B2B Challenges Across the Manufacturing Industry
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This presentation provides an overview of the B2B challenges facing companies operating across the manufacturing industry. Updated April 2013
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B2B Challenges Across the Manufacturing Industry
- 1. Mark Morley, Industry Marketing Director B2B Challenges Across the Manufacturing Industry
- 2. Slide 2 | © 2013 GXS, Inc. The Manufacturing Industry has some Interesting B2B Challenges Consolidation or Modernisation of B2B Extensive M&A activity leading to a need for B2B network consolidation to reduce costs and improve efficiencies Provide Global Interoperability Increasing requirement to provide connectivity to global manufacturing hubs located in established and emerging markets Improve Integration to ERP Systems Consolidation of ERP instances and upgrade to new modules is driving new ERP/B2B integration projects
- 3. Slide 3 | © 2013 GXS, Inc. The Manufacturing Industry has some Interesting B2B Challenges Improve Visibility of Global Shipments Improve visibility of shipped goods, for example aftermarket service parts, to improve customer satisfaction levels Increase Supply Chain Resilience Recent natural disasters have led to companies needing to improve supply chain disaster response procedures Support Expansion into Emerging Markets Introduction of new global manufacturing hubs is leading to a need to improve on-boarding and ensure 100% supplier automation
- 4. Slide 4 | © 2013 GXS, Inc. Consolidation or Modernisation of B2B • Continued merger & acquisition activity requires consolidation of different B2B infrastructures • Simplifying B2B infrastructures provides significant cost reductions • Increasing requirement by management to have a single view of enterprise transactions • Cloud Computing is providing a key driver for consolidation of B2B platforms
- 5. Slide 5 | © 2013 GXS, Inc. Provide Global Interoperability • Connect with trading partners anywhere in the world • Support ALL document formats and communications protocols, both legacy and internet based • Exchange very large files, for example CADCAM engineering data • Introduction of electric vehicles and the ‘connected car’ is introducing further supply chain complexity
- 6. Slide 6 | © 2013 GXS, Inc. Improve Integration to ERP Systems • Significant amounts of information entering an ERP system is sourced from outside the enterprise • High availability of B2B systems is critical to the smooth operation of ERP environments • Poor quality external data needs to be reworked before entering an ERP system • B2B systems are vulnerable when resources are diverted towards ERP projects
- 7. Slide 7 | © 2013 GXS, Inc. Support Expansion into Emerging Markets • Manufacturing companies need the ability to on-board suppliers in any country around the world as quickly as possible • Need to provide support for new generation of emerging markets, eg Vietnam, Thailand and Middle East • Connecting to a diverse range of trading partners with differing levels of technical capability can be a time consuming process
- 8. Slide 8 | © 2013 GXS, Inc. Improve Visibility of Global Shipments • Globalisation of manufacturing plants demands improved end to end visibility • Performance of logistics carriers needs to be continually assessed • Excessive paperwork at country borders and customs agencies leads to delays in parts shipments • Customers require improved visibility of part arrival times and inventory levels in remote locations
- 9. Slide 9 | © 2013 GXS, Inc. Increasing Supply Chain Resilience • Global supply chains have been impacted by numerous natural disasters in recent years • Operational improvements have been introduced to ensure continuity of production and business processes • Improved communication and information management are seen as key ways to build resilience against future supply chain disruptions
- 10. Slide 10 | © 2013 GXS, Inc. Conclusions • Manufacturing companies are continuing to look for ways to reduce costs and improve operational efficiencies, increased adoption of B2B helps to: – Consolidate multiple or legacy B2B infrastructures onto one common platform – Provide global connectivity across the extended enterprise – Improve flow of information into and out of ERP systems – On-board suppliers in remote regions and ensure they can participate in all supply chain activities – Keep track of shipments across global supply chains – Minimise supply chain disruptions through improved supply chain resilience
- 11. Slide 11 | © 2013 GXS, Inc. Thank You Phones US: 1-800-334-2255, option 3 EMEA: +44 (0) 1932 776047 GXS web sites US: www.gxs.com EMEA: www.gxs.eu
Notas del editor
- Today’s manufacturing industry has some interesting B2B related challenges Continued merger and acquisition activity across the industry is leading to manufacturing companies needing to consolidate multiple or legacy B2B networks across their business on to one common platform. As manufacturers build new plants around the world, there is a continued need to provide connectivity to global manufacturing hubs and trading partners around the world.- ERP systems are at the center of nearly every manufacturing operation and a company can realise significant benefits if they integrate their ERP and B2B systems together.
- As manufacturers look to expand into low cost emerging markets they need to onboard suppliers in these regions as quickly and smoothly as possible. Due to limited IT skills in these regions, suppliers must be on-boarded with simple to use and quick to deploy B2B toolsGlobalisation of manufacturing supply chains has meant that it has become more important than ever before to improve visibility into the shipment of their goods, in both the distribution of new goods and shipment of service parts across the aftermarket sector. Finally, recent natural disasters have led to a need to improve the way in which companies respond to supply chain disruptions in order to help increase supply chain resilienceSo let me now briefly discuss each of these in turn.
- The recent economic downturn around the world has led to a lot of merger and acquisition activity across the global manufacturing industry. Larger manufacturing companies are taking advantage of distressed markets around the world by buying up or merging with competitors. Once businesses have been acquired, B2B networks will need to be consolidated or modernized, that is of course if the acquired company has a B2B platform in the first place. With manufacturing plants potentially operating 24/7 in different locations around the world it is important for the company to have access to a single B2B network that can provide a real time view of transactions flowing across the extended enterprise. Extensive M&A activity will normally provide a good opportunity for streamlining supply chains and improving operational efficiencies across manufacturing operations. The introduction of Cloud Computing based environments is helping to simplify the consolidation of B2B platforms and mobile devices such as tablets are helping to improve accessibility to these environments whilst on the move.
- The increasing trend to establish manufacturing plants in low cost regions around the world combined with the use of external contract manufacturers means that it is more important than ever to ensure that these remoteoperations have the ability to connect to the central manufacturing hub. Irrespective of where trading partners are based around the world it is important to offer support for the most appropriate communication and document standard to enable the trading partner to be able to communicate with the manufacturer.The decentralisation of design centres means that it is important to be able to exchange large engineering type files between different sites or trading partners. The introduction of the internet based communication protocol OFTP2 has certainly helped with the secure exchange of engineering or CADCAM files across the automotive industry for example.The growing interest in electric vehicles and the consumer need to connect mobile devices to in car infotainment systems is leading to the convergence of the automotive and high tech supply chains. Hence interoperability between these particular supply chains is becoming more important for many manufacturers and their respective supply chains.
- ERP systems are at the heart of nearly every manufacturing operation, these systems are essential to managing the day to day operations of productions lines around the world. Many global manufacturers have different ERP instances located in different regions around the world and one of the most common ERP projects being undertaken today is to try and consolidate ERP instances onto one single instance. ERP consolidation is one of the main drivers for B2B integration.It was estimated in a recent study that an average 34% of information entering an ERP system comes from outside the enterprise. If a manufacturer does not have seamless and more importantly high availability connectivity to outside trading partners then there is the chance that downstream business systems and processes can be severely impacted.If 34% of data entering an ERP system comes from outside the enterprise then unless this information is checked before entering ERP then it can have serious implications. For example an incorrect address could lead to parts being shipped to a wrong location or an incorrect part number could lead to the wrong parts being shipped. The ability to place a firewall around your ERP applications by providing a means to automatically check all transactions before they enter an ERP environment is crucial to the smooth operation of the ERP system.ERP projects are expensive and hence CIOs typically apply a lot of resources to get these environments up and running on time. But what would happen to a B2B platform if resources were diverted to completing an ERP project? Who would onboard trading partners, who would ensure that new B2B tools were deployed correctly and who would provide support to the B2B platform if it goes offline for some reason.
- Globalisation of manufacturing hubs has led to trading partners needing to be supported anywhere in the world. Whether setting up a new car plant in China or a new TV manufacturing plant in India, trading partners will need to be on-boarded quickly and smoothly if the manufacturing operation is to be successful.Significant wage rises and strikes in China and the increasing value of the Japanese Yen is leading many manufacturers to look for alternative low cost manufacturing centres. A new or second wave of emerging markets is starting to evolve with new plants being built in Vietnam, Indonesia and Thailand. Being able to support trading partners in any region around the world is important Many emerging markets suffer from poor IT and utilities infrastructure and in addition ICT skills in these particular countries is very low as well. Trading partners in these regions need low cost, quick to deploy, simple to use and easy to maintain B2B tools. It is in the interest of the manufacturer to try and encourage their smallest suppliers to use simple B2B tools as it will ensure that the trading partners are able to provide information in the correct format as and when required. Being able to automate B2B processes across an entire supply chain can bring significant business benefits.The introduction of Cloud based B2B infrastructures has certainly helped to speed up the on-boarding of suppliers and deployment of B2B tools in these regions.
- As supply chains become increasingly stretched around the world it becomes even more important to ensure that a manufacturing operation can keep track of shipments from trading partners or contract manufacturers. Providing full end to end visibility of shipments can be difficult especially when goods have to pass through many border controls or have to be transported by different logistics partners. Keeping track of shipments, knowing when they are likely to arrive and having a more accurate view of inventory levels at storage depots can be difficult to achieve without the right B2B infrastructure in place.The performance of logistics partners, especially those transporting goods across land, sea and in the air needs to be monitored to ensure they are meeting their delivery targets. Many shipment delays are caused by having to deal with excessive amounts of paperwork at country borders. Being able to track parts as they pass across country borders helps to improve end to end visibility of global shipments. In addition, improved visibility leads to better decision making, improved predictability of when parts are likely to be delivered and more importantly it helps to increase customer satisfaction levels.
- In recent years many manufacturing companies have been impacted by supply chain disruptions. Whether it is an earthquake in Japan or a flood in Thailand, unless you have a way to minimise supply chain disruptions then your business will be severely impacted.As a result of the recent natural disasters in the Far East, many companies are implementing operational changes such as identifying alternative suppliers, that is dual sourcing, moving production to safer locations, spreading the production risk by manufacturing at other plants and implementing control towers and appointing business continuity managers. Sometimes referred to as the Master of Disaster, the business continuity manager becomes the central go to person during a time of crisis.Many companies can build extra resilience into their supply chains by simply ensuring that they have all the supplier contact information centrally managed and communications can be sent out quickly to an entire trading partner community. Improving collaboration with trading partners, combined with improved levels of information management will help to minimise supply chain risk and build stronger resilience to future supply chain disruptions.
- So to conclude this presentation, Manufacturing companies are continuing to look for ways to cut costs and improve operational efficiencies in order to become more competitive. Increased adoption of B2B helps manufacturersto:Consolidate multiple or legacy B2B infrastructures onto one common platform GXS Managed Services provides the outside resources to help manage the consolidation or upgrade of a B2B environment. B2B outsourcing helps you tofocus on your company’s core competency which is manufacturing goods or products.Provide global connectivity across the extended enterpriseGXS can offer mediation between any communications standard or document format and in addition can help provide inter-connectivity to many private/regional or industry specific networksImprove flow of information into and out of ERP systemsGXS has broad experience of integrating with many ERP environments, from SAP, Oracle or even Microsoft Dynamics. GXS can help ensure that only clean and accurate information enters and ERP platform and production related information gets sent out to the appropriate trading partner, such as a contract manufacturers. GXS Managed Services can provide the people, process and technology to make your ERP/B2B integration project a success.On-board suppliers in remote regions and ensure they can participate in all supply chain activitiesGXS offers a broad range of community management and on-boarding tools. From desktop EDI software, through to web forms and even a solution based on Microsoft Excel.Keep track of shipments across global supply chainsGXS can provide true end to end visibility, with solutions that can track the lifecycle of an order through to a web based application that allows you to monitor shipments across multi-modal logistics providers and customs and border control agencies. In turn, these solutions can be integrated to other back office platforms such as dealer management systems to help let a customer know when their part is likely to come into stock.Minimise supply chain disruptions through improved supply chain resilienceGXS RollStream provides the perfect collaborative platform to manage an extensive trading partner community, through a combination of centralised contact management through to mass communications to trading partner communities , improving the way in which trading partner information is managed will help to minimise future supply chain disruptions.