A STRATEGIC IMPERATIVE FOR MANUFACTURERS

Develop an Assurance of Supply StrategyCollaborate with Suppliers to Ensure Reliable, Agile Delivery to Consumers

Volatility in supply chains makes it hard for companies

to profitably meet demand. Sourcing is complex,

involving hundreds of partners around the world.

Suppliers often don’t have access to adequate capital,

causing instability in the supply base. The majority

of inventory, cost, and risk is outside of a single

enterprise’s control — and with a growing percentage

of manufacturing being outsourced, the problem

won’t solve itself.

Inbound Outbound

Tier-n Tier-1

Enterprise

Customers

Multi-Tier Constraints

GlobalSupply

VolatileDemand

OutsourcedManufacturing

The biggest challenge: having exactly the right amount of supply to

meet volatile global demand.

Impact of Uncertainty in Supply Channels

Lack of visibility and control over supply leads to excess

costs and wasteful processes in the manufacturing

supply chain. Companies hold inventory to guard

against risk, but it’s expensive — and the extra costs

eventually get passed on to customers.

Without a strong assurance of supply program,

manufacturers find themselves with:

• Too much buffered inventory

• Inability to predict accurate lead times

• Poor WIP visibility at the supplier level

• Limited control over in-transit inventory

• Longer lead times throughout the supply chain

The Root of the Problem

The systems manufacturers have used for years no

longer solve global supply chain problems. Some

companies are juggling multiple ERP systems — ones

that are prohibitively expensive, don’t share partner

data well, and cannot connect many entities to a single,

real-time source of information.

Too many siloed systems and not enough shared

data make it impossible to reliably meet customer

demands. Companies, with only a few pieces of the

puzzle, must scramble to track inventory and provide

accurate ETAs.

1. Fundamentally different supply chains with little

enterprise control

When supply chains were shorter and constrained

to nearby regions, managing risk and cost was

much easier. Today, up to 80% of data lies outside

the enterprise, leading to:

• More blind spots and lower levels of control

over data and activity in the supply chain

• Global markets and sourcing with long,

variable lead times

• ERP ineffective for managing distributed

manufacturing networks

2. A shift in focus on planning vs. execution

To regain control of their extended supply chains,

companies turn to planning and forecasting. But

with new markets, more frequent product launches,

and shorter product life cycles, incremental gains in

planning accuracy will not meet the drastic demand

swings that are common today. Focusing solely on

forecasting leads to:

• Blind spots where accurate, real-time data is

unavailable

• Near-term horizon problems

• Partner knowledge excluded during

decision-making

• Money wasted on planning systems that cannot

accurately predict demand

3. Financial uncertainty and stress on the

supply chain

Extended payment terms and late remittance put

unnecessary stress on suppliers. Outdated processes

like manual three-way match slow down the payment

process, and relationships with suppliers are put at

risk. The results are:

• Suppliers lack enough capital to fund production

• Quality is negatively affected as suppliers fight to

protect margins

• Supply base is unstable, with poor relationships

and little trust

The Challenge

Manufacturers struggle to ensure a reliable flow of supply through the pro-duction cycle.

To execute on a strong assurance of supply program,

manufacturers must be in control. They need to make

informed decisions using a system that allows for

visibility and management by exception.

As inventory moves through the supply chain, managers

can use a networked platform to adapt to demand or

disruption. They ensure the order will be filled on

time by understanding financial viability of suppliers,

collaborating with n-tiers on parts, and using WIP data.

Later, they use transportation data to ensure on-time

delivery. Bookings, rates, and compliance are handled

from a central location. Finally, goods are managed

by exception to allow dynamic ETAs and accurate

availability projections.

Connect every trading partner on single, cloud-based

supply chain network:

• Shift to execution and tighter integration to provide

“rapid re-planning”

• Procure-to-pay that manages the end-to-end financial

supply chain

• Fusion of the physical and financial supply chains,

monitoring flows from factory to customer

• Visibility into inventory and WIP

How to use this technology to build a strong

assurance of supply program:

1. Collaborate on orders and supplier commitments

2. Manage order, receipt, and WIP status by exception,

automatically

3. Track inventory with visibility into goods from point

of manufacture to customer receipt

4. Replace manual 3-way match with automated supplier

payment programs that show status throughout

Value Propositions

A healthy supply assurance program adds value to all

of a company’s trading partners. The manufacturer

sees a drop in inventory-related costs, while partners

benefit from financial stability and easier communication

on production, cycle times, and shipment of parts and

final products. Execution is synchronized across all

partners, complex workflows managed without extra

manpower, and the physical and financial supply

chains are viewed from a single source.

1. Find and allocate the right supply when it’s needed

• Move inventory easily from one place to another

with higher agility

• Increase customer satisfaction with reliable

deliveries

2. Decrease transportation and inventory costs

through better visibility

• Expediting only parts effected by disruption, not

the whole shipment

• Gain visibility into in-transit inventory and WIP

• Lower costs associated with excess buffer stock

3. Improved supplier performance and relationships

• Better supplier financial health leads to reliable

production

• Reduced DSO for suppliers through supply chain

finance programs

Assurance of Supply and the Networked Company

To uphold a strong assurance of supply program,

companies must transform themselves from silo-based,

inward-facing corporate operators to interconnected,

highly agile business network orchestrators.

NetworkConnectivity

Agility

B

A

Sense more accurately

Operate more e�ciently

Respond faster

Make better decisions

What’s the point of all the planning?

The real power lies in being able to

make changes along the way.

The Solution

GT Nexus provides the cloud-based collaboration platform that leaders in nearly

every sector rely on to automate hundreds of supply chain processes on a global

scale, across entire trade communities.

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