Procurement
Evolving to Efficiency and Excellence

While corporations began to recognize the need for automation in their sourcing and procurement functions in recent years, manual and decentralized sourcing processes persist. In fact, according to HBR, a full 70% of companies used manual processes to identify affected suppliers in China after COVID-19 hit. In large, complex corporations and a decentralized procurement organization can lead to consistent overspend by employees, on top of the hours lost to inefficient processes. The advent of distributed workforces at the onset COVID-19 further intensified the need for a centralized and modernized procurement function, as organizations sought to increase efficiencies and reduce costs, especially in a tightening economic environment.

In addition, the disruption in global supply chains highlighted the critical importance of adaptability in supplier networks. Organizations must be able to dynamically manage supplier relationships and onboard new suppliers quickly and remotely without sacrificing transparency and compliance. We believe this level of automation has become critical to control spend, improve collaboration with suppliers and remain competitive.

Planning
Investing in Your Digital Twin

As supply chains have grown more global, complex and interdependent, they have also exposed vulnerabilities to ever-increasing disruptions like natural disasters, tariff and trade volatility, and social and labor strife. The onset of COVID-19 presented the most extreme example of supply chain disruption, upending the movement of goods and services globally and impacting large enterprises and individual consumers alike, across all industries and routines. In response, enterprises are working to reprioritize supply chain decisions – to transition from a focus on efficiency and cost to a broader understanding of their supply chain resiliency and adaptability. In a recent survey of manufacturing executives, 70% agree that sourcing from the lowest-cost supplier will no longer be the sole focus for decision making and supply continuity will be prioritized instead. Both public and private organizations are realizing the need for better planning and modeling tools to respond when disruptions, whether large or small, inevitably occur.

An integral piece of the planning puzzle is the growing importance of creating a “digital twin” – or digital representation – of the supply chain, replicating assets, processes, transactions and third-party relationships. An effective digital twin offers better visibility into the movements of goods under different inputs and scenarios. It is designed to help a company quickly understand how a gap or shift in its supply chain will impact the overall operation and, importantly, how to fix that disruption most efficiently.

We believe the $1.5 billion acquisition of Llamasoft in late 2020 underscored the renewed focus on digital twins in network design as well as advanced planning solutions designed to help organizations more effectively respond to dramatic deviations in demand. In the retail supply chain, solutions like Summit-backed RELEX use robust data processing power and AI to fuel adaptive and autonomous planning, forecasting, replenishment and allocation. This allows retailers to optimize their operations in an increasingly dynamic environment – one in which the potential for change and disruption represent the new normal.

Execution
Optimizing For Efficient Movement of Goods

For years, the “Amazon effect” has put pressure on logistics providers to address ever increasing demands for parcel shipments, faster shipping times, real-time delivery tracking and lower costs. Delivery constraints continue to intensify as shipment volume and the complexity of global supply chains increase. Meanwhile, travel restrictions and stay-at-home orders related to COVID-19 converged to cause both extraordinary supply chain disruption and unprecedented e-commerce demand, with the latter unlikely to decrease even after COVID-19 concerns ease. Today’s supply chains need to be more nimble and transparent – to adjust on the fly and adapt to the complications of parcel drop-shipments and returns.

Visibility is critical to the efficiency of end-to-end supply chains – whether industrial, consumer or otherwise – yet each leg of the journey is managed by different processes and systems. This fragmentation leads to a lack of transparency on the perennial question: “Where is my freight?”. Summit-backed MercuryGate has long been a leader in addressing this challenge, offering a Transportation Management System (TMS) with a differentiated supply chain execution platform designed to help shippers and logistics service providers optimize the movement of goods in the “First Mile.” Today, MercuryGate is helping its customers more effectively respond to the increased pressures facing B2C e-commerce with a “Final Mile” delivery platform that provides end-to-end visibility, from port of origin to the front porch. MercuryGate recently acquired Cheetah Software Systems to further enhance the capability to adapt, automate and communicate movements in real-time.

The demand for dexterity and transparency extends to SMB and mid-market e-commerce businesses as well. As smaller brands work to compete with larger market players, they encounter an increasingly complex logistics landscape. Summit portfolio company ShipMonk works to address this challenge, offering software and solutions to help SMB merchants automate order management, inventory management, warehouse management, ship routing, as well as asset tracking, reverse logistics and discounting shipping rates.

Compliance
Creating Transparency Across Suppliers and Products

We’ve seen a structural shift in the market over the last several years as corporations, consumers and other stakeholders increasingly demand greater transparency into where their goods and services come from. Compliance, sustainability and fair-trade practice extend beyond the enterprise to the entire supply chain – from direct materials sourcing to distant partner networks. COVID-19 intensified the need for transparency as corporations – and consumers – felt the sudden impact of downstream supplier disruptions in the early days of the pandemic. Beyond preventing empty store shelves, stakeholders increased their focus on the safety and integrity of their sourced goods and trading partners.

The first and most straightforward step in achieving compliance and transparency is tracking a company’s “first derivative” suppliers. Beyond this, however, supply chains remain complex, opaque, and large – with many potential areas of risk and interruption the deeper you go. We believe technology solutions offer the answer to understanding the second, third, and fourth derivative suppliers and putting in place the proper vetting tools to gain transparency into vendor compliance. As supply chains become both more complex, the need for digitization is further fueled by increased regulation and by concerns around environmental and social impact of how goods are sourced and manufactured.

Finally, in order to meet consumer demands around product information transparency, corporations must have the tools in place to ensure consistent and accurate information across their channels. Summit-backed Syndigo offers the largest single-source network for managing and syndicating complete and accurate product information, enabling brands, manufacturers, retailers, distributors and aftermarket suppliers to deliver transparency around their products and ensure compliance with industry and government regulations.