What Your Business Can Do About COVID-19 Series: Vertically Integrating Your Supply Chain Data

On Wednesday, March 25th, I sat in on a fantastic pivot by our friends at BVA in response to the cancellation of all spring ecommerce events for 2020: Virtual Commerce. A completely virtual conference where hundreds of attendees that tuned in from their various WFH situations from all over the world absorbed no less than 7 talks. Each talk focused around what ecommerce Merchants can do in light of the COVID-19 reality we all find ourselves in. Some important topics covered during the conference were the rise of ecommerce and brands taking proactive steps into vertically integrating their supply chain amidst COVID-19.

With an incredible content lineup that reassured Merchants of the new reality we exist in now and post-COVID-19, experts overweighed in on how to continue marketing during this time. Other topics discussed were how to virtually collaborate between teams, and how to generally keep business going. Coupled with great data analysis from McKinsey, two things from this conference were clear:

  • The world has already made a pivot to ecommerce. While consumer spending has curtailed, online growth in grocery and entertainment has already happened in the past few weeks. As consumers settle into the new normal, we can reasonably expect ecommerce to continue to rise. Even if that ‘new normal’ continues to be WFH.
  • Brands are taking new steps in vertically integrating their supply chain data to create operational efficiencies. Integrating acquired or external systems into the existing technology stack are necessary to promote data cleanliness and deliver data automatically to all team members. Even if they’re remote.

How You Can Respond to these Changes

COVID-19 is creating many dichotomies as the world tries to figure out how to respond to this crisis. Now’s the time to decide how your business is going to respond: by leaning into the problem to try to create solutions and fail-safes… or by leaning out.

At VL OMNI, we’re encouraging Merchants to focus on — and not to ignore — their ecommerce back-end. This includes your operational strategy, your applications, and how it’s all connected together. This is not the time to abandon projects or goals in the works, but rather pivot them if needed to fit the new market, but ultimately to pursue back-end efficiency projects. With the uptick in the ecommerce economy and ecommerce being a foreseeable trend for the future, cannibalizing investment into core back-end processes that are either going to enable you to capitalize on, or be crushed under, is part of the demand to meet customer needs.

Two Cases for Vertically Integrating your Supply Chain

Vertical integration is “the process a company undergoes when acquiring business operations of another company within the same production vertical”, or otherwise absorbing external operations into your own.

There are two ways this can generally happen: first and most commonly, one company purchases the other. The company buying the other is then challenged with absorbing the data or the purchased company into their own systems. This usually involves a combination of migration and integration; migration to move historic data on accounts, trading partners, and so forth, and integration to absorb and automate applications that can be kept from the purchased company.

The second case where businesses can — and in the economy we’re facing — should vertically integrate their supply chain is by integrating the applications from suppliers and trading partners directly into their own systems. This doesn’t involve the direct acquisition of these external companies, but rather acquires a direct feed of data from their systems to yours. Those with sophisticated data integration approaches can both receive and deliver data between external systems and their own in a bidirectional and automated manner. Depending on APIs and other requirements, this movement can also be done in near real-time with core business rules and discreet treatments applied directly to the data as it moves between internal applications and/or external systems.

Next Steps

It’s this second case that we at VL OMNI are emphasizing, in the time of COVID-19 & beyond, that ecommerce Merchants should pay special consideration to. Any efficiencies and automation that you can build into your business at this point are going to:

  • Save you money
  • Automate data flow into key applications, especially important in the cases where there is a dispersed workforce
  • Promote good operational excellence to reduce errors, delays, and need for manual (human) intervention
  • Maximize your ability to sell online and deliver physical goods as efficiently as possible

Not only do Merchants need to consider a potential increase in online orders, but they also, terribly, need to plan for a workforce that may fall ill and who might require time off. The more processes between applications you can automate now, the better prepared your business during eventualities. It’s not putting people out of work; it’s hardening your business now so you can hopefully grow, if not at least maintain.

 


At VL OMNI, we’re genuinely here to help. This is true now more so than ever. If you find yourself in a time of pressure and need advice, you can rely on VL OMNI and our experience directly, or we’ll refer you to the right Partner in our network. At times like these, it’s about how we come together!