Contents

What is Supply Chain Collaboration ? ........................................................................................................... 1

User Experience can change the game!! ...................................................................................................... 1
Difference between VMI and SMI................................................................................................................. 2
Difference between APO and SNC ................................................................................................................ 2
Voice of Supplier ........................................................................................................................................... 3

What is Supply Chain Collaboration ?

Today’s business is more complex and wide spread as compared to previous decades. The
manufacturers are more dependent upon their customers and hence need to align w.r.t the changes to
customer demand. Same equation persists across the supply network. If the final demand of the end
user changes then this change affects backward till the raw material suppliers.

Just imagine if it’s possible for the entire supply network to work as a team and respond to the
dynamicity of the end-user demand, then it’s a big advantage for the entire supply network as well as
the end-user.

This is where ‘Supply Chain Collaboration’ or ‘Supply Network Collaboration’ comes into picture. So I
would define ‘Supply Chain Collaboration’ as- Collaboration, at both planning & execution level, between
2 or more entities of the supply network in order to bring more values to all the business partners
involved.

As I mentioned collaboration can be done at various phases of the value network. The methods and
objectives also vary a lot depending upon the industry and business model. Many tools are available in
today’s market to cater this requirement. Some instances are SAP, JDA, Infor etc.

User Experience can change the game!!

Lot’s of innovative projects get failed due to bad user experience. Be it big projects like ERP within an
enterprise or a small website of a small shop. It’s the people who are going to use/view. If the end
product, though having lot’s of capability, is not easy to use then sure the product is going to see the
phase-out phase sooner.
New functionalities may increase the capability of the tool/portal but equally important is the user
adoption. I’ll share one of my experience, out of many such instances.

There is a new news aggregator tool in market known as Feedpost. When I came across this, I was
excited as it’s giving me options to quickly go through many magazines, current news in different topics,
including business and economics. But when I signed up it sent invitation emails to all my mail contacts,
automatically without asking me anything!! I was taken aback when some of my contacts complained
about it. Even it sent reminders to my contacts too!! It was such a bad experience I couldn’t dare to use
this tool. Recently I have sent one email to the founder of the tool explaining the issue. I hope they’ll fix
this issue soon and no other new user get’s impacted in future!

There is another classic example – evolution of Windows and Macintosh compared to not so easy to use
Unix/Linux.

Difference between VMI and SMI

You might have heard about VMI-Vendor managed planning. This is a scenario a supplier(S) plans and
replenishes it's customer's(C) inventory. Customer(C) only shares it's inventory and requirement
information. <b>Supplier(S) uses it's own system to plan.</b>

SMI- Supplier managed Inventory- It's similar to VMI but with only difference is that the system used is
<bo>customer's (C) </b> instead of supplier using it's own system.

Again as I mentioned earlier, the process is very similar. But the impact and user adoption varies a lot
due to various parameters.

Difference between APO and SNC

Generally both are part of SAP's SCM box but can be implemented independently.

APO is used for advanced planning of demand(generally finished goods, though other material planning
is quite possible), supply (various manufacturing plants to various DCs, Inter DCs, Various DCs to
customer location, plants to customer locations etc), detailed production planning and scheduling, ATP
checking at whole enterprise level , Truck load planning etc. APO is generally used for big enterprises
having multiple plants, multiple DCs, a number of suppliers and customers etc.

You can view APO as a planning tool(demand forecast to production and some level of distribution)
whereas SNC is a both planning(small extent) & execution tool mainly used for collaboration
perspective (with external business partners such as Suppliers <-> Plants <-> customers and Plants<-
>external manufacturers).

Both tools have different objectives, they work very differently and both are required for enterprises to
increase their KPIs in supply chain.

Voice of Supplier
‘Voice of Customer’ is a very important aspect to increase customer satisfaction index. Similarly, ‘Voice
of Supplier’ is also an important aspect to optimize various parameters in supply chain. Most of the
organizations are dependent, though the level varies, on their suppliers to produce quality
products/services at lower cost. I would say, in some domains like OEM, Medical device, Retail, the
dependency is on n-tier suppliers too.

I have already mentioned in one of my previous post how supply chain collaboration can help your
organization. The more you collaborate with your suppliers, the better procurement KPIs you have.
Organization can consider supplier’s feedback to improvise product design, process improvement, cost
reduction, quality improvement etc. And all these will lead to better customer satisfaction and revenue.

Suppliers may enlighten a totally different aspect as they are also doing business with other customers.
Your suppliers may possess wealth of knowledge which can be leveraged in an organized manner. It
doesn’t matter how big/small is your supplier, important is what extent do you collaborate with your
supplier to capture their input.

There are various ways to capture the ‘voice of supplier’ for your organization e.g Events, Awards,
surveys online/offline, feedback during shipment etc. The feedback should be captured regularly,
quarterly/annually so that proper business benefits can be derived from these inputs.

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Which is better innovation? 1. Simple solution 2. complicated engineered solution?

Please explain your thoughts.