RAI: An overview of GT Nexus’s cloud based solutions.
T.S: GT Nexus delivers a “social media” model to the retail supply chain. It is a cloud-based platform that connects all of the necessary trading partners in one place. When orders are placed or adjustments are made, everyone sees the latest version. By connecting everyone into a single network, GT Nexus enables multi-level collaboration and visibility to support smarter decisions and programs designed to reduce costs and improve performance. Today, more than 25,000 businesses move more than $100 billion worth of goods on the GT Nexus platform each year.
RAI: How does the solution creates cost efficiency in the supply chain?
T.S: GT Nexus delivers efficiency in the following ways:
Efficiency savings by eliminating paper and automating processes
Working capital savings by extending payment terms with their vendors
Cost of goods savings through early payment discount programs
Bank line savings by eliminating letters of credits
Inventory cost savings by enabling direct shipments and mark-for-store goods
RAI: How much can an Indian retailer expect to save by implementing GT Nexus’s solution?
T.S: GT Nexus offers standardized, streamlined and automated workflows for information exchange on a digital cloud platform, making the supply chain paperless. This helps to improve visibility, productivity and accountability in the supply chain and improves the level of trust and understanding between the retailer and its trading partners. Although our global benchmark saving is typically 1-3% of the procurement volume, we believe we can improve on this for Indian retailers. Since majority of modern retailers in India are yet to be profitable this can be a huge saving on the bottom line, especially when coupled with the double digit top line growth they are experiencing.
RAI: How different does the solution need to be for India vis-à-vis other international markets? What model of collaboration will work for India?
T.S: The costs and challenges associated with labor are major concerns for Indian retailers. Getting people with the right skill sets and retaining them is becoming increasingly difficult for many companies. Human errors, processing delays and lack of consistency are other common drawbacks – the result of prevalent manual labor processes. Automating manual, repetitive tasks in areas such as procurement, PO amendment and invoice settlement can significantly improve efficiency and productivity for Indian retailers.
The apparel and garment industry in India can benefit from not only our solutions but industry expertise. Brands and retailers operate complex supply chains. With the recent factory disasters in Bangladesh, a microscope has been placed on supply chain practices. It’s more important than ever for retailers to be connected with all of their trading partners in a collaborative environment that provides visibility into all of the materials, goods and parties throughout the product lifecycle. It’s important for brands to know that goods are being created in safe factories that don’t harm the environment or workers. On top of this, retailers need to deliver goods efficiently to consumers to meet demand. This places even more importance on supply chain visibility and agility. To maintain this level of supply chain visibility, retailers need to operate their business as a supply network, where everyone is connected and collaborating in one place. GT Nexus’s cloud software can have a major impact here. This is where the entire value chain can be connected using just an internet browser – and all parties are updated instantly if a change occurs.
RAI: What’s in it for the vendor, why should they adopt your solution?
T.S: In the past, global retailers were famous for pressuring suppliers for the lowest possible price. In addition to cost, companies in consumer goods and manufacturing extended payment terms on suppliers – sometimes from 30 or 60 days out to 90 days or 120. There’s danger here. Once companies get into a mindset of thinking only of their own working capital, they lose sight of the big picture and create havoc in the supply chain. The result of actions to improve their own situations, such as payment terms extension, often puts pressure on trading partners, creating risk and resulting in failure to deliver on goods or services.
Taking a step back and looking at the big picture is important. All Retailers want to pay later and better utilize capital, as opposed to tying it up in inventory. Suppliers want to get paid as quickly as possible and with the lowest associated costs. The two sides have conflicting interests – and it’s often said that one party is the winner and the other the loser in a transaction. But that shouldn’t be the case.
If optimizing working capital stresses a retailer’s vendors, then it is essentially strangling its own supply chain – forcing vendors to take a hit on margins or increase their prices. GT Nexus helps retailers think holistically about the supply chain and work toward ways to better collaborate across all parties can pay heavy dividends in the long run. For example, GT Nexus facilities early payment programs that enable suppliers to get paid in just a few days in exchange for a slight invoice discount.
Nearly all vendors using our platform describe their experience using GT Nexus in the following way: “At first we had doubts and concerns about this system, but once we realized how easy it is to use and the benefits it provides we have no hesitation in recommending it to other suppliers or even other retailers”.
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