The visibility of the entire supply chain is a hot topic in the business world. It’s easy to see why: you can’t measure or improve what you can’t see.
An end-to-end supply chain can provide several advantages, including lower labor and material costs. But what are the other advantages of an end-to-end supply chain? And what are the costs and benefits of supply chain planning?
What is end-to-end supply chain planning?
End-to-end (also known as E2E) supply chain planning refers to managing a supply chain from product design and procurement to delivery and customer service. Depending on the business’s nature, it may include after-sales service and reverse logistics.
It is also a two-way process. As a result, any product returns or defects will be returned to the manufacturing stage. Previously, companies would divide all the steps in a supply chain and handle each segment separately. However, this was not a best practice because, most of the time, there were late shipments or early deliveries, which harmed the system’s integrity.
In most cases, the E2E process in the supply chain planning proceeds as follows:
- Purchase of goods.
- Inventory control.
- Budgeting and allocating funds.
- Logistics and travel arrangements.
- Quality assurance and checks.
- After-sales customer service and sales support.
The main challenge is determining how each process is connected and how each process will respond to a change. This new end-to-end supply chain management system will forever change the supply chain industries. A peer-to-peer network can aid in the maintenance of this type of model.
E2E supply chain visibility becomes a business necessity by communicating internally, figuring out and solving problems, and providing better customer service to ensure the entire business’s smooth operation.
E2E supply chain management can also be introduced into the system through supply chain collaboration. As a result, cooperation within the necessary teams is critical to increasing visibility.
Supply chain planning: End-to-end vs traditional
End-to-end planning is a comprehensive view of a supply chain that incorporates all supply chain functions. It improves customer experience and process efficiency by providing visibility throughout the supply chain.
On the other hand, a traditional supply chain focuses on each function, with each step in the process being siloed and handled independently. As a result, overall performance is inefficient and limited.
Upstream vs downstream supply chain planning
The main issue is that businesses do not focus on both upstream and downstream at the same time. Instead, the vast majority of them flow downstream. That is because downstream visibility is primarily concerned with customers, which should be a top priority. It’s also a very old-fashioned approach to supply chain visibility.
Downstream can be defined as the method or processes that allow a product to reach the customer’s hand. It will cover everything from warehousing to product delivery to the customer. Upstream in the supply chain, on the other hand, refers to the entire process of creating the product. You cannot provide quality products if you only focus on the customer ends and ignore the upstream processes.
Where does the supply chain end?
The E2E supply chain begins with product design and can extend to product return. That, however, is dependent on the nature of the business. To understand where the supply chain ends, it is best to divide it into the main components of Supply Chain Management (SCM).
The following are the main components of end-to-end supply chain planning:
- Demand/supply planning - stocking strategy and sourcing based on forecasted product/service demand.
- Procurement entails both sourcing and purchasing.
- Sourcing entails vendor/supplier selection as well as supplier delivery agreements.
- Purchase orders based on supply planning/order management.
- Production / Manufacturing - the process of creating a product (by hand or industrially).
- Warehousing - the resources and space required for inventory management.
- Retailer or customer-based delivery/distribution/transportation strategy.
- After-sales service - customer maintenance and return management.
- Reverse logistics entails the return, reuse, or repair of a product.
The supply chain for E2E systems begins with the channel and ends with the supplier. In this case, information should flow both ways. What most businesses seem to get wrong is that they begin in the middle, which leads to difficult planning later on.
Each layer of the supply chain must be aware of the connection between suppliers and consumers and plan accordingly. That is known as consumption logic. Consumption and synchronization between layers are required.
Individual and organizational silos characterize traditional supply chains, resulting in constrained supplier relationships and inefficient performance. A comprehensive E2E supply chain systems must integrate all revenue and expense streams. The holistic view of a complete supply chain begins with supplier selection and management, then moves on to scheduling, production, and distribution, and must include after-sales customer service.
An effective E2E supply chain can be designed using an Enterprise Resource Planning (ERP) system that includes top-level business processes such as Concept-to-Launch, Procure-to-Pay, Order-to-Cash functions, and Sustain-and-Retain and Hire-to-Retire human capital asset management processes to improve decision-making, organizational strategic planning and deployment, overall business growth, and workforce planning for providing a holistic view of supply chain operations.
How to optimize the end-to-end supply chain?
Setting the stage for transparency with a proactive approach to data management and digital supply chain management is the best first step toward achieving the kind of supply chain visibility required to create a responsive, resilient, and versatile supply chain (and an agile business to go with it).
LEAFIO, a centralized, cloud-based data management solution software for end-to-end supply chain planning processes automation and optimization, provides a single hub for data collection and analysis while streamlining your current software environment. We propose the Leafio platform to automate the supply chain processes: inventory, merchandising, and promotion management. The business value we create:
- higher sales;
- improved turnover;
- eliminating financial losses;
- efficient execution;
- optimized replenishment;
- trade promotion forecasting;
- merchandising management.
To successfully configure an end-to-end supply chain, these four mapping and analysis tools must be used to understand the various complexities and make decisions based on the circumstances.
- Total Supply Network Analysis: used to collect macro-level data such as cost allocations, lead times, sales volumes, geographical distributions, and more.
- Unit Operation Analytic: analyze the structure of various underlying operating units to identify opportunities and flaws in network design.
- Product Value Structure: consider important metrics such as product architecture, portfolio, costs, innovation opportunities, overhead rates, and others that may impact supply chain operations.
- Supply Network Relationships: map the roles, responsibilities, and relationships of the business’s critical network partners.
What are the advantages of complete supply chain planning?
There are numerous advantages to using end-to-end supply chain planning in your business. Let us look at some of these advantages:
1. Status tracking and updates in real-time
One of the most significant end-to-end supply chain advantages is tracking all of your processes. Using this new supply chain model, you can easily track your products from the procurement of raw materials to the point at which the customer receives the product. Furthermore, you can track when a customer returns or requests a refund.
2. Improved Order Management
It is not possible to manage it without additional issues without proper visibility or distributed ledger technology support. As a result, once you transition to a better model, you will be able to control every aspect of the ordering services, increasing efficiency.
3. Fewer Interruptions
Natural disasters, pandemics, product issues, and transportation failures are just a few of the issues. However, once you start using end-to-end supply chain models, you can easily manage all of these issues and, in many cases, predict them from the start.
4. Improved Customer Retention
In the supply chain, customer retention refers to a company’s actions or activities to keep its existing customers. As a result, reducing customer defection will be the primary goal. As a result, many businesses have developed specific programs to ensure that they retain as many customers as possible.
5. Fewer human errors
One of the end-to-end supply chain benefits is reducing or eliminating human-based errors. Typically, these models include automated systems that replace human-based tasks with software-based tasks.
6. Better Opportunities and Planning
Using the E2E supply chain results in more opportunities and better planning. It’s easier to plan ahead of time and seize opportunities when you have complete visibility within the system. You will be able to predict certain opportunities that your competitor may not be able to predict because you will already be aware of demand changes and consumer behavior.
7. Increases reporting transparency
Reports in the supply chain about each process are critical because they can tell you how your product cycle is performing.
Best Practices for E2E Supply Chain Management
Different sets of best practices for E2E supply chain planning depend on the requirements. However, if you want to implement E2E Supply Chain Management successfully, here are a few general considerations.
- Utilize a lean inventory management strategy. This method eliminates waste and many unnecessary actions and operations, resulting in faster, more accurate task completion.
- Participate in demand planning. That way, you’ll better understand the customer’s needs, allowing you to plan a more efficient supply chain process while keeping the customers in mind.
- Strategically plan the team. Human resource planning is a difficult and frequently ignored aspect of Supply Chain Management. On the other hand, human capital planning cannot be overlooked to create a collaborative environment for the Supply Chain truly.
- Make use of root cause analysis. That will give you a data-driven picture of the entire supply chain, allowing you to see various challenges, weaknesses, and strengths. This data can then be used to create more effective solutions.
- Implement rigorous benchmarking procedures. That will allow you to assess the efficiency of the supply chain at various stages and intervals. That will put you in a much better position to identify and address issues in areas such as inventory management, storage planning, shipping accuracy, quality control, etc. Benchmarking can be done qualitatively as well as quantitatively. The quantitative analysis focuses on analyzing historical data and the insights gained from it and defining various KPIs. In comparison, qualitative research employs best industry practices.