In today’s extreme economic conditions, innovation for survival is the key. As the procurement of merchandise represents the single largest expense for any retailer, any reductions in the procurement costs lead to a direct increase in profits with an immediate ROI.

In these difficult economic times, the retail and manufacturing industry are seeking means to streamline the procurement process, reduce costs, manage the spend more effectively and ultimately have a more enhanced collaborative platform for all in the supply chain.

Retailers have started to look beyond their inward looking Enterprise Resource Planning applications and are adopting collaborative supply-side platforms, including online collaborative platforms, which help their buyer team to be seamlessly connected with the suppliers to save time and money.

Online system generated documentation provides a much better decision-making support and allows retailers to increase efficiency and reduce their cost structure. Contrary to the currently prevailing modes of communication between the supply chain partners, which is normally through e-mail, fax or EDI, the retailer’s private exchange supports flow of online documentation as per standardized formats.

As per figure 1, the exchange of documents between the various members of the supply chain is controlled by authorizations, workflows and alerts over an extremely secure private network.

Figure 1: An online supplier exchange