As part of Panjiva’s commitment to providing the best intelligence on all-things global trade, we’ve decided to enlist the insight of some of the world’s most forward thinkers on trade data, supplier management, overseas sourcing and related topics to share their insights. We recently had the pleasure of speaking with Nick Parnaby, VP of Supply Chain and B2B Community Management with GXS, a leading integration services provider that helps companies extend their partner networks, automate receiving processes, manage electronic payments and improve supply chain visibility.
Nick had some interesting thoughts on supplier communication, which we’ve shared below.
Q. We hear a lot about challenges US companies face communicating with overseas suppliers. Do you hear the same, and why do you think—especially in today’s digitally-connected world—this is still such a big hurdle?
Yes. It is a topic that cannot be avoided because it really comes down to dealing with the realities of the world. The way people communicate is just not the same everywhere. There are eight or nine common languages spoken, plus countless others that serve as a barrier in more remote areas. Language, though, is just the basic layer.
The process for communicating is also different. Email, fax, phone and Excel are still the preferred technologies of many organizations – spreadsheets are still the most commonly used B2B collaboration and information exchange format, despite decades of advancement of EDI and XML. This leads to latency and process synchronization issues that require time and patience to fix. You have to slowly wean people on to new ways of communicating. Because communications will always revert to the path of least resistance, the easiest way for people to engage – so we have to cater to human nature.
Q. Would you agree that information sharing—or a lack of it—is just as challenging? Does it go hand-in-hand with the communication issue, or is it a separate problem that needs to be addressed in the supply chain?
They do go hand-in-hand and both are a challenge. Consider a recent statistic I heard that said a company’s trading partner master data changes every eight seconds on average. How are these changes communicated, from the supplier to the company, and then internally across the company, to the stakeholders who rely on this information to conduct commerce? Then how are the changes synchronized in internal systems, so we are all looking at the same supplier profile consistently?
People will try to get by with whatever tools they have at their disposal, leaving massive productivity and efficiency gains on the table very frequently, because they don’t have adequate information management tools on hand. Information sharing amongst trading partners still has a long way to go, to be even close to good.
In a recent conversation with a CEO from a big technology company, he complained that he didn’t think he could send a greeting card to all of his suppliers even if he wanted to because they don’t have up-to-date addresses, emails or fax numbers for each of them. If it’s impossible for his team to achieve something that simple, then how can they be expected to orchestrate a product recall, manage spend, enforce product safety, deal with a supply chain emergency, or even just better engage them more profitably day to day? Something needs to change.
Q. Social networking has certainly won over the mainstream public. But is the supply chain industry really ready to embrace it? What’s the role of companies like Panjiva and GXS in making this a reality?
There is no reason to go social in the supply chain just for the sake of it. That said, there are tangible values for social networking and technologies depending on which departments are using it and who they are trying to engage.
Gartner once told us that ‘suppliers aren’t your friends’, and ‘we’re not going to share pictures of our cats with our suppliers’. And they have a point. Commerce isn’t social for the sake of social; it’s about structured collaboration and for many its arm’s length. However, social collaboration tools ARE bleeding into the supply chain.
Buyers are like the mirror image of sales people, and so why don’t we empower them with the same tools we give to sales people, to more effectively manage relationships – after all, procurement in the new economy is ALL about relationships. Buyer support teams don’t need to get social with supplier finance and supply chain operations departments, but couldn’t we make the tools that they use every day to eradicate issues, deal with discrepancies, recover over-payments and manage performance more collaborative – more BUSINESS social?
Q. GXS acquired RollStream in March of 2011. Can you tell us about the deal and how it’s helping to solve communications and supplier management issues?
RollStream was a new technology acquisition we completed in April 2011, after a rewarding two year partnership. This technology is exciting, because it moves GXS beyond systems-to-systems integration, and delivers a new layer of human-to-human integration.
Total supply chain integration is not only about systems any more. To release the next level of gains in our supply chain, we need to align the people, process and information flow that happen around the transactions. That’s what RollStream is all about.
RollStream offers totally net new return on investment options for our customers. By streamlining how we communicate, share information with suppliers, onboard them faster and deal with issues more rapidly, we are seeing huge returns.
Q. What needs to happen for the different players in the supply chain—buyers, suppliers, technology vendors, etc—to come together and make social communication an everyday part of supply chain management?
At an industry level, this is going to require standards and consistent ways to define what a company is, and numbering systems that we already have (e.g. Duns Numbers, GS1 GLNs etc.).
At a company level it is just a simple realization that the key 8 or 9 departments who manage suppliers are looking at fragmented and siloed information about suppliers. Yes, there’s a supplier master file, and master data, but master data just got fatter in the last 25 years and this has gotten out of control. Internal departments need to come together and be on the same page, around a single view (profile) about each and every trading partner, and that view includes every piece of information they may need to know about the company, including risk data, spend data, credentials and quality certifications, relationship history, time sensitive materials etc. This kind of central information profile has the power to become the cornerstone of all supplier communications, and in my opinion that is where we are headed.
Once you have this kind of profile, all the other tools can be built on top of it. Think of it as a digital filing cabinet where information is constantly added and available to anyone with access. I’m excited to be at GXS because we’re helping the supply chain do this and as a result, are taking communication to the next level.