Global Supply Chain Network - How to Manage it

Global Trade Management (GTM) 

Routine reliance on an extended global supplier network has resulted in a more complex and lengthy procurement process. Emails, phone calls and faxes simply don’t support the collaboration between buyers and suppliers that is required for successful global trade.

How to start E-invoicing and avoid paper invoicing

Receiving Invoices by Email , Fax or Mail and entering them manually into your system is an unproductive use of your Accounts Payable resources.

Automate your Invoicing process. Suppliers should be able to send their invoices in electronic format like EDI messages and it should get automatically processed in your Accounts Payable (AP) system.

Hidden Profit in Raw Material Procuremet

Profit from Raw Material

If your outsourcing part of your manufacturing or procuring semi finished or fully finished material from external vendors, you have hidden profit that can be uncovered and add to your bottom line.


Larger manufacturing  corporations   have a system whereby their contract manufacturers will procure raw material through them and not from the suppliers directly. For example a computer manufacturer may insist that their subcontractors (EMS) procure the hard disks from them instead of procuring directly from Seagate or Hitachi. As they have larger volumes of procurement, they negotiate a better price with the component suppliers and get profit from their raw materials.


While the purchase order is released by the manufacturer, delivery is directly to the sub contractor. This is called Drop Ship in Supply chain terms. Also it is to be ensured that the price at which the material is procured is masked. This is called Price Masking of procurement prices.


There will be two billing involved. One will be from Manufacturer to Subcontractor and one from Component supplier to Manufacturer. The margin between these two prices is for the Manufacturer to keep. This is hidden profit which otherwise will be lost between sub contractor and Supplier.


While it is easy to see the process at the outline, implementing this process will involve change management in the entire supply chain. Sub contractors and Component suppliers need to be co-ordinate and orchestrated well to get the right timing of delivery and prices. Also if the raw material are of exclusive design or exclusive nature, the manufacturer also needs to shoulder the responsibility of perish-ability or technology obsolescence of the material.


Forecasting accuracy plays a major role in this process. Both subcontractor and Manufacturer need to provide each other accurate forecast and current inventory position so that raw material ordering can be done efficiently.
The process of managing the raw material procurement on behalf of the Subcontractor needs a good common platform that will provide visibility to all the parties involved. Manufacturer should be able to see the current inventory position with the sub contractor so that they can plan the procurement of raw materials as needed. 

Also when suppliers ship the material to the subcontractor directly, Manufacturer need to be informed of the shipments so that they can do the necessary accounting transactions in their system. Return of defective material by the subcontractor directly to the Supplier also needs to be managed carefully as this will involve accounting implications.


TpSynergy.com provides a platform that can effectively manage the above Raw material procurement process and provide the visibility needed to all the parties involved.

Role of EDI in Supply Chain

EDI stands for Electronic Data Interchange. It’s a standard that has been evolved to integrate disconnected systems, such as the multitude of systems in the world of business.

In this world, each company uses its own systems to manage its business; the disconnect between these systems requires a common protocol that can help these systems interact well with each other. This standard, developed by a consortium of industries, is known as EDI.

Flows in Supply Chain Management

Flow in Supply chain management

There are various expressions to define supply chain management.  The one I like is, SCM is a total system approach to manage flow of Information, materials and money between Suppliers and Customers ‘ . Let us look at each of these flows in detail and also see how effectively used in Indian companies –

How to Extend your ERP System into a Supply Chain System

ERP – Enterprise Resource Planning had traditionally been considered as the system to be used only behind the four walls of an organization. With the Globalization of manufacturing, Outsourcing and lean manufacturing concepts, ERP can no longer act in isolation.

Control Tower in Supply Chain

Control Tower is the latest buzzword in the Supply Chain World. It’s also called the 360 Degrees view of your supply chain.

So, what exactly is Control Tower? 

When you are at the ground level, your vision is very limited; the big picture of the landscape around you is unknown to you. Now, imagine being able to climb a tall tower; your entire perspective of the things around you gets enhanced tremendously. 

A similar construct exist in the supply chain. Buyers, tied down to their day-to-day work, don’t get the chance to envision and understand the big picture of the problems facing them. 

Likewise, even supply chain executives, despite all their abilities, see only what the buyers see: a very limited and two-dimensional picture of the issues facing them. 

Control Tower is a software platform that aims to combat this limit in the vision of its users. This platform allows the buyers and executives to climb the metaphorical tower, so that they are able to see and fully understand the bigger picture.


A Control Tower platform provides end to end visibility of the entire supply chain. It features detailed information about demands, forecasts, current inventories, shipments in transits, expected delays, shortages, excess inventories, and more. 

Moreover, it provides all of this information in a streamlined manner and in a single place so that the user is able to get a very detailed top-down view of the issue at hand. 

The page also includes a dashboard view, which includes detailed graphical presentations, so that taking a quick view at the current situation is made a breeze.


The Control Tower platform is also easily accessible to the trading partners in the supply chain. The suppliers, logistics providers, transporters, third party warehouses, customers, inventory warehouses, retail agents, and anyone else involved in the supply chain all have real time access to the information.

Due to this, it is very possible for executives to make decisions that will easily improve the efficiency of their companies to a very great extent.
The major requirements of a good Control Tower platform are:

1. Easy to Access
2. Easy to Maintain
3. Available to all the parties in the supply chain
4. Monitors supply chain for exceptions like delays and raises an alarm well in advance
5. Provides Industry standard Key Performance Indicators and Measurements
6. Available on Mobile platforms so that people can access on the go
7. Latest technology based
8. Tightly Integrated to the main ERP / Accounting system

The next question that might be raised would be about how difficult it would be to develop a Control Tower platform for each company.

The easiest answer to this would not re-invent the wheel.The easiest answer would be to use a platform already easily available on the market. 

TpSynergy.com (www.tpsynergy.com) provides one of the easy to use Supply chain control towers. Check out the details at their website

Long Tail of Supply Chain

Many years back, I was working as a Planner for a large Machine Tools Building Organization. These machine tools were custom built long lead time high value CNC machines. Delivery to customer on time is critical as the customer's production commitments to their customers is linked to our delivery on time. 

Moment we get the customer order for the machine, we will start planning the delivery very meticulously. Purchase orders for long lead time imported items like controls and systems will be released in advance close follow up with suppiers will be done periodically. Everything will look good till the delivery due date comes close by ......

What will blow up on our face is the few hundred dollars sheet metal cover panels we would have ordered from a local vendor who is just 10 miles away. Either the delivery will be missed or the quality is not up to standards. That will call for rework and missed delivery. Lesson learnt, the definition of critical item can be misleading. A seemingly low value low important item can prove to be the critical items.

We are all lead to believe that Peroto 80/20 principle applies to all sectors of business. Manage 20% of the vendors who supply 80% value of the material. We tend to neglect the long tail of the supply chain. The small vendors who supply 80% of the bulk of the material. A good supply chain should mange these vendors also very carefully.

Due to the number of suppliers who fall in this long tail, it is difficult to manage them individually. We need to have a system in place to manage and monitor these supplies. Some of the helpful practices are

1.                              Ensure that these suppliers acknowledge and confirm the receipt of your purchase orders. This will ensure that they are committed to the delivery. While email confirmation is good, if you can get them on boarded on to your vendor portal that will be better.

2.                              Pre delivery notifications - This is also called advance shipment notification (ASN). This will ensure that the suppliers are shipping the material in time and they provide needed documentation like quality inspection reports, product images etc.

3.                              Quality Feedback - It is necessary to provide periodical quality feedback to these suppliers and keep them engaged. Any quality feedback provided to these suppliers should be acknowledged by the suppliers and their action plan to improve on the quality should be recorded.

4.                              Performance metrics - There are many metrics on which the supplier should be able to constantly evaluation themselves. For example , on time delivery percentage, percentage of rejection, price trend over volume etc.

This kind of a closed loop system with not only your primary vendors but also the long tail vendors is essential to keep your supply chain engine running smoothly. To manage efficiently the suppliers in long tail of your supply chain, you can use one of the best supplier portal available in the market.