The following article will dive into the importance of using End to End supply chain management system and explore the benefits.
Many enterprise companies struggle with handling supply chain operations as it needs extensive visibility and monitoring. Even for smaller businesses, the supply chain can be a lengthy and complicated process. Therefore, to manage the supply chain properly, it needs to have visibility throughout the whole process. A company can only achieve that through an end supply chain model.
Here, we will understand what End-to-end supply chain management is and why a company should use this model? We will also offer viable solutions like integrating blockchain technology to develop a fully functioning End to End supply chain model.
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What Is End to End Supply Chain Management?
End to End supply chain management is the end-to-end process in a supply chain, starting from product design and procurement to delivery and customer service. It’s also a bi-directional process. So, it means that any return or defects of the product will go back to the manufacturing stage. Previously, companies would divide all the steps within a supply chain and separately handle each segment. However, this was not a best practice as most of the time, there were late shipments or early delivery, which ruined the integrity of the system.
However, now the operations are sophisticated and use advanced technologies to streamline and connect all of the processes. Still, there are various barriers as technologically maintaining all of the processes is still not attainable even at this stage.
The main difficulty comes from determining how each of the processes is connected and how every process will react to a certain change. Obviously, this new End to End supply chain management system will surely revolutionize the supply chain industries for good. A peer to peer network can help in maintain this type of model.
Typically, a supply chain comes with the following processes –
- Product designs
- Procurement of Raw materials
- Inventory management
- Finance
- Operations
- Quality Control
- Logistics
- Sales
- Customer service
If we want to add real-time visibility to the system, we have to get access to all the processes from a single point.
A form of supply chain collaboration can also introduce E2E supply chain management within the system. Therefore, collaboration within the necessary teams is important to increase better visibility.
Upstream Vs. Downstream
The primary issue is that companies don’t focus on upstream and downstream both at the same time. Rather most of them actually go downstream. In reality, as downstream includes customers, this is more important to maintain for the companies. But the fact that a business only focuses downstream is quite limiting and damaging to the whole supply chain processes.
Specifically, you can define downstream as the method or processes it takes for a product to reach the customer’s hand. It will cover everything relating to warehousing to delivery of the product to the customer. On the other hand, upstream in the supply chain refers to the whole process necessary for creating the product. If you only focus on the customer ends, you can’t offer quality products as you ignore the upstream processes.
There to ensure an End to End supply chain management, you need to focus on both upstream and downstream processes. Technologies like blockchain in supply chain can help in maintaining visibility in both upstream and downstream.
Why You Need E2E Supply Chain Management?
There are some specific reasons why you would need E2E supply chain management in the first place. Let’s see what these reasons are –
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Competitive Edge
End to End supply chain example can be a game-changer for any company out there. Once you move into this new business model, you can easily gain an advantage against your competitors. But how? Well, most of the companies are still using the old traditional supply chain model. But that lacks transparency and real-time tracking of all your elements.
However, with the E2E supply chain model, you can easily integrate the transparency of the processes along with getting real-time feedback. Thus, you will get more control and can adapt to any changes in demand trends and even resolve any issue faster than before. So, it definitely a huge plus point for your company.
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Cost Reduction
End to End supply chain management will help you reduce your costs to a drastic level. Once you start to automate the whole process, you can figure out the smaller discrepancies within the system. Therefore, you can redesign the whole supply chain model to omit those issues, which in turn will save your resources.
More so, you can also use this to analyze, respond or even anticipate any unexpected events and prepare for mitigating risks from the very beginning. Therefore, you are eliminating the element of surprise and can take preventive measures in times of market crashes.
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Less Complexity
The traditional supply chain management processes are fairly backdated. Therefore, it creates a lot of frictions and complexities that are hard to manage. Also, managing supply chains related to global markets or using resources from all around the globe is extremely difficult at times. Therefore, using End to End supply chain models, you can manage all your processes at ease. As now you can see and track everything in real-time, you can omit any complexities that come from miscommunication. Without this, you will notice a rise in unexpected issues, and it will lower your production rate and will cost you more.
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Less Risk
Reducing risk is one of the primary concerns of every supply chain company. However, without proper backup, it’s not easy to reduce risk and grow your business simultaneously. Here, End to End supply chain example solutions can help to grow your business by reducing the chances of errors. More so, it will also help you identify any point of failure to take preventive measures to eliminate the problem once and for all.
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Boost Efficiency
Who doesn’t want to boost their efficiency to increase their production rate? However, the traditional supply chain processes are quite limiting, and it does not offer an efficient structure. Therefore, many companies end up with wasted resources, raw materials, money, and time. Even though the company is not facing any losses, reducing the wastage can surely benefit them. Thus, using End to End supply chain, you can look over your whole business processes and help you prioritize certain tasks to get rid of any inefficient processes.
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Enhance Customer Relationships
The E2E supply chain system will also help you to understand your consumer better. In reality, you can solve their problems or replace any defective items faster with E2E. Also, as the new system comes with alert features, it will surely help you respond quickly, which will drastically improve customer relationships.
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Benefits of End to End Supply Chain
There are many benefits of using End to End supply chain in your company. Let’s see what some of these benefits are:
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Real-Time Status Tracking and Updates
One of the top End to End supply chain benefits is the option to track all your processes. Using this new model of the supply chain, you can easily track your products, starting from the procurement of raw materials to the very end, where the customer gets the product. More so, you can also track it when a customer returns or wants a refund. In reality, it’s a great way to increase visibility to the whole system.
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Better Order Management
This is another one of the End to End supply chain benefits. Basically, order management in the supply chain involves various channels such as database, order processing, data collection, credit card verification, refund systems, and even returns of the product. Without proper visibility or distributed ledger technology support, it’s not possible to manage it without any additional issues. Therefore, once you move into a better model, you can control every single element of the ordering services, thereby increasing efficiency.
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Fewer Disruptions
Supply chain disruptions are a huge problem when it comes to businesses. In reality, as all of the processes are interconnected together, a disruption in one single process can affect all other processes negatively. Therefore, it will result in huge losses. Disruptions such as natural disasters, pandemics, product issues, transportation failures are a few of the problems. However, once you start to use End to End supply chain models, you can easily manage all of these issues, and in many cases, you can even predict them from the very start.
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Better Customer Retention
Usually, in the supply chain, customer retention will mean the actions or activities a company takes in order to keep their existing customers. Thus, it will mean that reducing the defection of customers is the primary target. Therefore, many companies have specific programs to ensure they can retain as many consumers as possible.
Usually, these include loyalty initiatives. With End to End supply chain management, they can easily operate these programs without any issues. Many technologies like blockchain can offer E2E services and help analyze consumer demand to keep up with their changing needs. There are other blockchain usage for supply chain as well.
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Less Human Errors
Reducing or completely omitting human-based errors is one of the End to End supply chain benefits. Usually, these types of models have an automated system, which replaces human-based tasks with software-based tasks. More so, other systems like blockchain technology can help to verify every single entry before it gets added to the ledger. Thus, this whole process actually gets rid of the errors that happen due to using human resources for data entry purposes.
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Enhanced Business Functions
There are several functions in the supply chain, it can vary based on company to company, but typically they have product design, operations, marketing, finance, distribution, and customer service. All of these functions rely on each other and depend on certain data from each other.
Without proper management, it will lead to a slower product cycle and increased making costs. However, End to End supply chain management can easily help to enhance these business functions to increase their efficiencies. Particularly, blockchain digital transformation is truly a good solution for this.
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Improved Demand Management for OEMs
OEM or original equipment manufacturer is a company that sells products to other companies who uses that product as a component for their goods. For example, Intel sells its chips to various hardware manufacturers such as Acer, HP, Asus, etc.
Here, HP uses their chip in their laptops and then sells them to the customers. Here, Intel is an OEM. The demand management for OEMs is a bit complicated as they can supply to multiple sources. Using an E2E supply chain management system, OEMs can easily control and improve their demand controls.
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Tangible Proof of Data
Tangible Proof of Data is extremely important for the supply chain. But typically, companies don’t have the option to offer than or the process becomes quite costly. However, using technologies like blockchain, where cryptographic hashing is used to secure the data, the companies can easily offer tangible proof of data. As every data will be encrypted, no one can just change it as they want.
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Better Planning and Opportunities
Increased opportunities and better planning are the results of using the E2E supply chain. This is another one of the End to End supply chain benefits. With full-on visibility within the system, it’s easier to plan ahead of time and grab opportunities. As you will already know about the demand changes and how consumers behave, it’s easier to predict certain opportunities that your competitor might not be able to predict.
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Increases Transparency in Reporting
This type of supply chain model can help in ensuring better transparency in daily reports. Reports in the supply chain about every process is extremely crucial as it can tell you how your product cycle is performing. However, without proper visibility, many can sabotage certain data to falsify the reports. This will decrease the product quality and brand value in the market. So, using E2E, you can easily increase transparency. Offering full transparency is one of the blockchain features; thus, this technology is a viable option.
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Enhanced and Improved Customer Service
Customer service is extremely important in the supply chain. It’s essential to help customers feel safe about the products they are buying. So, using the E2E supply chain model, the companies can offer provenance and give visibility to a product’s development process. Thus, customers can see where the raw materials came from and what the company used to manufacture the product. A good End to End supply chain example would be Walmart that uses blockchain to offer provenance.
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Why Isn’t End to End Supply Chain Visibility Mainstream Yet?
Unfortunately, most businesses, specifically international businesses, don’t prioritize End to End supply chain visibility as their first priority. Therefore, some may focus on upstream or downstream visibility but not both at the same time.
This type of model needs major upgrading within the system. This is something many companies are not willing to put effort into. It can also mean that a company needs to invest in upgrading its supply chain models. Therefore, many companies are not willing to spend extra on remodeling the supply chain. However, in the long run, E2E supply chain management is the best practice that can save them a ton of resources.
Blockchain for End to End Supply Chain Management
Blockchain is one of the viable solutions in helping you integrate the E2E supply chain model. The benefits of blockchain technology are already affecting a lot of industries, including the supply chain. This is the perfect opportunity to implement blockchain and use it to ensure End to End visibility to the whole system. Let’s see how blockchain is suitable for the new supply chain model.
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Tracks Provenance
As we all know End to End supply chain model needs to offer provenance to their customers for a better experience, blockchain can help out in that. In reality, many companies using blockchain technology already use real-time tracking to improve their traceability from the very start all the way to the finish. Blockchain is performing extremely well in these scenarios, and that’s why it’s a viable option.
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Offers Immutability
Blockchain offers immutability. It means that no one can change or alter any of the data once it’s into the system. So, this is the perfect technology suited for developing E2E models as it can offer tangible proof data and get rid of any counterfeit issues or data manipulations. Furthermore, it also establishes brand value as only authentic and quality products will reach consumer’s hands.
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Builds Trust
It’s extremely important for any party involved in the supply chain to have trust. But in a larger supply chain, when there are too many parties involved, it’s hard to build trust in that case. Here, blockchain can offer trust by automating the whole process. Therefore, as everything is automated, there is no scope for any alteration of data; thus, it creates a form of trust by actually getting rid of human manipulations. It’s best to go with permissioned blockchain in this case, as companies often have sensitive information.
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Provides Full Transparency
Blockchain offers transparency to the system, which is crucial for E2E supply chain management. As every single process within the supply chain will communicate with each other, then it’s necessary to have transparency as much as possible. In reality, the blockchain ledger is visible to the blockchain nodes within the network; thus, parties involved in the process can see any updates within the network.
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Reduces Contractual Complexities
In a supply chain, a company has multiple contracts with multiple vendors. So, alerts, payments, access to information, or even ownership management become a huge burden. But once you start to use smart contracts from blockchain, you can automate these tasks without any issues. You can set rules, and when those rules are met, the smart contract will automatically finish the tasks.
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Concluding Thoughts
In the end, End to End or E2E supply chain management is definitely the perfect model to enhance your production and overall efficiency. However, without proper technological backup, it’s quite hard to ensure a proper E2E model. Thus, we believe blockchain technology can be a viable solution to this issue. Many companies are already using blockchain for their supply chain use cases. So, it’s time for you to start looking into this technology as well. If you want to better understand this technology, we recommend starting with our blockchain and SCM course right now!
