Illinois-based electronics firm Molex has collaborated with SAP to unite a global community of suppliers and buyers as part of its multi-year, intelligent digital supply chain transformation.

As the conduit that connects the company’s back-end ERP system to external trading partners worldwide, SAP’s business network played an instrumental role in helping Molex digitise transactions and interactions with 900 suppliers worldwide.

As a developer and supplier of connectivity products in automotive, healthcare, consumer electronics, data centres, industrial automation and other applications, Molex buys more than 70,000 parts and components annually. Over time, the company’s legacy supplier portal proved insufficient for ensuring the delivery of timely, accurate information about purchase orders, inventory, quality defects and invoices.

Greater transparency about purchase orders and real-time visibility into inventory levels were essential to mitigating business risks quickly and decisively when confronted with unplanned supply-chain disruptions. With SAP, Molex closed the loop from purchase orders to invoices by removing barriers and complexities that impacted communications with direct material suppliers.

“We’ve moved more than $1bn across SAP’s business network within 18 months of deployment,” said Tony Gainsford, supply chain director at Molex (www.molex.com). “We absolutely did not expect to get to this point so quickly, but a great team and effort brought it all together. Now, suppliers are on time, we are on time, and we deliver to our customers on time, empowering them to run production lines on schedule and meet their commitments.”

With seamless digital connections between buyers and suppliers on SAP’s network, Molex and its suppliers readily confirm part and component quantities and delivery schedules. These real-time insights facilitate accurate clear-to-build directives, which spur operations and customer service to move forward with production timelines.

Now, more than 90% of all purchase orders are confirmed through the network while the average turnaround time to complete confirmations has been slashed by a third. The number and frequency of PO confirmation changes also has been reduced dramatically. Close collaboration with suppliers via the network has facilitated a series of ongoing enhancements, including a recently completed pilot on scheduling agreements.

Molex and SAP are continuing to finetune supplier interactions through elevated user experiences. The organisations co-innovated a purchase order reconfirmation process that synchronises changes, which is vital in a high-tech supply chain.

“Together with Molex, we are co-innovating to solve real supply chain management challenges and propel the industry forward at an even faster pace,” said Val Blatt, chief revenue officer at SAP (www.sap.com). “With SAP, Molex has realised significant improvements in supplier order confirmation rates and advance ship notice adherence. The company is also achieving tangible business value from increased consignment inventory, better resource productivity and improved on-time delivery.”