enterprise supply chain

Your biggest enterprise lever not yet pulled

January 23, 2019 | Richard Donaldson

Did you know, more than 50 per cent of an enterprise’s overall annual budget is spent on supply chain activities? But what if I told you that one of the greatest sources of revenue for your organization is your supply chain? That’s right, your largest area of spend is also your greatest opportunity. Not sales, marketing or even human resources.

The likely supply chain scenario

While all this may be true, supply chain professionals are still navigating a complex system of siloed manual processes when it comes to buying, managing and selling assets that fuel their business. Many supply chain teams are still engaged in offline pen-and-paper processes, typically making supply chain activities time consuming and costly.

But over the course of the next few years, this will rapidly change. The supply chain is facing a wave of innovation as technologies such as the cloud, the Internet of Things, blockchain, augmented reality and others, come together to create a highly efficient, more connected and transparent enterprise supply chain.

What’s more, technology innovations that were once focused on the individual consumer are starting to shift to the enterprise, putting the enterprise supply chain in the spotlight.

Consumer supply chain vs. the enterprise supply chain

Amazon continues to pioneer supply chain management and e-commerce. Rival Alibaba, a China-based e-commerce platform, is now the largest in the world. And eBay, once just an auction site, is now the world’s online marketplace for buyers and sellers to come together and trade almost anything.

All three platforms have fundamentally changed how we buy and sell goods day to day. They have provided efficiencies in time and cost, with goods being delivered from one side of the world to the other within days. Though, to date, these platforms have been largely consumer-to-consumer or business-to-consumer focused, with the business-to-business supply chain completely overlooked. Why? Because consumers shop, and businesses procure.

The difference between consumers and businesses

When a consumer jumps onto Amazon, Alibaba or eBay they often search for products they want but don’t necessarily need. For example, consumer electronics, fashion or a new gimmick. However, businesses buy a solution to fulfill a need. For example, equipment to replace a broken part, material required to build an asset or a service to solve a specific business problem. They don’t purchase on emotion, and generally, they don’t purchase a single item at one time. Therefore, the way businesses engage in e-commerce must be approached differently.

Consider Facebook and LinkedIn. Both are social media sites, but one is for leisure and the other is for business. Both have similar functions but are fundamentally different in the way they are used. Like Facebook, consumer supply chain and e-commerce platforms aren’t built for how businesses work and what they need to be efficient. Which is why, amongst other things, the enterprise supply chain is yet to move ‘online’.

Introducing the new online enterprise supply chain

Despite the last 30 years of e-commerce being dedicated to the consumer supply chain, in the next decade, we’re going to see a shift to the enterprise supply chain.

Global aggregated business-to-business supply chain activity is estimated at greater than $10 trillion dollars. As such, there’s going to be a tsunami of technology focused on the enterprise supply chain. If enterprises simply move this activity online and improve cost and time by 10 per cent, we could see up to $1 trillion dollars in savings.

This will partially be driven by necessity; after all, we’re living in a digital age where we are looking to use digital technologies to drive efficiencies wherever possible, but also from the mere fact that supply chain professionals are consumers themselves, and so, have the same expectations as all other consumers. They have built up expectations for simplicity, efficiency and transparency when it comes to the buying, managing and selling of assets.

Why the time is right for enterprise supply chain digitization

By digitizing the supply chain and moving it online, enterprises can improve their overall supply chain performance in both time and cost by approximately 20 to 40 per cent (and more). They could generate ‘free cash’ through the disposition of surplus material and equipment; for every asset dollar spent, the enterprise could expect between five to 25 per cent of their money back by reselling excess material or equipment through an online e-commerce platform such as Amazon or eBay, but tailored for the enterprise. And finally, by digitizing the supply chain organizations can centralize all their supply chain data on one platform, bringing more transparency, simplicity and ultimately, innovation, to the enterprise supply chain.

As more organizations start to digitize their supply chains, it will create more data to encourage others to do the same. Imagine if you could access all the procurement, operations and disposition data that is associated with an asset through one platform. The insight and opportunity for efficiency and automation is undeniable.

Your online supply chain and commerce platform

Like eBay revolutionized the consumer supply chain by connecting consumers with other consumers, with a platform like Requis we’ll see different industries collaborate in ways we’ve never seen before.

By bringing buyers and sellers together, Requis helps to breaks silos between industries and enables people to work collaboratively instead of side by side. The platform empowers buyers with superior datasets and transparent pricing and allows sellers to sell excess materials with minimal risk, as opposed to scrapping or storing them.

Through enhanced visibility, increased recovery and intelligent re-use of materials, supply chain professionals can now achieve higher cash flow and make smarter decisions with Requis. It’s time to change the enterprise supply chain’s perception from operators and a cost center to innovators and a profit center.

So, go ahead and pull the largest lever in your business to pull – join us in revolutionizing the enterprise supply chain.    



The most profitable business department you’re overlooking (procurement/supply chain)

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About the Author

Richard Donaldson

An amalgam of business, technology, innovation and leadership. Constantly seeking innovative ways to advance technology in our lives with the guiding principle laid down by Arthur C Clarke's quote "Any technology that does not appear magical is insufficiently advanced."