Mercado | Article - Future-proof your Business by Aligning Supply Chain Operations

Future-proof your Business by Aligning Supply Chain Operations

Press Release | Mercado Labs

Future-proof your Business by Aligning Supply Chain Operations

October 25th, 2021
8 minute read
By Kayleigh Hansen, Mercado Marketing Specialist
COVID-19 is magnifying a supply chain system that was already troubled. Tariffs, trade wars, sourcing shifts, and bottlenecks are now overlapping with supply shortages, a rise in customer demand, and global trade barriers to create the perfect storm.
We’ve been watching the global supply chain become increasingly cumbersome, and the pandemic only exacerbated the existing cracks in a fragile foundation. So what’s an organization to do?

There is a path out of these troubled times. The truth is that businesses who enhance their supply chain through robust operational and technological coordination are further down that path. In today’s landscape, we have the ability to streamline processes, tasks, and applications with modern tools and software. We call this the “convergence” of supply chains - and investing in this alignment will allow businesses to build resilience, mitigate the risks in their supply chain, and drive more innovation.

Savvy companies who synergize their procurement and supply chain functions will not only ride out the current pandemic but position themselves for future growth as well.
Why Does Supply Chain Alignment Matter?
Companies who want to level up their supply chain functions will focus on enhancing and streamlining collaboration between procurement and supply chain. Those who do will be able to overcome current supply chain issues as well as become more competitive in their spaces. Combining the efforts of related areas allows organizations to mitigate risks, reduce redundancies, and build more efficient operations in order to grow and scale.

Commonly, supply chain departments and business units tend to be disconnected and operate in silos. This means valuable information and important processes slip through the cracks, and there is very little synergy between groups. When alignment happens, you’ll see departments pull together, work through disruptions collectively, and create a more effective and cohesive supply chain.
Where Forward-Thinking Importers are Focusing
If this type of convergence sounds like something your organization could benefit from, you’re most likely correct. Where should you direct your energy?

  1. Supplier collaboration - Since orders take an average of five months to plan, buy, and move, importers are smart to take a closer look at the first mile of their supply chain operations. It’s essential to collaborate with suppliers earlier. Discussing demand planning, forecasting, capacity planning, orders, and quality management will lead to increased updates and greater real-time visibility. Communicating with suppliers more throughout the entire process, from start to finish, will help you to keep up with ever-changing supply and consumer demands.

  2. Cost management - When gaps are present between procurement and supply chain operations, there is a separation between direct and indirect spend which can cause a variety of problems. Businesses need to re-evaluate how they manage their costs holistically. Stronger alignment between business units drives a more connected view of overall spending. This allows businesses to better understand end-to-end costs and manage their finances more efficiently and with greater impact.

  3. New product development - New product development should be based on driving strategic business value through thoughtful modeling and planning. However, in many cases, procurement ends up being driven by guesswork and seeking the lowest cost opportunities. By integrating supply chain teams with internal business departments, employees are able to contribute to new product development based on better forecasts of expected needs. In turn, the organization will experience reduced costs and fewer errors and delays.
How is Supply Chain Confluence Achieved?
With the availability of technology to help with today’s most pressing business goals, it makes sense that software is a natural place to start. Software platforms can help to establish supply chain convergence by aligning processes across multiple departments. Departments can work independently on the tasks they own, but alongside each other, and with consistent communication along the way. A robust software will provide total visibility across all phases of the supply chain, which leads to reduced disruption and rapid resolution when they do occur. In general, supply chain technology enables a more efficient workflow with greater impacts on overall business outcomes.

"Commonly, supply chain departments and business units tend to be disconnected and operate in silos... When convergence happens, you’ll see departments pull together, work through disruptions collectively, and create a more effective and cohesive supply chain."
Mercado | Team - Kayleigh Hansen
Kayleigh Hansen
Mercado Marketing Specialist

The Bottom Line Benefits of Supply Chain Alignment
Aligning procurement with supply chain sounds like a great concept in theory, - but there are direct benefits that make it much more than a “maybe someday” initiative. Companies who focus on supply chain convergence will experience:

  1. Enhanced resilience. As companies all over the world try to overcome the problems that have become apparent in their supply chains, it’s clear that backup plans are crucial. Weaknesses are typically exposed at the connection points within a supply chain, and because of this, enhanced alignment between internal departments and suppliers can go a long way toward both preventing and managing disruptions. In addition, integration between these groups creates a stronger support network, encouraging coordination across issue resolution in real-time.

  2. Better risk management. Forward-thinking companies seek to understand the impacts of decisions across the entire up- and down-stream network. Convergence across business units is one of the only ways to obtain this visibility and create intentional strategies for effectively planning around future risks in advance.

  3. More rapid innovation. Operating more efficiently with suppliers allows organizations to grow and scale along with consumer demand. Through supply-side convergence, businesses are able to share best practice processes, leverage the benefits of automation, and develop impactful strategies more quickly - all of which leads to accelerated innovation.
About Mercado
Here at Mercado, we have first-hand experience with the issues a disconnected and siloed supply network creates. With internal teams disconnected from each other and vendors, it comes as no surprise that importers across the globe are feeling the strain of the current pandemic aftermath.

Designed by importers for importers, we’ve created an import order management system (iOMS) that connects and automates the global supply chain, connecting the 80% that remains “offline” to make it easier for importers to buy and ship the products they sell.

With enhanced supplier collaboration, real-time production management, and production controls, Mercado’s built-in features enable enterprises to re-prioritize supply chain convergence and harness the benefits of a unified business, including increased resilience, improved risk management, and accelerated innovation.
Create a digital first mile for your business
Discover more about how Mercado’s digital supply network helps businesses to transform their supply chains and improve time to market, increase sales, and reduce expenses. To find out more, get in touch with us directly here.
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