6 Reasons to Integrate Trading Partners Across an End-to-End Digital Supply Chain Network

Henry Ames, the General Manager of Logistics Orchestration at TraceLink, outlines six reasons companies should integrate trading partners across their end-to-end digital supply chain networks. This article originally appeared in Insight Jam, an enterprise IT community that enables human conversation on AI.

Supply chain disruptions are inevitable. In fact, according to BCI’s Supply Chain Resiliency Report, nearly 80 percent of organizations experienced supply chain disruptions in the past year, with most encountering between one and ten such events. The leading causes of these disruptions varied from third-party failures to cyber-attacks to adverse weather or natural disasters. Still, the consequences included loss of productivity (affecting almost 80 percent of organizations), service disruption (75.4 percent), and customer complaints (70.1 percent).

These disruptions–and the impact and risk to business–are driving factors for the digitalization and integration of trading partners across end-to-end (E2E) digital supply chain networks, often referred to as multi-enterprise networks and platforms. But what challenges do organizations face when trying to digitize their supply chain? And why should they integrate all trading partners across this type of network?

The Current State of Supply Chains and Their Challenges

Supply chains are more complex than ever, with suppliers, manufacturers, distributors, logistics providers, retailers, and more spread across the globe. As a result, it’s never been more important for partners to be seamlessly connected to drive interoperability, visibility, collaboration, agility, and compliance.

However, traditionally, organizations have relied on a combination of manual processes, legacy systems, and siloed data management for supply chain operations. As a result, organizations face inefficiencies, lack of visibility, limited agility, high risk of disruption, inconsistent data, compliance violations, and much more–which was on full display across the healthcare and pharma supply chain during the COVID-19 pandemic.

To address these challenges, companies embracing E2E digital supply chain networks will allow for seamless, cost-effective, and timely data exchange and partner collaboration. Using these networks–and the platforms that power them–breaks down silos and enables better orchestration of processes and decision-making in real-time. It also increases resilience by exposing vulnerabilities such as delays and inefficiencies, allowing supply chain partners to react quickly or anticipate changing market conditions and disruptions.

The Reasons to Integrate Partners on a Single End-to-End Digital Supply Chain Network

1) Increased outsourcing has led to massive complexity, resulting in a need for better supply chain visibility and collaboration.

Organizations are increasingly outsourcing manufacturing, logistics, and other functions, supporting a more dedicated focus on specialized core capabilities while also providing the opportunity to reduce costs. However, outsourcing these processes makes collaborating in real-time with acceptable levels of upstream and downstream visibility challenging.

As a result, companies are taking steps to reduce supply chain risk through supply chain digitalization, which includes joining an E2E digital supply chain network. IDC’s 2024 Worldwide Supply Chain Survey found that in the life sciences industry, 34 percent seek to improve supply chain visibility, 32 percent seek to improve supply chain agility, and 33 percent focus on end-to-end supply chain orchestration to improve visibility and reduce risk.

2) Electronic Data Interchange (EDI) and other Point-to-Point (P2P) connections are costly, difficult to manage, and lack scale.

Organizations want to integrate and collaborate with ALL trading partners in real-time to improve agility and mitigate disruptions. However, traditional methods, such as EDI and other P2P integrations, have been expensive and often don’t meet agility goals. As a result, most companies have only been able to integrate with a handful of their “top” partners, leaving a significant portion of an organization’s supply chain operating in a less efficient and highly manual process.

Conversely, E2E digital supply chain networks provide a fast and straightforward way to integrate with ALL suppliers and customers at a fraction of the cost of EDI or other point-to-point connections (and some let suppliers and customers use any transaction format or back-end systems and onboard additional partners at no cost).

3) These networks are proven to work, are readily available as a SaaS solution, and deliver business benefits today.

According to IDC’s aforementioned survey, of those using an E2E digital supply chain network, 49 percent of respondents cited enhanced visibility into supply, 39 percent cited better supplier collaboration, 35 percent cited greater supply chain agility, and 31 percent cited improved regulatory compliance. The outcomes are broad, from reducing out-of-stock, optimizing inventory levels, and lowering operational costs to improving service levels and enabling faster product launches, supporting a new market entry, and creating new commerce channels.

4) CMOs, suppliers, and other partners will benefit greatly from being on one collective network.

E2E digital supply chain networks can ensure more precise production planning and better capacity utilization through real-time exchange of forecasts and POs. A supply chain network can also improve responsiveness to customer requests for PO changes, ensuring better on-time, in-full (OTIF) deliveries with higher operational efficiency. Furthermore, real-time information exchange can improve relationships with customers and suppliers (especially if there are no onboarding or integration costs). An additional meaningful benefit includes reducing IT costs related to maintaining outdated modes of information exchange. This ongoing benefit should not be overlooked.

5) From order-to-cash to OTIF, it improves important key performance indicators.

These networks allow organizations to digitalize all supply chain processes to improve KPIs such as revenue, costs, OTIF delivery performance, order cycle times, and much more. For example, contract manufacturers can collaborate on forecasts and purchase orders to improve OTIF. Distributors and wholesalers can digitalize order-to-cash to shorten cycle time. Direct suppliers can achieve more predictable procurement lead times to reduce safety stock inventory levels.

6) It allows for the next step in supply chain innovation – orchestration intelligence

By using advanced technologies, such as AI, machine learning, and real-time data analytics, organizations can automate workflows such as order processing, inventory management, and logistics planning, reducing manual intervention and improving accuracy. They can enhance real-time proactive decision-making and respond to disruptions quickly, such as rerouting shipments or adjusting product schedules. It improves end-to-end visibility so all stakeholders see the current order status, inventory levels, and potential bottlenecks. It can analyze historical and real-time data to predict potential (unforeseen) issues, such as demand fluctuations or supplier delays.

Supply chain disruptions significantly impact organizational cost, customer satisfaction, compliance, and more. The American Journal of Transportation noted in the first half of 2024 that these disruptions increased 30 percent over the first half of 2023, and most research groups predict a continued increase due to issues around labor, geopolitics, cyber-attacks, climate change, and more. Organizations need better solutions to help overcome these challenges and manage the risks and inefficiencies in today’s complex supply chains. End-to-end digital supply chain networks offer that lifeline and are essential to optimizing supply chain operations in today’s complex world.