9 Benefits of B2Bi in the Supply Chain

One topic that has created buzz over the last few years has been ‘The Cloud,’ an infrastructure of servers that allows multiple users to access shared files virtually everywhere. With cloud-computing, collaboration has been easier than ever.

The Global Supply Chain Institute at University of Tennessee and Houston-based DiCentral gathered and analyzed important statistics about collaboration within the supply chain. The study focuses on 237 businesses that have adopted cloud-based B2B integration or B2Bi. Their research yielded compelling results.

Key B2Bi Stats

The following statistics emphasize the importance of integration in the supply chain:

• 88% participants’ cost stayed the same or decreased with integration.
• Suppliers saw savings of 25% by processing orders electronically.
• Suppliers also saved 20% by processing invoices electronically.
• Invoices were processed 4.5 days faster.
• 68% of customers found it easier to do business after implementing B2Bi.
• 69% of suppliers were able to respond more quickly to customers’ changing environments.
• 40% found improved efficiency when conducting onboarding training for new partners.

Benefits of B2Bi

Both suppliers and their business customers had something to gain when implementing B2Bi.

Suppliers

1. Compliance: Increasingly, suppliers are required to communicate with their customers electronically. B2Bi helps them meet the needs of many electronic communication programs.
2. Cash Flow: Cash flow saw some improvements.
   • Electronic funds transfer (EFT) pays suppliers faster.
   • Increased visibility as to when invoices are expected to be paid and when they are actually paid.

Cash flow is crucial for all companies, and through increased visibility and quicker processing periods, companies are able to access payments faster and plan ahead. The benefits of B2Bi work as a cycle. Because suppliers receive electronic orders more quickly, they are processed and shipped faster, and this results in further decreases in payment wait periods.

3. Efficiency and Accuracy: B2Bi made doing business easier
   • Less outbound and inbound phone calls checking on the status of an invoice or order.
   • Less human error in order processing and fulfillment.
   • Money saved from not processing paper documents.
4. Speed: Electronic orders speed the fulfillment process. The result is cost reduction, inventory reduction and customer service improvements.

Customers

1. Supplier Management: Business customers are able to report useful data to suppliers through web portals. Suppliers gain access to the following metrics: delivery statistics, damage, and order lead-time.
2. Order Management and Invoicing Efficiency: Placing orders is simpler and more accurate.
   • Standard purchase orders are replaced by blanket purchase orders. This streamlines replenishment and allows the customer to place multiple orders for different dates all at once.
   • Customers are able to view up-to-date catalogs and product information. This prevents them from ordering discontinued products and re-doing the order process.
   • Automatic order confirmations.
   • Improved order tracking.
3. DC Efficiency: The process for receiving products is standardized among partners. This results in less errors and decreased need for labor.
4. Product Availability: Product availability improves because companies are able to see backorders more quickly, and, as a result, are faster to respond to these issues.
5. Speed (customer-side): The entire supply chain is sped up.
   • Customers able to respond to changes more quickly.
   • Stock-out reduced, BUT
   • Inventory reduced at the same time.

Everyone Stands to Gain

All sides of the supply chain are able to reap the benefits of B2B integration. Through collaboration, efficient and cost-saving decisions are made. Information is shared between partners, allowing greater access to key business data. Further, employees are less likely to make important errors and complex tasks become easy. As integration is adopted by an increasing number of companies, supply chains will see significant improvement.

To download the full study on supply chain integration, click� here.