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CONTRACT MANUFACTURING: THE VALUE OF A NETWORK BASED APPROACH | 2024
The functionality of a supply chain operating network simplifies the mapping and onboarding for one-to-many networks. The value proposition is simple. A Supply Chain Operating Network reduces process latency, eliminates black holes, serves as a system of record, and streamlines/improves specific processes like multi-tier sourcing or transportation. In Figure 3, we share an image depicting a Supply Chain Operating Network. Today, 81% of brand owners and contract manufacturers depend on communication through email and spreadsheets. These flows are one-to-one-- focused on sharing a singular flow of information-- lacking a system of record.
Electronic Data Interchange (EDI) is also used. An EDI signal is like old-fashioned mail. EDI, the industry’s workhorse, is expensive and linear (not bi-directional). Each document requires opening before usage. The research shows that 51% of brand owners augment email and spreadsheet communication with EDI processing. Automation is an opportunity. Only 8% of the flow is through an automated Supply Chain Operating Network. Using a Supply Chain Operating Network to synchronize multiple flows through bi-directional communication is an opportunity for over 90% of the relationships currently existing in the industry.
Figure 2. Types of Business Networks
One-to-One
One-to-Many
Many-to-Many
Figure 3. Definition of a Supply Chain Operating Network for a One to-Many Relationship
PROCESS CANONICAL
TRADING PARTNER
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