7 CONTRACT MANUFACTURING: THE VALUE OF A NETWORK BASED APPROACH | 2024
7
What Is A Network? Why Does It Matter?
The discussion on automating trading partner communication in contract manufacturing starts with the clarity of the definition of a network. In the market, there is confusion. Many solutions, irrespective of differing capabilities, call themselves a network. However, as will become crystal clear by reading this report, not all networks are the same . As shown in Table 1, each form of a network solution is different. In this report, we will share insights on the benefits from automating trading partner interaction through a Supply Chain Operating Network. Implementations start with trading partner mapping and onboarding. The deployments can be from one trading partner to another (one-to-one), one trading partner to many suppliers (one-to-many), or multiple trading partners to many suppliers (many-to-many). In addition, the network can be single-tier or multi-tier. The greater the scope of the network, the larger the benefit.
Today, most network deployments are one-to-one or one- to-many, offering single-tier connectivity to improve supply reliability. The concept of business networks enabling many trading partners to inter-operate with many trading partners in multi-tier relationships is quite new. For clarity, in Figure 2, we represent one-to-one, one-to-many, and many-to-many architectures. In the drawing, imagine that each circle is a trading partner and that the lines represent business flows. This research focuses on the importance of nine flows: quality control data, purchase order insights, shipment information status, raw material availability, perpetual inventory status, manufacturing schedule changes, yields, available capacity, and forecast sharing. The greater the number of nodes and variety of flows, the more important it is to map the data and processes from outside-in (market to enterprise).
Table 1. Definitions
Business Network
One-to-one
Closed network based on onboarding permissions
Onboarding Mapping Data Movement Delivery Analytics Onboarding Mapping EDI encryption Data Movement EDI decoding Delivery Analytics
Value-Added Network (VAN)
One-to-one
Closed network requiring authentication
Marketplace
Many-to-many
Open network for sharing across multiple parties Permission-based sharing of data and processes based on trading partner definitions
Catalogs of goods and services in an open market with a focus of buying and selling goods as a transaction Trading Partner Onboarding Mapping Data transformation based on process conicals using a multi-tier data model Data Movement Delivery Analytics
Supply Chain Operating Network
One-to-many or many-to-many
Enterprise Advanced Planning Solutions
Enterprise optimization
Optimization within the enterprise
Four-wall optimization in demand and supply planning
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