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Supply Chain Management: Problems vs. Solutions


Many reading this might be sipping on a cup of coffee, is that you? Even if it’s not, have you ever wondered what it takes to get the beans from farms in Brazil or Columbia to shipping containers that distribute over the world - then to a shop or cafe to grind and then into your hand (or mouth) to enjoy? It sounds like a simple process, doesn’t it? While many of us take a $4.50 cup of coffee for granted, the hours of work and constant communication that goes into organising manufacturers, suppliers, transport, warehouses, and retailers can be a remarkably difficult and expensive process.


Learn more here.


The supply chain process


Supply chains require a number of different companies, and departments within companies, to communicate and exchange a significant amount of information every day.

Let’s continue with the coffee example. Coffee is one of the world’s most consumed beverages with almost 10 trillion kilograms of coffee consumed in 2021. The image below shows a very simplified version of the supply chain from farm to mouth.



Source: Kickstarter

Not too overwhelming, is it? Now, let’s look at the steps it takes to produce coffee from “shrub to mug”. The importance of the image below is to highlight the 10 manufacturing and export processes of coffee. If each step has its own “simplified version of the supply chain”, all of a sudden the process from shrub to mug becomes a “little” more complex. For example, coffee production begins with the farming & picking - once the beans have been harvested they need to be transported to roasters who then move them to be packaged to get them ready for retail distribution all over the world. But, the company that is packaging them also needs to manage their inventory, distribution and transportation of their own stock of packaging and other equipment. And so, the network grows.

Each of these individual networks need to work autonomously, and as quickly as possible to ensure they all meet the expectations of the “customer” (in this case, the coffee distributor) so that they can run a successful business and keep up with consumer demand. Think of the recent toilet paper shortage during COVID, toilet paper is a manageable loss but could you imagine how many people would be on edge without their daily coffee?



So, what could go wrong?


Quite a bit, actually. In the modern world, the complexity of the supply chain industry is overwhelmed by the different computer systems implemented by different companies - each configured differently. With, or without, a small army to manage the communication and information flowing between systems and companies, today’s industry processes are a complete nightmare. Further, Supply Chain Integrations are intricate and difficult to do, which means there are only a handful of companies that do it. Why?


  • There is no universal system that manages all global supply chains. There have been countless attempts to produce a standardised system but it’s never really worked, and no one is willing to invest the significant time and cost in moving to a different system. Can you imagine the millions of dollars and months of company-wide impacts it would have for Woolworths or Coca Cola, or other large companies to shift their entire operations over to a different system and re-train everyone?

  • Electronic Data Interchange or EDI (the data structure that many supply chain systems use to communicate with other parties) is a very dated system, making it difficult to build these integrations, often requiring specialised teams

  • The detailed and business critical nature of the information that is communicated through these integrations, combined with the difficulty of working with EDI, means that integrating supply chain systems is a painful process that can take weeks or even months to successfully complete

  • Building these integrations often requires input from the customer’s business and a sophisticated understanding of technology or IT systems and may find it intimidating or difficult to grasp, meaning that the integrations are either outsourced (at great expense) or just not done, with many managing the process manually

  • Managing supply chains manually leaves a lot of room for human error in an industry where mistakes are very costly and can damage relationships

  • Staffing costs can be high to maintain the headcount required to manually send and receive emails with screenshots of booking systems or PDF bookings, and emailing inventory checks or pricing/quote requests


Read about supply chain systems here.


Solution


It simply is no longer good enough that in 2023 it is so difficult to connect the IT systems that drive supply chains. Clearly, the answer lies in a modern platform that specialises in integrating supply chain systems. Instead of trying to standardise what everyone is using, we need a modern, flexible tool that can quickly and easily (and affordably!) connect supply chains, giving you the benefits of integration without all the cost and complexity of either integrating in the current state, or running a manual operation.


In a ground-breaking Australian-first, Switchboard is a - you guessed it - cloud-based integration platform that will give companies one integration to connect to their whole supply chain network. Working with companies of all sizes, across a variety of industries including: retail, eCommerce, consumer, healthcare, grocery, food & beverage, hospitality, construction, chemicals, and others. Switchboard operates a “hub-and-spoke model" - meaning, companies integrate with Switchboard, which then manages connections to every system and company the customer requires. This revolutionary concept allows companies to add or remove trading partners with ease and minimal cost, bringing flexibility not seen in the current market.


Switchboard launched in 2022, and has been backed by four investors is a modern, efficient and highly scalable solution that:


  • Minimises the risk of human error

  • Speeds up distribution by minimising the back-and-forth of internal and external communications

  • Has a pricing model that scales with the size and volumes of a business so that it is an affordable and scalable solution for all businesses, and many more features that are putting them on the road to make them the go-to integration provider for supply chains across Australia and around the world

  • Has been built by an experienced player in the industry with direct experience with this problem


Put simply, Switchboard manages your supply chain from start to finish. Seeking more information? Visit www.switchboardcloud.com or contact us to learn more.

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