Digital Transformation: The Importance of DSN

June 1, 2018 Gary Neights

As a chemical company is buying and selling around the globe, it is important to utilize robust technology that automates processes across procurement, order fulfillment, and logistics. This technology should capture data along the way, analyze trends and information across product, demand, and supply networks. A chemical company will thrive through its Digital Transformation journey by using a network that strengthens interactions across companies delivering prosperity and economic growth for all participants. 

Digital Supply Networks (DSN) are a core part of the Digital Transformation journey, providing a technology foundation for improving inter-business processes, expanding supply chain relationships, increasing revenues and reducing operating costs. DSNs create greater opportunities by integrating your suppliers, customers, and logistics service providers in various ways depending on the level of inter-business processes you’re performing.

One method is to connect via ERP-to-ERP integrations with high-volume suppliers and customers to streamline and automate sell-side and buy-side transactions. A second technique is through some type of portal for order capture and invoicing for inter-business automation. Finally, some leading DSNs provide email as a simple onboarding method to digitize an inter-business process without requiring supply chain partners to have any integration software.

Benefits of this approach according to analysts and digital transformation consultants are:

  • EBITA increases by upwards of 5 percent
  • Sales growth of 3 percent
  • Operating expenses decreases of 5 percent

Connection to the Digital Supply Network enables your business to communicate with customers, suppliers, and logistics service providers simply by sending and receiving emails to confirm direct material purchases, invoices, and outbound shipments or by leveraging the more sophisticated methods mentioned above. Once connected, you can begin automating your inter-business processes – with suppliers to procure direct materials more efficiently, with logistics service providers to drive continuous improvement in costs and service levels, and with customers to provide them with visibility to the status of orders and shipments, even across multiple modes.

A Digital Supply Network collects, correlates, and synchronizes the data across multiple trading partners and turns it into valuable information so that you can differentiate what’s important from all the noise. These are applicable to supply chain documents such as:

  • Sales Orders and their confirmations
  • Logistics Booking Requests and their confirmations
  • Shipment Notices and associated updates
  • Estimated Time of Deliveries with actuals
  • Goods Receipts confirmations
  • Invoice payments and freight collections

Divestitures, mergers and acquisitions within the chemical industry is on the rise, fueled by access to financing through private equity as well as activist investors. Companies aim to restructure their portfolios and achieve organizational synergies in order to maintain viability. Companies are also seeking to maximize asset value through Process, People & Technology Optimization. Within this scenario, Digital Supply Networks can be used to architect and execute an organizational strategy towards operational excellence with more reliability, efficiencies and profitability.

The Digital Supply Network technology and improved inter-business processes leverage holistic decision-making capabilities that drive seamless communication and collaboration. They tie an industry together and drive a flow of innovation unparalleled in prior years. As process manufacturers strive towards greater corporate agility and innovation through a Digital Transformation journey, enacting a proven Digital Supply Network will be essential to your companies’ success.

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