Enhancing Customer Centric Supply Chains – Part 1

Mark Morley, Industry Marketing Director

Slide 2 | © 2013 GXS, Inc.

Introduction

• Today’s customer centric supply chains

are becoming incredibly complex

• Many suppliers do not have the internal

resources to support new customer driven

technologies and business processes

• Many suppliers are having to find new

ways to support their customers in order

to remain competitive in the market

• Suppliers require incredibly flexible B2B

platforms to service these customer

demands

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Third Party Research Institutions Validate the Value of B2B Outsourcing

TCO Study

by Hobson & Company

ERP Study

by AMR Research

• 84% experienced ERP project delay • 34% of data comes from B2B• 2.9% average error rate for B2B

ROI Study by Stanford University

• Average 250% ROI• 62% increase in customer

satisfaction• 75% increase in B2B capabilities

• Average savings of 20%- 40%• Cash flow analysis model• Net present value model

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Enhancing Customer-Centric Supply Chains Study

Led by Professor Martin Christopher

SCM World Speaker Faculty Member

Emeritus Professor of Marketing and Logistics at Cranfield School of Management

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Demographics – Primarily Manufacturing

High Tech & Electronics (19%)

Food & Beverage (11%)

Pharmaceutical & Biotech (8%)

Industrial Parts & Equipment (7%)

Aerospace & Defense (5%)

Automotive Parts & Vehicles (5%)

Medical & Surgical Supplies (4%)

Apparel & Footwear (3%)

Note: The remaining 38% of survey respondents did not specify an industry

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Customer-Centric Supply ChainsLarge Customers Large Customers

Supplier(Manufacturer)

Supplier(Distributor)

Point of SaleInventory Positions

Sales Forecast Cross-DockingFloor-Ready Merchandise

Mixed Pallets

Inventory PositionConsumption

Production ForecastVendor Managed InventoryLate Stage Configuration

Evaluated Receipts SettlementDemandPlanning

DemandPlanning

CustomServices

CustomServices

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The New Competitive Advantage

Product

Price

Promotion

Place

Customer Service

Process

94% of Respondents Agreed that

Increasingly companies will

compete as much through superior

processes and service solutions as

through superior products

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Complexity from Customers

73% Agreed0% Disagreed

Examples of New or Customised Processes• Custom Packaging• VMI• ASN• Drop Ship• Self Billing

In the past three years the number of requests from large customers for new or customised supply chain processes have

Decreased Significantly

Decreased Moderately

Stayed the Same

Increased Moderately

Increased Significantly

0% 20% 40% 60%

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The “Customised” Supply Chain

VMI

JIT

Floor ReadyMerchandise

EvaluatedReceipts

Settlement

Cross-Docking

SupplyChain

Finance

ScheduleAssignment

OpenAccount

Postponement & Late Stage Configuration

AuctionsReverse

Direct Store Delivery

Mixed Pallets

Direct-to-Consumer

e-RFQ

SILS

CorporateSocial

ResponsibilityCallOff

Supplier Managed Inventory

Wire Transfer

90% of Respondents Agreed that

Our Customers

Increasingly Demand

Customised Service

Solutions & Packages

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Order Management Technology

Source: 107 High Tech Respondents – SCM World Study – Enhancing Customer Centric Supply Chains - September 2010

Punchout

XML

Phone

Portal

Fax

EDI

E-Mail

0% 10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Which of the following technologies do you offer customers to place orders? Select all that apply.

No Dominant Approach Exists

Suppliers Must Support Many

Different Models

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Other Standard

GDSN

Portal

EDI

Spreadsheet

0% 10%

20%

30%

40%

50%

60%

70%

80%

Product & Price Sync Technology

No Dominant Approach Exists

Suppliers Must Support Many

Different Models

Source: 54 Food & Beverage Respondents – SCM World Study – Enhancing Customer Centric Supply Chains - September 2010

Which of the following methods do your customers require to share product catalog and pricing information? Select all that apply.

No Dominant Approach Exists

Suppliers Must Support Many

Different Models

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Differentiating with B2B E-Commerce

89% of Respondents Agreed that

Flexibility of our B2B e-

Commerce program enables

us to differentiate from

competitors on service

On-Time Delivery

ASN Timeliness

Correct Carrier

Authorised Substitutions

Barcode Label

ASN Accuracy

Supplier Scorecard

Perfect Orders Overall Score

2010

2009

2008

0 1 2 3 4 5 6 7 8 9 10

Perfect

Imperfect

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In Summary,Complexity will Grow; Service and Flexibility Will Differentiate

• New sources of low cost competition meanthat the pressure on price will continue

• Continued concentration of markets means that bigger, more powerful customers will demand more from their suppliers

• Conventional marketing strategies have lesseffect in a time-sensitive, on-demand world

• Companies will compete as much through superior process and service solutions as through superior products

• As complexity increases, manufacturers must further embrace technology to sustain high customer satisfaction ratings while maintaining appropriate profit margins

• A flexible B2B e-Commerce capability is a critical requirement in devising a strategy for managing complexity

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Further Information

NA – http://www.gxs.com/resources/insights/

EMEA - http://www.gxsinsights.eu/4th_edition/index.htm

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Thank You

Phones

US: 1-800-334-2255, option 3

EMEA: +44 (0) 1932 776047

GXS web sites

US: www.gxs.com

EMEA: www.gxs.eu