Navigating Complexity: How CloudPaths Strengthens Supplier Collaboration

Modern global supply chains are intricate webs, far removed from the simpler models of the past. Competition is fierce, product lifecycles are short, and customer expectations are sky-high. In this environment, robust supplier collaboration is necessary for organizations to survive and grow.

The Indispensable Need for Collaboration

According to Anju Achuthan, Senior Manager, Digital Supply Chain at CloudPaths, the shift towards outsourcing and complex multi-tier networks has made deep supplier relationships essential. Thus, the drive for innovation and differentiation often requires companies to outsource, leading to complex networks extending to tier-2 and tier-3 suppliers and beyond. “The network becomes so complex that by the end of the day, the manufacturer might lose visibility within the network,” Achuthan notes. For this reason, collaboration is no longer limited to a single level but must extend across the entire network, especially as sourcing becomes increasingly global.

Overcoming Collaboration Hurdles

Still, organizations face significant hurdles in establishing strong supplier collaboration. Achuthan points out a fundamental issue: “First and foremost, clients hardly look beyond one point and often fail to treat suppliers as true partners. As a result, the suppliers are relegated to only receiving purchase orders without visibility into the client’s planning, and this can become a major hurdle in the long term.”

Achuthan emphasizes that it’s a relationship that requires effort: “It is essential to cultivate your relationships with suppliers, ensuring they recognize that the proposed solution will enhance the performance of all stakeholders and highlight the benefits for them as suppliers.”

Another major challenge is the effective use of technology. Even when solutions exist, organizations often fail to suitably onboard and train suppliers and explain the ‘why’ behind adopting new tools. This can lead to resistance from suppliers who manage multiple clients and systems.

Enabling Deeper Collaboration

Achuthan highlights how CloudPaths leverages SAP Ariba Supply Chain Collaboration in their Supply Chain practice to address these challenges for SAP users directly. She notes that this module goes far beyond simple purchase order exchange. “You can use the solution for multi-tier or subcontracting collaboration,” she states.

Key features within SAP Ariba Supply Chain Collaboration that CloudPaths implements include:

• Forecast Collaboration: Sharing future demand plans with contract manufacturers and raw material demand plans with Tier-2 and Tier-3 suppliers.
• Capacity Collaboration: Requesting and receiving supplier capacity commitments.
• External Manufacturing Visibility & Inventory: Gaining insights into supplier inventory levels, goods in transit, and even orders placed by tier-one suppliers with their own sub-suppliers.
• Multi-tier or Subcontracting PO Collaboration: Improves the effectiveness of communicating real-time order status information between contract manufacturers and component suppliers.

Achuthan explains how this visibility is transformative: “Using the information provided through this solution streamlines the planning process for both the buyer and the supplier as it allows companies to adjust their plans based on supplier capabilities, optimizing inventory costs and overall supply chain flow.”

Integrating with the SAP Landscape

CloudPaths also helps supply chain professionals overcome challenges within their existing SAP landscape. “Many companies still rely on manual processes like managing supplier data in Excel, which is a significant hurdle to digital collaboration,” Achuthan explains. “Furthermore, integrating with diverse supplier systems and platforms requires technical expertise to ensure accurate data exchange.”

CloudPaths facilitates seamless integration, particularly with SAP S/4HANA, typically using the SAP Integration Suite, managed gateway for spend management, and SAP Business Network (CIG). They also possess the expertise to integrate SAP Ariba Supply Chain Collaboration (planning) with planning tools like SAP Integrated Business Planning (IBP), enabling a connected planning and execution process even if S/4HANA isn’t the primary ERP.

Building a Collaborative Future

Achuthan foresees companies increasingly diversifying their supplier base for resilience and keeping multiple supplier options for each product. “CloudPaths is innovating by helping clients leverage the data gathered through collaboration platforms to create performance monitoring and evaluation tools,” she notes. “By tracking metrics like On-Time Delivery (OTD), companies can assess supplier credibility and make better sourcing decisions.”

She concludes with foundational advice for businesses seeking to improve supplier relationships: “Suppliers are your business partners. Start involving them from the beginning. Be transparent and give them the visibility to build trust that will benefit everyone long-term.”

What This Means for SAPinsiders

Supplier collaboration shouldn’t stop at sending Purchase Orders. CloudPaths leverages SAP Ariba Supply Chain Collaboration to enable deeper interactions, including multi-tier visibility, collaborative forecasting, capacity planning, and supplier inventory and external manufacturing insight. This extends visibility and planning capabilities beyond a core SAP system’s native functions.

CloudPaths assists SAP users in overcoming common challenges. CloudPaths partners with organizations on their digital transformation journey by guiding them through each step, segmenting suppliers, prioritizing tasks, and sharing best practices learned from across industries. Their technical expertise ensures smooth integration, enabling clients to build the transparent, collaborative relationships needed to navigate the complexities of the modern supply chain.

Build partnerships and use data for performance. Implementing solutions like SAP Ariba Supply Chain Collaboration allows SAP users to capture crucial data, which can be used to build monitoring tools. This enables a data-driven approach to evaluating supplier performance, building trust, and fostering more resilient supply chain relationships.