they spend their money, while 31% are choosing less expensive products.

Consumer spending is also predicted to continue to focus more on essentials, groceries, household supplies, and less likely to focus on PPE like masks and gloves.  Consumers are also being mindful about their spending with regard to savings – the personal savings rate in the US amounted to 13.7% at the end of 2020, compared to 11% in 1960.

Many consumers, failing to find their favorite products on store shelves in 2020, changed to new brands that were more readily available. Driven largely by value and availability, more than 60% of global consumers tried a different brand or shopped at a different retail outlet. Trends like online ordering and delivery and remote working were all accelerated, leading to the digitalization of some business processes – changes that were previously projected to take place over decades happened in days.

So success for an omnichannel brand also depends on the right value proposition for CPG products and efficient supply chain planning towards supply chain network optimization. How much can the product command in terms of price and at what cost? What CPG supply chain management initiatives can ensure that the product is available where and when the consumer wants it and what variables are likely to impact that state?

As new consumer behaviours begin to emerge in all areas of everyday life, CPG companies need to use this transition period between the crisis and the new normal to rethink their consumer-decision journey and enhance and improve supply chain efficiency.

The Four Stages of Supply Chain Network Optimization

In a price-conscious CPG market, supply chain managers are desperate to optimize costs and increase supply chain throughput. The increasing number and complexity of sales channels demand end-to-end supply chain visibility as products travel from manufacturing centers to the end-customer; such transparency at the speed of business requires a digital supply chain.

As businesses embark on digital transformation initiatives to improve supply chain efficiency, they will need the right supply chain software to navigate the 4 stages in order to maximize network value.

Stage 1: Connect

End-to-end connectivity across the partner network inevitably concentrates large amounts of information across multiple connections. Facilitating collaboration with other channel partners by forging stronger relationships through efficient and coordinated actions increases end-to-end connectivity. This, in turn, results in increased activity leading to a concentration of information.

While grocers remain important and strategic trading partners, CPG companies will need to connect across various channels, including e-marketplaces and their own web presence. For smaller brands, it becomes a question of finding the channel that best fits their existing or extended distribution model.

Stage 2: Anticipate

Traditional supply chain planning can fail to accurately predict sudden rises or falls in demand as these forecasts are based on historical data. Integration with ‘big data’ systems helps develop a more holistic approach and supports an agile demand plan. CPG manufacturers need to quickly become experts in big data analytics, insight generation, and ROI tracking of investments, particularly for e-marketplaces.

Stage 3: Strategize

Based on the demand forecast, companies would need to respond quickly and efficiently to address production and inventory capacity throughout the supply chain. Factory, logistics partners, and warehouses will have to be coordinated and synchronized to serve multiple goals and partner networks would need to operate in near real time.

All this might require jettisoning legacy services and investing in smarter supply chain software that are designed for faster, point to point communication and at a lower cost.

Stage 4: Control

When a CPG supplier is in a position to manage its demand, production, and inventory, it has more control over its costs, product pricing, and placement. It can take a varied price approach depending on the demands and requirements of a particular buyer. According to Forbes research, the best CPG performers reallocate 2-3% resources per year removing unproductive costs and channelling funds to priority initiatives.

Supply Chain Software to Take on the Next Normal

The lessons learned over the past 14 months  present retail and CPG companies with a tremendous opportunity for improvement of supply chain operations. They can now reinvent themselves for the new normal with more speed, new innovation, and increased agility.

These companies can learn from their own experiences and from each other as they get ready to take on a less predictable future. The right digital investments can help long-term supply chain planning while observing and reacting to consumer behavior and the business environment.

PartnerLinQ by Visionet: Enterprise Connectivity at the Speed of Business

PartnerLinQ is the result of Visionet’s decades-long industry expertise and technology leadership. Hosted on Microsoft Azure, PartnerLinQ is an innovative, process-centric, easy-to-use EDI solution that enables API-led, cloud native integrations. With a simplified B2B communication engine that includes EDI, AS2, SFTP, and real-time APIs, PartnerLinQ is a fully integrated platform and easily handles both standard and proprietary file-based formats including custom integrations. PartnerLinQ is well suited for retail, e-commerce, wholesale, transportation, 3PL, as well as distribution, digital and analog partner ecosystems – helping your team achieve operational efficiency and gain real-time supply chain visibility.

The PartnerLinQ team at Visionet has more than 25 years of experience in providing industry-focused leadership in technology, consulting, and in the development of innovative solutions that drive global supply chain transformation from the factory floor to the consumer’s doorstep.

Visionet’s technology practice includes leveraging Azure to build, test, deploy, and manage large-scale enterprise solutions for its clients. So when Visionet set out to build PartnerLinQ, it made perfect sense to build, test, deploy, and manage the PartnerLinQ integration platform from within Azure.

Prepping Up for a Cost Push Inflation

US food makers have been warning about impending price increases over the last few months and since we are all consumers at heart, we can see the evidence at the grocery store. According to NielsenIQ, 50 of the 52 food categories it surveys are reporting higher prices when compared to last year.

This cost push inflation effect can be attributed to a few things: rising commodity prices with the cost of raw materials at its highest in almost a decade, increasing transportation costs, supply chain disruptions, and changing consumer demands.  Acosta’s study on eating habits shows 55% of Americans are eating more at home since the start of the pandemic.

Balancing the Green New Deal with the closure of the Keystone XL pipeline as well as COVID vs consumption are all contributing to a cost push inflation.  The subsequent attack on the Colonial Pipeline directly impacted consumers right at the beginning of the summer travel season. The big question is how businesses can prepare for such unforeseen circumstances, circumstances with real consequences.

Dealing with Cost and Performance Pressures: A Case for a Digital Supply Chain

Disrupted supplies, fluctuating demands, and changing consumer behavior all signal a period of major change for CPG, while events such as an impending cost push inflation will push organizations further towards optimizing costs and reassessing their entire business processes.

While e-commerce continues to gain momentum and smaller and more agile competitors challenge the titans of grocery, the increase in competition has reignited cost and performance pressures like never before. Scale is no longer enough to drive a competitive advantage. More participants plus more channels means more complexity in moving packaged goods from the factory floor to the ‘Bull’s-Eye Zone’ on store shelves.

Modern organizations have worked on ‘lean’ philosophies for decades, but The Economist’s Intelligence Unit reports that almost 60% of its surveyed respondents are looking at changing these strategies and dramatically so. Market participants are more eager to maintain redundancies.  Redundancies in excess capacity and supply chain resilience proved to be more beneficial in 2020 than speed and efficiency.

As a result, the supply chain is no longer being viewed through the lens of being a cost center – rather, supply chain planning has become a strategic imperative and a capability to be invested in.

The Economist’s Intelligence Unit is also reporting that 90% of retail and CPG executives now plan to change their supply chain networks, with more than 40% expecting to increase CPG supply chain investments with a focus on digital agility, supply chain visibility, and resilience.

In short, the very concept of gathering a 360° view of customer information has been unseated by an expanding plan to gather a 360° view of supply chain entities and assets well beyond the classic sense.  What we are talking about stretches the limits of what was once considered practical – we are talking about assets, accounts, items, locations, and legal entities; materials, products, and reference data; suppliers, partners and customers.  The question now is how and where to begin.

Powering Agility through a Digital Supply Chain

Core ideas around alternative factories, multi-sourcing, and maintaining generous amounts of buffer stock are gaining traction, along with the need for cutting-edge technology to enhance omnichannel presence. Big retailers and CPG companies have begun constructing more agile and flexible networks of partners and intermediaries, sources and supply chains, augmenting their pool of primary suppliers with a complete secondary network and tertiary markets that can fill in when needed.

More and more grocers are returning to or developing their own private label brands to supplement their current supplies in an attempt to keep shelves full and counter cost push inflation effects. They are encouraging existing suppliers to build frameworks that allow them to produce in multiple locations, while also returning to inventory policies that have all but reversed cross-dock operations.

Such alternative sourcing strategies are being complemented by intelligent and autonomous systems, powered by digital innovations like Internet of Things (IoT), Artificial Intelligence (AI), and Machine Learning (ML) – all targeting further cost optimization and digital agility across the value chain.

Connected CPG supply chain software can efficiently communicate with each other to enable decision-making without human intervention. Making the most of Industry 4.0 tools will also provide supply chain visibility across all nodes in the partner network and facilitate on-the-fly remediation in case of disruptions.

Countering Cost Push Inflation Effects: Digital Agility and Insights as Business Imperatives

Agility, supply chain visibility, and insights thus become vital for the survival and success of a modern CPG enterprise. More and more supply chain managers are playing a key role across board rooms and contributing to critical and strategic decisions like cost optimization, product and vendor selection, merchandising, and operations.

According to Bain andMicrosoft’s combined study of supply chain leaders, digital agility and resilience top the list of priorities in their choice of supply chain software. The same study identified two key areas for future-resistant investment:

• In-depth analytics for predictive planning: CPG organizations need end-to-end and in-depth supply chain visibility to generate granular data sets, which can then be leveraged to provide actionable insights. These insights lead to better anticipation of supply-side changes and enable agile and real-time decision-making in the face of emerging opportunities and challenges.
• Omnichannel strategy: An omnichannel strategy ensures consistent customer experiences across websites, mobile apps, social media accounts, and brick-and mortar stores and enables customers to shop through all of these available touchpoints. In addition to increasing potential sales avenues and successfully addressing cost pressures, businesses with an omnichannel presence report 90% higher customer retention over those that do not.

Partnering for Crisis-Resistant Growth:  Survival and Success in Changing Times

A very fine line lies between survival and success; after a year of turbulence, CPG is making its way into this new era, the new normal.

The most successful brands are using intelligent technologies to adapt to faster-evolving consumer demands and market challenges like cost push inflation and regulatory constraints. While many still lack in resources to invest, supply chain planning has to take into account preexisting conditions, business plans, and other obstacles that impede progress towards resilience.

Striking a balance between efficiency and resilience is not easy. Increased resilience implies an increase in operational costs, but such costs can be offset by an integrated approach and a technology redeployment. Organizations need a CPG supply chain solution that brings together operational scale and flexibility, analytics and predictive planning, and an omnichannel capability – such digital agility provides the much needed degree of supply chain visibility, flexibility, and resilience that modern organizations need.

What CPG companies (as well as others, including Transportation, MRO, and electronics) need are committed and experienced technology partners who can provide network connectivity, partner communication, and supplier and customer insights and can set them on a path towards crisis-resilient growth.

PartnerLinQ by Visionet: Digital Agility at the Speed of Business

PartnerLinQ is a hosted integration platform for EDI, B2B, and API integration; it is the result of Visionet’s industry expertise and technology leadership. The PartnerLinQ team at Visionet has 25 years of experience in providing industry-focused technology, consulting, and innovative solutions that drive global supply chain transformation from the factory to the end-consumer. Hosted on Microsoft Azure, PartnerLinQ is an innovative, process-centric, easy-to-use EDI solution that enables API-led, cloud native integrations.  It includes a simplified B2B communication engine that combines EDI, AS2, SFTP, and real-time APIs and easily handles proprietary file-based formats and custom integrations. PartnerLinQ is well suited for retail, e-commerce, wholesale, transportation, 3PL, distribution, and digital and analog partner extensible platform, helping your team achieve operational efficiency and gain real-time visibility.

Visionet, a long-standing Microsoft gold partner, leverages Azure to build, test, deploy, and manage large-scale enterprise solutions for its clients; so when we set out to build PartnerLinQ, it made perfect sense to build, test, deploy, and manage the integration platform from within Azure.

Smarter B2B Integration: A Must-Have for Food & Beverages Supply Chain Networks

Consumer spending on food had been remarkably consistent in the US from 2016 to early 2020. As per McKinsey’s study, growth hovered around 4% annually, while total spend was almost evenly split between retail outlets like grocery stores and supermarkets and food service organizations like restaurants, fast-food locations, coffee venues, and school and office canteens. While the COVID-19 pandemic drastically impacted margins for almost all business segments, the food & beverages (F&B) segment rode the storm better than most. From $6196.15 billion in 2021, the industry is expected to reach $8163.61 billion in 2025 at a CAGR of 7%.

Yet, March 2020 upended the distribution of consumer spend dramatically. Amid lockdowns and the perceived health risk in public places, people preferred staying and eating at home. Sales in groceries and supplies grew 29% compared to the previous year, while food service centres saw a corresponding dip of 27%. More cooking at home led to more staples sales, while consumers increasingly turned to comfort food to cope with heightening anxiety. Canned soup sales were up 200% year on year, frozen food 40%, potato chips 30%, and popcorn 48%.

Rebalancing Supplies to Address Changing Demand

Over the years, F&B distributors have been running a balanced and optimized supply chain where upstream orders come in based on the forecast of downstream orders going out. As a result, revenue margins were also largely dependent on a steady flow in both directions.

But with the rapid shift in consumer spend pattern brought about by the pandemic, the previously balanced system was completely upended. Downstream orders came to an abrupt halt with restaurants closed, but upstream orders kept coming in from the farms, food-service producers, and processors. This led to a clog in the logistical chain as well as shortages in storage space. As distributors cancelled incoming shipments from farmers, food products were stranded upstream, leading to food-security risks for the more vulnerable consumer segments.  

Food distributors have also been by quick-service and casual-dining outlets switching to takeout-only modes of service. Some have partially adapted by taking the online route and initiating delivery services. But those that do not supply to retail channels have had to completely overhaul their sales routes, making their supply chain transformation even more challenging.

Gearing Up for the ‘New Normal’

F&B distributors who managed to rebalance their supplies are now left with overcapacity in their storage facilities and distribution networks. But the pandemic has also taught them a very crucial lesson – about maintaining reliability in supply even at the cost of price. As consumers grow more comfortable with the ‘new normal’, they will continue to save trips to the store given the increased domestic responsibilities they have picked up. While panic buying has ceased, using digital will only continue to increase. Many buyers who preferred to shop offline before the pandemic are now using digital channels having realized the convenience that online ordering provides.

So F&B organizations are increasing production to maintain their presence on retail shelves, while others are scaling up their e-commerce presence. But dilemmas still remain about the means to address demand peaks and the future demand scenarios to prepare for. In addition, consumers need to be reassured, employees protected, and high quality supply maintained even at elevated costs.

For F&B participants from farm to shelf, it is imperative to come up with creative solutions and integrate their collaboration channels to ensure a reliable supply despite intermittent plant closures and demand disruptions.

Supply Chain Integration for Collaboration and Insights

A flexible and agile supply chain can help F&B companies effectively respond to these ongoing challenges. But they also need increased visibility and data from every node of their value chain to generate actionable insights. Lack of transparency exposes supply chains to unnecessary risk; this is exacerbated by using outdated systems or traditional paper tracking and manual inspections. Fragmented information and lack of communication leave parties in the supply network with little to no knowledge of each other’s actions. This leads to inefficiency and waste and generates mistrust among suppliers and their customers. And the problem gets much worse as organizations begin to expand their markets and partner networks.

Increased visibility will also go a long way in keeping operational costs in check. While simple supply chains can optimize costs using spreadsheets, more complex ones are better served by an integrated network solution that does not require customizations for each individual supplier. Modern B2B integration solutions make a business more efficient, more attractive to customers, and less vulnerable to competitive forces. They enable seamless connection to all your network partners, while deploying multiple supply chain solutions within a single implementation process.

Harnessing the Cloud: The Smarter Approach to B2B Integration

The complexities of the post-pandemic landscape are acting as a trigger as more and more industries feel the push to go digital. Only a cloud-based, integrated solution can provide the convenience, scalability, and reliability that food service organizations need for managing data exchange, workflow, and transactions.

Visionet’s PartnerLinQ ensures a simple and robust cloud deployment that minimizes infrastructure costs and enhances analytical reporting powered by Azure’s serverless, scalable event-processing engine. PartnerLinQ is designed to guarantee business success by quickly setting up connections with new partners, customers, and sales channels and seamlessly integrating with smart devices and appliances. It minimizes repetitive processes and works across all data formats and transaction protocols. With PartnerLinQ, F&B enterprises can automate end-to-end workflows, achieve elasticity and scale, and enjoy a hybrid architecture that also integrates with on-premise legacy systems.

As regulatory mandates demand faster and more extensive reporting, customers want more visibility into all aspects of a transaction, and new business models start being formulated, the need for simplified and end-to-end B2B integration becomes more urgent. F&B organizations can no longer afford to work in silos – a smarter B2B integration on cloud can quickly reduce their time-to-market, optimize costs with standard, industry-specific integration processes, and take an omnichannel approach to order fulfilment.

Modernizing the Retail industry through PartnerLinQ

Introduction

No-one could have imagined how our way of life would be transformed by the summer of 2020. Changes in our daily lives, changes in our needs, wants, and desires have impacted individuals and businesses alike as we continue to struggle with the vagaries of life and the ‘new normal’.

The world is still unfolding and evolving. With the arrival of every new season, business reacts to a landscape marked by turbulence and turbidity, clouding our vision of the future or at least how we envisioned it. All the while, technological innovation continues as digital interventions work out difficulties of the new normal and hold the key to connecting and enabling disrupted supply chains, displaced societies, interrupted markets, and businesses trying to survive and thrive.

Challenges to the Retail Supply Chain

While all industries have, and many are still struggling with the effects of this past year and a half, some clearly bore a bigger brunt than the others. In case of retail, grappling with ‘change’ has been a challenge for most retail establishments over the last couple of decades. The severe impact on their supply chains in 2020-21 has accelerated its growing need for transformation like never before.

The beginning of the pandemic saw people rushing to the stores to stock up on all varieties of items. The surge in demand, however short-lived, brought new volatility and the closing of factories and assembly plants the world over has added layers of stress to an already stressed system.

While large swathes of the population went in and out of quarantine, the retail supply chain overall was damaged by a drastic fall in the availability of products used for everyday life. The spikes in demand this spring and the subsequent turmoil were exacerbated by supply disruptions on one hand and the prolific growth of e-commerce on the other. As borders closed and equipment were redirected, shippers and carriers struggled to get raw materials to the factories and distribute finished goods across the supplier value chain.

Consumers too were sceptical about venturing out to a store, with many taking online purchasing seriously for the very first time; by some estimates, e-commerce achieved its next decade’s forecasted growth in just six months. Even after brick-and-mortar shops were back in operation, e-commerce retained its newly broadened share of retail sales.

The New Consumer Market

The digital experience has impacted all our lives over the last 18 months. As human beings, the way we communicate, teach, shop, pay, learn, and entertain ourselves have all taken a digital turn on what we used to call the information superhighway. We have also taken more kindly to merchants and businesses that changed their modes of operation quickly and reacted to this new sort of normal.

These ready-to-engage-and-win establishments came up with creative and innovative ideas to address our needs and kept our lives moving forward, not to mention our sanity. As consumers, we now seem to expect all businesses to understand our immediate requirements, adapt accordingly, and provide an experience that has a long lasting and positive impact on our daily lives.

Adopting Digital Supply Chain Solutions to Address Challenges

Events like 2020-21 do not always have easily available solutions; more importantly, the same set of solutions often cannot be repurposed or retooled to address every crisis or every business, and certainly not as quickly as was necessary in the past year or so. Often, when businesses set out on a new market such as this, they are at a loss trying to determine where to begin and for some retailers, the crisis was an inflection point that allowed them to reassess their entire business processes.

A majority of business leaders agree that the most effective approach is to start by developing a deep understanding of the technology you possess and then working out how such technology can be best utilized to address your immediate needs. While early digital adopters can focus more on accelerating their transformation initiatives, they may need to add some additional capabilities to an already robust order management system or quickly enable services like buy-online-pickup-in-store (BOPIS) and ship-from-store.

On the other hand, organizations that have delayed their digitalization or modernization efforts are now caught in the cross-hairs of unalterable market forces. In addition to a lack of online presence, consumer-facing retailers are facing completely new logistical challenges to facilitate curb-side pickup and consumer delivery. Now, they have to prepare for an environment where a significant percentage of their sales will be forever altered and come from online sources and much more quickly than ever envisaged in any digitalization or modernization discussion.

Keeping Up with Demand

Big change takes time and with stores getting shuttered and with customers rapidly turning to e-commerce for day-to-day requirements, time is something most retailers and suppliers to retail do not have. Brick-and-mortar establishments are realizing that an online presence is imperative for survival and effective consumer models are what retail suppliers call necessary in the new marketplace

Where deploying an online store would take a few months under normal circumstances, the new ‘normal’ has sped up that requirement. Many a retail technologist has been pleasantly surprised by how quickly they could cut through the red tape to facilitate technology that supported new order fulfilment models. Business teams are welcoming collaboration with their technology counterparts to arrive at a holistic strategic approach for the entire organization.

While early and rapid implementations may not always be perfect, engaged technology partners can get off the blocks in weeks. Once the stores ‘re-open’, organizations can begin migrating back to further optimize and enhance their online capabilities, while keeping their businesses running. This is where having a strategic technology partner like PartnerLinQ can help immensely.

Unified Supply Chain Solution to Increase Visibility and Drive Alternative Processes

While the pandemic is abating and relinquishing control in many parts of the world, organizations are beginning to blend their learnings from the past with their available capabilities and newly discovered potentials. They will need to be fit for future growth, and be more resilient to subsequent and wide-scale operational risks. Achieving balance will require scaling value chain visibility, risk awareness, and scenario planning.

Today’s landscape demands a deeper understanding of supplier vulnerabilities and enhanced automated workflows. While ordinary supply chain tools provide visibility, driving an alternative supply chain requires much more, including insight into the sales processes and increased visibility into every component of the value chain. Achieving all of this can be a long and arduous journey; but it can be made easier if you have the right set of tools at your disposal.

PartnerLinQ for Resilience, Insights and Visibility

PartnerLinQ’s supply chain connectivity solution connects your business with your value chain – providing complete visibility into capacity constraints across your first-, second- and third-tier suppliers. Its unified platform supports EDI, real-time APIs, and proprietary file-based formats, allowing seamless integration with e-commerce platforms, digital marketplaces, and your value chain.

PartnerLinQ connects directly with your CRM, ERP, MRP, WMS, and TMS systems, as well as your social channels. The PartnerLinQ platform uses intelligent field-mapping techniques to automatically reconcile your business partners’ data formats to your own; this dramatically reduces onboarding times and leading to improved efficiency with instant benefits and direct B2B communication.

PartnerLinQ’s ‘integration without complication’ facilitates value chain integration and connections with hundreds of supply chain partners, while ensuring a single point of management for your team. It packs enhanced analytical reporting capabilities powered by Microsoft Azure’s serverless, scalable event-processing engine at no extra costs.

Hosted on the Microsoft Azure platform, this unified supply chain solution enables API-led, cloud native integrations, simplified B2B communication, and real-time APIs. PartnerLinQ includes the tools that modern retail organizations can rely on now to build their digital partner ecosystem, achieve high levels of operational efficiency, and gain real-time visibility, to be ready to take on tomorrow’s business challenges.

You are probably familiar with this ‘BIG VAN’ claim repeated early and often by the champions of value-added networks (VANs):

‘The advantage of the network is the network itself.’

The claim, like all wide-ranging quotes, is to some extent only relatively true. Its validity depends upon who you are connecting with and how actively you link up with your trading partners. A closer look at the flow of goods and information within your business network will possibly reveal that no single network or VAN can address all your B2B/B2C communication needs.

While EDI and, in some instances, the VAN does help you connect, connecting with all your trading partners translates into a significantly higher ROI.  EDI today means more than simply X12; it means supporting multiple standards, formats, and transactions from X12, UN/EDIFACT, and GS1 XML trade messages to a number of non-EDI formats like JSON, flat files, text files, and proprietary XML message formats.

Read more: The truth behind the “competitive advantage” of value-added networks

EDI also means accessing a diverse set of communication methodologies – like AS2, MFTP, FTP, SFTP, and APIs – each with their own set of variables. While transaction formats and transportation methodologies make EDI more versatile, the complexity of handling such varied data formats and communication methodologies creates its own set of challenges, particularly when you consider the ‘BIG VAN’ value proposition.

The ‘BIG VAN’ value prop proudly claims that all members in your value chain are available on the same network or VAN as yours; while true to some extent, this is not an entirely accurate assessment. A VAN connection is by all accounts handy and, in some cases, necessary to interact with some trading partners. But it certainly is not everything.

The right tool with the right EDI transportation methods delivers far more effectively than ‘BIG VAN’ and at a lesser cost.

The Significance of the EDI VAN Interconnect

The ‘BIG VAN’ claim is largely backed by the EDI VAN interconnect. The interconnect is a tool that helps your value added network communicate with other value added networks and facilitates exchange of EDI transaction documents between connected pairs of trade partners. The more partners you connect with, the bigger the benefit derived from your communication network.

VAN interconnects effectively reduce friction between and among VANs, while also reducing the need for new VANs. The largest of the VANs reduce VAN-related confusion within partner networks by making claims to connect to thousands of trading partners; in effect though, ‘BIG VAN’ highlights the characteristics of EDI under which all EDI solutions and VAN partners operate. 

But what about transactions beyond X12 EDI? 

‘BIG VAN’ and the interconnect rely on a steady stream of ISA and GS identifiers within X12 transactions to move data, without which the ‘BIG VAN’ is about as useful as a cell phone without buttons.  While the VAN connection does handle X12, what about images, APIs, or XML files? These are typically not included in ‘BIG VAN’ offerings and, in most cases, require a different product altogether, adding to your overall cost.

A closer look at the VAN interconnect reveals that the reality of ‘BIG VAN’ is very different from the claim; if the interconnect connects ALL VANs then ALL VANs have the same access to trading partners, which means that ‘BIG VAN’ has a very different concern. ‘BIG VAN’ is concerned that it will inevitably be relegated to the stature of an ‘Ordinary VAN’ and without reservation. 

‘BIG VAN’ makes a big claim and living up to that claim is becoming nearly impossible.  This makes all ‘small VAN’ operators a competitive threat – why else would ‘BIG VAN’ make such claims if not to control and confuse the market? The VAN interconnect and image files remove the confusion from the claim ‘the advantage of the network is the network itself’; what else is there to the reality of ‘BIG VAN’?

The Synergy

Architecturally speaking, an EDI solution is actually made up of three components (or solution layers, if you’ll pardon the expression) – the transportation, transformation, and integration layers. While EDI is very effective when it leverages a ‘VAN’ connection, the VAN component is only a fraction of EDI, less than 30%.

Think about your VAN connection in the same way you think about how your mobile phone functions.  Your mobile phone functions by combining the services provided by the phone manufacturer, an infrastructure provider, and a telecom company; similarly, EDI functions by leveraging the synergy of these component layers to work as a synchronous whole.

Components of the ‘VAN Solution’

• Transportation. Along with VANs, this layer works using many other methodologies such as AS2, MFTP, FTP, SFTP, and APIs. Most of these methodologies have been around for a couple of decades now. Your VAN, in fact, may still be using FTP to connect you with your VAN mailbox; if it is not leveraging FTP, it is likely using AS2. Get in touch with your EDI team representative and ask, they should be able to tell you.
• Transformation. The transformation layer facilitates translation between different (EDI) formats. Formats like X12, UN/EDIFACT, GS1 XML trade messages, JSON, flat files, text files, or proprietary XML messages are transformed into formats that your ERP systems can easily understand and use.
• Integration. In the final layer, the transformed message is available to be consumed by the ERP. API connectors have been introduced in recent years to connect you with your ERP in a normalized way, much like the ODBC connector you may have used in the past.  The integration layer can be an API or a connector like ODBC or ODATA – the main emphasis here lies in providing (a) the route for landing the messages and (b) feedback that lets you know whether the order was rejected or accepted. The latter is the target, which requires the least manual input.

Do More Connections Provide More Benefits?

The key word is ‘choice’. If one network has the potential to provide a competitive advantage, do multiple networks offer even greater benefit?

The quantity of available networks is only one criteria that determines how effective your network is.  Connecting to multiple VANs is, frankly, a drain on resources, particularly when all VANs make use of the same VAN interconnect. 

While there is a need to be mindful of the connections available to your trading partners, using multiple VAN connections to stay in touch makes no sense at all. It is like having two or more cell phones or cable TV subscriptions, particularly when methodologies like AS2, MFTP, FTP, SFTP, and APIs are available.  Many of these options have low or no cost associated with them while VAN costs are subscription based and incur transaction fees that need to be paid monthly, much like that second cell phone that we referenced earlier.

The AS2 Effect

Application Statement 2 (AS2) is used for a reliable and secure transfer of data over the Internet. It provides a direct, unhindered connection with a trading partner and delivers document receipts and real-time tracking without requiring a VAN or a VAN interconnect. Your standard internet connection serves as the transportation layer; it is payload-agnostic, which means you can use the same tool to transmit images and every business has internet connectivity today. 

Unlike a VAN, AS2 does not typically have monthly charges or transaction fees. It reduces the chances of transaction failure by establishing a one-to-one transmission channel, without the need for a middle man, a VAN interconnect, or a ubiquitous VAN. Also, there is a Message Delivery Notification, but more on the MDN at a later time.

Putting It All Together

Now that we have unpacked the ‘BIG VAN’ claim, we can conclude that your EDI solution should provide more than one communication channel, has to be capable of handling a wide range of EDI formats, and MUST integrate smoothly and automatically with your enterprise systems.

We’ve also come to the conclusion that ‘BIG VAN’ cannot support the features that you need without complicating matters with additional software and subscriptions.

That’s why PartnerLinQ is different. PartnerLinQ is not a VAN; rather, it is a highly scalable, dependable, and configurable EDI and B2B communication solution. PartnerLinQ is ‘integration without complication’ that supports integration with Microsoft Dynamics 365 and other ERP systems. It includes an AS2 solution, FTP, MFT, and SFTP and can connect with any VAN, making it the perfect tool for B2B/B2C communication for your EDI and non-EDI partners.

PartnerLinQ also supports API-based ecommerce platforms like Shopify and Magento out of the box, providing your organization a seamless shift between EDI and API integrations; there’s nothing to add and nothing to buy, it’s all in there.

The solution also operates seamlessly between EDI and non-EDI formats – from X12, UN/EDIFACT, and GS1 XML to non-EDI formats like XML and JSON. While there are too many formats to list in a blog, this is a crucial factor that make PartnerLinQ a perfect choice for your EDI, B2B, and API integration and for smooth communication, while decreasing your reliance on ‘BIG VAN.’

The last few decades were marked by widespread adoption of computers quickly followed by automation; in fact, Industry has not stopped advancing since the Industrial Revolution began in Great Britain (Industry 1.0 1760-1840) more than 200 years ago. Now the way we produce, buy, sell, and trade things is undergoing yet another series of changes, perhaps even somewhat of an upheaval.

Modern manufacturers are today enhancing their processes with intelligent autonomous systems powered by digital innovations like Internet of Things (IoT), Artificial Intelligence (AI), and Machine Learning (ML). The once far off dream of smart factories is a reality; we have surpassed the targeted robotic processes and connected systems we once dreamed of and are enabling decisions without human intervention.

Our systems today, with access to more and more data, are growing smarter by the day, ensuring that our world produces more and wastes less. Industry 4.0 is no longer a buzzword, it’s a reality that suppliers and manufacturers across the globe are struggling with, each playing catch-up in a world undergoing a seismic shift.

Connecting to Deliver Experiences

Harnessing the potential of Industry 4.0 means emerging from the operational mindset. Customers today spend less time ‘gathering’ the goods and services they require as they once did and more time enjoying them. The market today is filled with choice and with choices just a few clicks away, they can spend more time on experiences that engage them personally.

Today’s consumer is all about convenience, shopping availability over price. A recent article cites 75% of millennials value experience over things and expect additional utility from the brands they patronize. The experience is derived from the utility offered by access to goods and services. It becomes business-critical for brands to understand evolving customer desires and deliver experiences that delight.

For manufacturers, factors like on-time delivery, responsiveness to demand, and seamless partner connectivity all add up to a memorable brand experience; as a result, organizations need to augment their digital supply chains across here-to-fore traditionally siloed business areas like manufacturing, planning, logistics, R&D, after-sales services, and maintenance.

The digital supply chain seamlessly connects partners along the value chain and enables organizations to fully realize their Industry 4.0 vision by accommodating design, manufacturing, logistics, inventories, and even asset management.  Industry 4.0 means connectivity and it involves wide areas of your business.

Building a Connected Digital Supply Network

Nearly everyone I talk to these days is on a path to building a connected digital supply network; while they are on the same path, the journey towards Supply Chain 4.0 is different for every business. What has become critical is an understanding of the components that make a digital supply chain reliable, flexible, and efficient.

• Customer-Centric Design

The customer needs to be the front and center of all supply chain planning. Organizations with an in-depth connection with the end-client can monitor their behavior and analyze trends and innovate accordingly. Smart solutions and intelligent interfaces capture real-time data on customer behavior from the live environment and help design customer-centric supply chain and manufacturing processes.

The product development process needs to be deeply integrated with this design concept. In fact, the entire demand chain needs to be understood, documented, retained, and related; only then can you have a deep understanding of your Order to Cash, PO to Payment business processes and realize how and where to make improvements.

• Real-Time Visibility

Siloed functional processes affect an organization’s flexibility, leading to long and cumbersome planning cycles. All too often one process ends and another begins, without bringing about an abrupt end to progress between business units.  Seamless communication and synchronized units provide a unified, real-time view of both supply and demand chains. These processes enable optimization of workflows and include inventory and other services once thought to the outside of the ‘norm’. 

Tracking these data, and further still these transactions, helps increase supply chain visibility and productivity, assisting managers and planners to make informed decisions that are based on reliable insight.

• Timely Delivery

Reliable and timely deliveries top the list of priorities for today’s customers and factors in the convenience of today’s consumer demands. Timeliness is a critical supply chain component that can make or break the customer experience; when the customer reaches for your product and it’s not where they expect it, they can very easily reach for another. Whether they’re reaching for a substitute product or another retailer, the outcome is the same; there’s an opportunity cost for your business and the consumer.

Companies that prepare to leverage Industry 4.0 capabilities can streamline logistics, guarantee better delivery experiences, and reduce out of stock conditions with seamless communication. Warehouses can monitor storage conditions, optimize delivery schedules, and quantify inventories and reorder points, which are often tragically overlooked.

By simply looking ahead to real-time weather and traffic updates with connected vehicles, we can adapt to the best routes based on supply and demand activities and ensure our products and services reach their intended targets on time, every time.

A Digital Supply Chain for Your Next-Gen Intelligent Enterprise

While the ‘chain’ metaphor explains the underlying utility of a supply or demand chain – connected and sequential – it simultaneously depicts a sense of flexibility and strength. The ‘chain’ implies a connection from one point to the next. The business environment today also requires responsiveness and agility which cannot be ignored.

Today’s digital supply network needs real-time insights that drive supply chain visibility, supply chain planning, communication, analysis, and execution – an orchestration of interactions across all critical business units, which is no longer a chain but more of a continuous strap. While the chain metaphor persists, the links previously used to identify business units fades into the background emerging as one continuous loop through which a truly flexible organization enables work and data to flow seamlessly across functional areas. This allows quicker issue detection and resolution, effectively reducing operational and financial risks.

Intelligent technologies power intelligent enterprises; when these are combined as a synchronous whole as they exist in Industry 4.0, they dramatically improve an organization’s ability to navigate the digital economy of today and deliver an experience that exceeds customer expectation.