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"Moneyball" B2B Integration

Mon, May 23, 2016 @ 08:30 AM / by Shandra Locken

6837360817_1c6d2129ce_z.jpgPicture appears courtesy of Wolf Gang.  This blog was written by Aurora EDI Alliance member, Karen Blood from GraceBlood LLC.  Few people are familiar with the full title of the 2003 book by Michael Lewis that became Moneyball, the Oscar-nominated film starring Brad Pitt, Robin Wright and Jonah Hill. Moneyball: The Art of Winning an Unfair Game is based on the premise that the collective wisdom of baseball insiders is subjective and often flawed. It is the story of how a small market team uses a more analytical approach to compete with the richer ones serving larger markets. Other themes explored are traditional vs. upstart practices, the democratization of information, and the “the ruthless drive for efficiency that capitalism demands.”

While being involved in a Supply Chain business can be very satisfying, it’s often unfair:  the average company is often painfully squeezed between meeting the requirements of demanding customers and navigating the changing priorities of top vendors. Let’s equate this average distributor to a small market team like the Oakland A’s and see how Moneyball might be useful for competing well in today’s supply chain environment.

An Analytical Approach – You’ve already made the investment to establish EDI relationships with some of your most demanding trading partners and should be realizing savings of 20-25% by doing so. What would it mean to your bottom line if you doubled or tripled the number of partners with whom you do integrated trading? What if you did this every year, simply by sorting your partners by decreasing transaction volume, and worked down the list? Unlike baseball, the beauty of EDI integration is that it holds the promise of Win/Win for all participants. Also consider employing both offense and defense - if you are only doing customer-facing B2B integration, what about vendor-facing or carrier-facing? Your competitors are expecting to increase the number of connections by 20% over the next three years with a corresponding jump in traffic of 25%!

Traditionalists vs. Upstarts – You’re reading this so likely you already know that not only is the pace of change in the Supply Chain increasing, but the magnitude of change is widening. Tradition is fine for establishing a playing field and building those key business relationships but it is Upstart behavior that disrupts the marketplace and stresses the traditional supply chain. How can we better allocate our resources to scale through such change, and address all our playing fields? Would a bench augmented with cloud capabilities, proven managed service providers, and tools that support rapid-response keep you competitive in the game?

Democratization of Information – Data, more data than ever imaginable is becoming readily accessible, both inside your company and to your trading partners. Your supply chain prowess is being tracked and you are being ranked against your competitors, as well as dunned for poor performance. Regular and close review of the numbers must be ingrained to make the faster, more informed and necessary decisions to be successful in B2B Integration efforts. Smooth execution of day to day transactional activity leads to improved partner collaboration and better recruiting (sales!) to new partners.

Drive for Efficiency – The benefits of B2B integration are numerous and increasing daily. It is your leadership and coaching that sets the tone for taking advantage of such opportunities. The Oakland A’s general manager, Billy Beane, exercised what were then revolutionary tactics to turn around their “unfair” game by ruthlessly searching for inefficiencies to exploit and underpriced value to hire. The A’s made the playoffs in each of 2002 & 2003 AND in 2003 enjoyed their highest attendance since 1992.  What will be the results of your Moneyball game plan?

Click below to read a case study on how Wayfair leveraged the power of Delta/ECS to optimize their EDI operations.

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Topics: EDI integration, integration software, EDI software, data integration, supply chain, EDI ROI, Liaison Delta/ECS

Shandra Locken

Written by Shandra Locken

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