Online B2B marketplaces are transforming supply chain management and procurement strategies, and this transformation will only become more profound as marketplace platforms continue to advance in their capabilities.
The impact is so great that Gartner projected online B2B marketplaces to be one of the top three procurement technology trends in 2018 (along with the use of artificial intelligence and chatbots to assist in procurement decisions). The traditional approach of managing the supply chain with internal software solutions is becoming unsustainable.
Gartner suggests that expensive legacy software systems used for procure-to-pay solutions will be largely replaced by digital marketplaces (e.g., Amazon Business, Alibaba 1688) that provide advantages such as:
- Real-time access to market data
- Processing efficiencies
- Reduction of order cycle times
- Global, 24/7/365 reach
- The capability for online auctions.
For B2B buyers, online marketplaces facilitate improved supply chain management by giving them information faster than possible with traditional procurement solutions, as well as the ability to make and act on decisions immediately. There’s no lag between seeking information and receiving it, and buyers can defragment their supply chain by having a centralised supply source.
For B2B sellers, the advanced capabilities of the best B2B online marketplace platforms allow them to streamline the supply chain process like never before. They can spend less time and money on customer service while increasing the quality of that service. They can update product information instantaneously, and they’re always up-to-date on inventory levels. They can better forecast demand and identify opportunities to reach new customers.
Put simply, online B2B marketplaces place more information in the hands of both buyers and sellers, more quickly and efficiently—while also simplifying the fulfillment process. This allows for better planning and lower costs for both sides in B2B transactions.
From the online marketplace’s perspective, the key to meeting the needs of both buyers and sellers is an effective, secure technology platform (e.g., Perfect Exchange) combined with a strategy appropriate for the nature of the marketplace in question and the ability to make adjustments based on data insights.
At a transactional supply chain level, the technology is paramount—facilitating buying and selling that relies relatively less on relationship-building and technical development.
The best online B2B platforms also support long-term strategic supply chain relationships by enabling the integration of valuable business intelligence that benefits both buyers and sellers (e.g., collaborative inventory management to provide faster response times). But even in tail-end transactions, a B2B online marketplace functioning as it should can help buyers make better value decisions.
Improved procurement processes via online B2B marketplaces can drive cost out of the supply chain for both buyers and sellers. The leading online B2B marketplace technology of today can streamline transactions and fulfillment, increase transparency, and reduce costs now—while setting the stage for the future, when online B2B transactions will be the norm except for all but the most-complex and high-cost transactions.
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