eCommerce… the opportunity to promote and sell your products online to customers; enabling them to check their order and shipping status, review their account details, and more. The potential benefits are easy to identify: better customer service, reduced administrative tasks (when properly integrated), quicker to market with new/updated products and, most of all, increased market share through the additional web sales channel, 24*7 availability and cross selling.
But what about the flip side of the order processing chain?
Many companies still have mostly manual procedures for supplier communication and procurement. For instance purchase orders are manually generated and mailed, invoice inquiries are handled by phone, and supplier product catalogues are received and stored in inconsistent formats that don’t allow for any automated procedures.
Consider mirroring the eCommerce web application to focus on suppliers instead of customers. For example, enable product catalogue management directly by the supplier, instead of providing customers with product listings to browse. Create requisitions, instead of pending orders. Generate purchase orders, instead of customer orders. Engaging suppliers via a ‘Supplier Portal’ can cover a multitude of elements and will typically cater for a mix of business transaction, self-administration and content focused interfaces. It may also allow for direct application integration.
A key motivation for automating transactions would be to lessen manual effort and improve accuracy. Within the supply chain these transactions typically consist of:
- Inbound supplier invoice
- Outbound order inquiry
- Purchase forecast
- Purchase orders and changes
- Ship notices
Additional transactions may include product catalogue upload, order cancellations, outbound stock inquiry, etceteras. A supplier portal that is well integrated with the back-end system, will provide both the procurement department and suppliers with consistent and up to date information.
EDI via VAN or other transmission solutions like AS2, offer one alternative to supply chain automation. However, while EDI is a mature solution for many, it may not be feasible for all, due to cost and complexity considerations. For suppliers not using EDI, transacting can be enabled as a self-service browser application, where the supplier logs into the portal and enters or queries these transactions. For purchase orders, suppliers could receive notification of purchase order creation and then purchase order acknowledgment. The same applies for managing changes related to purchase orders. Advanced Shipment Notice (ASNs) can be issued with the required information based on the purchase order, item, quantity details etc.
Business Process Integration (BPI) and workflow automation can be practical additions to the supplier portal. For example, the BPI tool could be configured to integrate order and inventory transactions in real time, and automate the generation of forecast updates and shipping data for electronic delivery to the supplier and other relevant parties. This would enable the automation of forecast and production schedules with real time view.
With these kinds of processes there is often the need to have specific transactions reviewed and approved before being automatically triggered and generated. A workflow component could be integrated to enable approval procedures, where a working list of to-dos becomes an internal interface for the procurement team. Upon approval or escalation, updates can be made immediately available to the suppliers.
All of these transactions could also be set to electronically generate and deliver documents, like purchase orders and invoices, in PDF or other file formats. A document management interface can harness the association of the documents to the transaction record for auditing or historical purposes.
In some situations, a larger conglomerate may mandate that certain protocols and processes be used via specific procurement portals. These portals offer procurement processes via standards such as cXML, where a user is directed to the supplier websites to choose and order products, while still remaining within the context of the buying site. While effective, subscription to this supplier network typically comes at a price that may not be suitable for all.
An extension to the supply chain interface is Global Data Synchronization (GDS). This interaction between interoperable data pools and trading parties to exchange standardized supply chain information crosses numerous industry verticals, and compliance with this is often “part of doing business”. Transactions are done via the data pools and not directly to the suppliers. As GDSN adoption grows, certain supplier interactions may change with the access and improvement of product data synchronization. In addition to the GDSN network, there are also off-shoots of these networks that extend the amount and nature of product information transacted, in many cases after the sale or shipment of the goods. For example in the food service vertical product trace information is required from the producers, processors and distributors of the product.
Another facet to the supplier portal is that of enabling a common means of providing product content. Typically this may include downloadable sales and marketing material, technical guides and specifications, license and warranty checking, or even knowledge base and supplier incident and ticket tracking interfaces. The advantages of web-based or single point delivery are that the content has a single source and can be updated without the need for costly reprinting and distribution. It also can enable archiving and searching over the information.
Of a more dynamic nature, content management type functionality could be pertinent for information sharing, where the various departments set up and configure the relevant information. Examples of this could be messaging and communication forums, shared calendaring, meeting and conference registrations, social media, content creation, blogs, newsletters etc. Some may use this forum interface for bid processing.
A further self-service component is the enabling of suppliers to access various reports such as product sales and orders, or forecasts for data analysis, which might also be made available for download in various file formats. Even more powerful would be offering dynamic browser based dashboard interfaces that can deliver real-time information to Suppliers about Key Performance Indicators and enable trend charting and further planning.
Data & Application Integration Oriented
Some circumstances require that the optimum integration occurs directly to the ERP interface, in order to avoid the numerous interim steps. An illustration of this might be where a portion of manufacturing is done directly by outside processors, who are then responsible for issuing the requisite bill of lading, packing slips and shipping labels on behalf of the manufacturing company. Via a portal interface the outside processors could then be given controlled access to specific and authorized application sections, that are part of the ERP interface, in order to automate the shipping process. This interface could enable access to process loads and print shipping documents that are already integrated and available within the ERP system.
While the return on investment from a simplistic viewpoint can be more easily calculated for an eCommerce web application targeted at customers, a supplier portal offering a hybrid of the various elements described above could yield efficiencies that offset the initial investment:
- Direct integration with existing back-end systems can reduce the manual steps related to phone, fax and email communication.
- 24×7 nature of enables any time access to information, with less dependence on staff availability
- Enhanced functionality and efficiency for the internal users can improve business process management
- Reduction or elimination of data-entry improves accuracy and increases productivity
- Higher quality fulfillment and better accuracy of product forecasting may enable optimization of stock requirements and space efficiency.
Furthermore, a robust and automated supplier interface could provide increased value and flexibility to suppliers, and in so doing, improve supplier adoption and ongoing relations.