This article is an excerpt from the report:
Business Transformed: B2B Communications Hold the Key for Success in Today’s Economy
A copy of the full report can be downloaded here.
In Part One of this series, we looked at the key role of B2B communications strategy in the success of B2B companies. Here in Part Two, we dive into how B2B automation and infrastructure supports key commercial processes, logistics, and product management.
Commercial Processes: It All Starts with the Order
Today, end markets (retailers, manufacturers, distributors) are demanding visibility into upstream inventory for allocation and available-to-promise. They expect brilliant responses from their suppliers. Suppliers, conversely, want information about end markets so they can understand changing customer demand and innovate new products and services. All these needs are fueled by digitizing the supply chain with real-time and granular information.
The digitized purchase order, for example, holds key data to be shared across multiple upstream constituents — n-tier suppliers, freight forwarders, and carriers — in interconnected processes.
As more processes get transferred to suppliers (e.g., relying on suppliers to drop ship or manage free-trade zones in target markets), traditional EDI alone may not complete the connectivity set.1 Task instructions and queries need to flow system to system and person to person, relying on application interfaces (APIs), emails, faxes, and workflow management tools. Task-level functions such as available-to-promise, engineering change orders, new configuration requests and data updates to existing shared data syncs2 are beyond the purview of EDI.
Across the commercial relationship, the financial interactions are critical elements, often overlooked in a B2B communications strategy. Yet finance is the raison d’être of commerce! Collaboration falters when financial information is not handled with care. Thus, e-invoicing, rating and other financial transactions should be envisaged in the B2B environment.
Customs
Digitalizing import/export processes is not just about customs compliance, but is a key enabler of frictionless global trade. Even the smallest enterprise requires the ability to manage the countless complexities of cross-industry/cross-border supply chains with their attendant financial and trade regulations. With electronic filings, lack of adherence3 to regional and country-specific regulations will preclude doing business in your desired target markets. Yet, trade regulations are constantly changing, making it difficult to keep up. Here again, precision across processes allows not just accurate duty, VAT and other taxes, but cost saving duty drawback.
Though some enterprises rely on freight forwarders to create customs filings, the information contained therein is a rich data source that can be shared between service providers and shippers, supporting many other communications streams.
These global trade communications streams, in a sense, represent the various interactions between container and conveyances, facilities and locations), the commercial activities (contracts, orders, and other transactional information), the entities (customers, shippers, consolidators, carriers), and regulators (licensing agencies, customs, and border security). It is rapidly becoming a requirement for these streams to harmonize at the border to meet multiple party concerns, from product authentication and inventory visibility to anti-terrorism.
Product Management
Product-centric issues, though not transactions per se, are still a critical focus of many B2B interactions: product lifecycle management; product standards, certification, and authentication; catalogue management; and inventory visibility.
Today, product data is also shared with consumers in a variety of media formats — print, web, kiosks, mobile, configuration and design systems,5 and at the point of sale (POS), to name a few, requiring information systems to be able to interpret and present big data formats — graphics, video, temporal data and sensor data.
Catalogue data synchronization6 is becoming more widely adopted, reducing constant data re-entry and errors. For a brand manufacturer leveraging the information, creating a catalogue entry once ensures that your product is properly described, displayed, and priced. The benefits of speed to market and cost reduction from not having to recreate these catalogues at each end point are huge.7
Logistics
Transportation is increasingly at the forefront of corporate strategy as companies grapple with global sourcing and Omnichannel. And, now, with the internet of things, there is an implied immediate service response.8 Customer logistics services to support these changing models are revamping the entire transportation industry, requiring a new approach to B2B communications.
Across global chains, change is happening. Today’s importers want information and control to inventory within the container and the ability to reroute products to different end markets. This means a real change in the business models of ocean carriers and port operators who have not been part of the “visibility” game to date. Talk of smart containers or fast-lane container management will need to be backed up with collaborative information systems from shippers to freight forwarders, carriers, customs, and other logistics service providers, right through to the importer.
Omnichannel is the ultimate, inclusive operation in commerce today, demanding a behind-the-scenes dynamism not experienced before. While a customer is shopping, the merchant is checking inventory across multiple stores, warehouses, suppliers, and, possibly, multiple carriers to offer the customer the best availability and pricing options. That “in stock” and “order by 10 pm and have by 9 am” is a promise even before the customer hits the buy button.9
These searches represent more than random queries: suppliers have to be ready to promise actual inventory. Then, once the purchase is complete, all the parties must execute. A confirmation must be delivered in seconds with all the transactions committed to by partners in the background. Drop ship is also becoming the norm, especially with larger products such as appliances and furniture. To do this takes both a rich API library to connect to the network of trading partners’ real-time availability, terms, and pricing; and EDI transactions for orders and commitments. The old “store-and-forward” approach to EDI just won’t support this responsiveness.
To master a process such as this requires not just purchase/confirmation communication, but must also traverse transportation transactions that are operating almost in unison. This highlights the need to improve transportation efficiencies and information connectivity.
In Part Three, the last installment of this series, we examine various B2B technologies and infrastructure components required to support a successful B2B communications strategy.
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1 More than the EDI procurement transaction set. — Return to article text above
2 This can include details from inventory, configurations, discounts, and so many other tasks between customers and suppliers. — Return to article text above
3 ACE/AES, Intellectual Property and other licenses and regulators: in Japan, AFR; or Europe, EU. — Return to article text above
4 Facility and inventory optimization exercise. — Return to article text above
5 Computer Aided Design (CAD), Product Lifecycle Management (PLM), and Product Information Management (PIM) systems, for example. — Return to article text above
6 “Catalogue Item Synchronization is the process of continuous harmonization of item information between trading partners which ensures that the master data is the same in all trading partners’ systems.” (GS1 definition.) You can read more about these standards here. — Return to article text above
7 Product traceability is another area of benefit for companies, but has already been widely written about elsewhere. — Return to article text above
8 Read Optimizing the Customer Experience with Exceptional Home Delivery. — Return to article text above
9 Home Delivery is not just an issue for retailers. Read Always On and read more at Home Delivery strategies. — Return to article text above
To view other articles from this issue of the brief, click here.