A business is only as strong as the weakest link in its supply chain. In today’s interconnected world, supply chain networks can include many different businesses or organisations, each relying on one another.
This means weak links have a bigger impact than ever before. These interconnections in themselves represent complexity, a web of deals, trades and commitments that keep not only businesses running smoothly, but even entire industries.
It comes as no surprise then that trust is a vital ingredient when it comes to running a business or safeguarding an industry. In fact, a recent survey of CEOs in the pharmaceutical industry found that trust is of growing importance.
The study, conducted by PwC, revealed that 73 percent of pharma CEOs believe it is harder today for businesses to gain and keep trust than in the past.
Trust goes both ways in ensuring the integrity of any supply chain. Suppliers need their customers to trust that they will deliver their goods on time, to an agreed price. Equally, buyers need to treat their suppliers with respect by doing all they can to complete payments in line with agreed terms.
So why is it that trust can be so difficult to maintain? It's not only that cyber criminals and fraudsters are becoming ever more adept at targeting business's vulnerabilities, making us more suspicious, it is also that the growing complexity of the supply chain makes it harder to track transactions and interactions.
Technology is coming to our aid and playing a growing role in helping smooth the relationship between businesses and their suppliers. There are many more solutions available that allow buyers and suppliers to take the extra step and provide clear visibility and rich data – we know this can be achieved by digitising and automating the invoicing process, for example.
This clearer visibility of the supply chain and transactions means buyers and suppliers can interact more confidently, which in turn can have a broader impact on an industry such as pharma when it comes to future-proofing prosperity.
Many suppliers act as industry leaders in terms of research and development. But there is a risk that this innovation isn't being fully utilised. A new study from 3M shows that only 43 percent of suppliers feel fully empowered to collaborate with their partners.
Half of all the suppliers surveyed have held back from making strategic recommendations due to lack of incentive or customer openness. The very reason quoted is that 57 percent of suppliers don’t feel encouraged or empowered to innovate and make suggestions for improvement for the customers they supply.
This lost collaboration is potentially costing industries millions in efficiency and development opportunities, the 3M report concluded. This will no doubt be the same for the pharmaceutical trade as any other.
With 70 percent of the suppliers surveyed saying that most customers do not have a strong system and process in place for buyer and supplier collaboration, again the potential for technology to intervene and improve the situation is laid bare – and technology that enables supply chains to be more cost-efficient, cost-effective and productive is available.
If we combine trust with technology, then, the result can only be stronger relationships within the pharmaceutical supply chain network. The future of the pharmaceutical industry relies on integrity, now more than ever. Longstanding, profitable relationships between buyers and suppliers should be nurtured, celebrated and supported.
Stanley Chia is vice president at Tungsten Network