Executive Summary Today, the performance of an organization hinges more than ever on the effectiveness of flows between, and amongst, trading partners. It is not easy. The supply chain is not linear, and the relationships extend across geographic borders and industry sectors. Outsourcing relationships have grown in the last decade; however, the automation of these networks has not kept pace. In the words of one respondent interviewed for this report in a facilitated workshop to review the data, “Today, we connect trading partners through spreadsheets, email, phone and fax. It is antiquated. I liken it to baling wire, chewing gum and duct tape. I need solutions that can synchronize and harmonize data across trading partners in real-time. My operating committee does not think that it is sexy to invest in B2B solutions, but it is needed. Today, it is almost impossible for us to understand the manufacturing status of purchase orders, and have accurate information readily on supply chain visibility of in-transit shipments. As a result, we make the wrong decisions, and have unnecessary wait times to get information.” These comments echo the findings in this study. Respondents operate value networks, but they struggle to get to the data they need. The outsourcing of logistics is greater than manufacturing. Eighty-one percent of companies outsource logistics. The volume of outsourced logistics is 48% on average. In contrast, 66% of companies outsource manufacturing. The outsourced volume manufacturing volume varies, but averages 15%. While the networks are complex, and the goals are many, progress is hard to track. This leads many supply chain leaders to ask, “What is the current state? What is the opportunity?” Answering these questions is the goal of this report. Let’s start with the current state. As seen in Figure 2, the average respondent in this report believes that the supply chain today is more controlled and global than compared to two years ago. While they have made improvements in agility and proactivity, there is much more left to do. The largest challenges are in the use of outside-in data to improve channel sensing and reduce risk. While the supply chain today has made progress in transactional efficiency, companies are less competent at sensing opportunities and mitigating risks. The largest area of business pain for respondents is supply chain visibility. Organizations in the study are also dealing with issues on how to resolve demand and supply volatility, drive alignment and use data. We find that today’s organization is drowning in data; yet, lacking insights. Much of this is due to the use of spreadsheets, portals, fax, phone and email for inter-enterprise connectivity with trading partners in B2B networks. These business pains are outlined in Figure 3. While the definition of supply chain visibility may seem simple, it is not.

1. Building Effective Business
Networks in Process Industries
Improving Supply Chain Value Networks
3/10/2015
By Lora Cecere
Founder and CEO
Supply Chain Insights LLC

2. Page 2
Contents
Report Overview
Disclosure
Research Methodology
Executive Summary
Defining B2B Networks
Moving Data through Value Networks
A Closer Look at Supply Chain Visibility
Satisfaction with Business Network Solutions
Recommendations
Conclusion
Other Reports in This Series
Appendix
About Supply Chain Insights, LLC
About Lora Cecere
3
3
3
5
7
10
11
12
13
14
14
15
19
19

3. Page 3
Report Overview
The Supply Chain Insights team is focused on bringing supply chain research to business leaders.
This report captures the highlights of a quantitative research study conducted on the use of B2B
networks from 113 respondents in process industries during the summer of 2014.
This report is intended for you to read, share, and use to improve your supply chain decisions. Please
share this data freely within your company and across your industry. All we ask for in return is
attribution when you use the materials in this report. We publish under the Creative Commons
License Attribution-Noncommercial-Share Alike 3.0 United States and you will find our citation policy
here. However, this report is under embargo until April, 2015.
Disclosure
Your trust is important to us. We are open and transparent about our financial relationships and our
research processes; and we never share the names of respondents and/or give attribution to the
open-ended comments in our data collection.
Research Methodology
This study is designed to understand the current state of business network technology deployment in
process industries, and the value gained from these implementations. In this study, we take a closer
look at the most common business network solution provider for the process industry, Elemica, and
test the impact on operational performance. In this study, 40% of the respondents were Elemica
customers. The survey findings are based on data from known respondents. The definition of a
business network is shown below:

4. Page 4
Survey respondents were sourced from Elemica’s client base and Supply Chain Insights’ contacts.
They were also sourced from social media—Twitter and LinkedIn—and a presence on the Supply
Chain Insights website. The only offer made to respondents for participating in the survey was the
sharing of results at the end of the project.
In each study, the respondents are carefully screened against established criteria (see Figure 1). We
actively monitor and filter respondents to be sure that we attract knowledgeable participants. In this
study, 64% of respondents are from multinational process chemical companies. A summary of the
overall demographics for this study are shown in Figure 1.
Figure 1. Study Overview

5. Page 5
Executive Summary
Today, the performance of an organization hinges more than ever on the effectiveness of flows
between, and amongst, trading partners. It is not easy. The supply chain is not linear, and the
relationships extend across geographic borders and industry sectors.
Outsourcing relationships have grown in the last decade; however, the automation of these networks
has not kept pace. In the words of one respondent interviewed for this report in a facilitated workshop
to review the data, “Today, we connect trading partners through spreadsheets, email, phone and fax.
It is antiquated. I liken it to baling wire, chewing gum and duct tape. I need solutions that can
synchronize and harmonize data across trading partners in real-time. My operating committee does
not think that it is sexy to invest in B2B solutions, but it is needed. Today, it is almost impossible for
us to understand the manufacturing status of purchase orders, and have accurate information readily
on supply chain visibility of in-transit shipments. As a result, we make the wrong decisions, and have
unnecessary wait times to get information.”
These comments echo the findings in this study. Respondents operate value networks, but they
struggle to get to the data they need. The outsourcing of logistics is greater than manufacturing.
Eighty-one percent of companies outsource logistics. The volume of outsourced logistics is 48% on
average. In contrast, 66% of companies outsource manufacturing. The outsourced volume
manufacturing volume varies, but averages 15%.
While the networks are complex, and the goals are many, progress is hard to track. This leads many
supply chain leaders to ask, “What is the current state? What is the opportunity?” Answering these
questions is the goal of this report.
Let’s start with the current state. As seen in Figure 2, the average respondent in this report believes
that the supply chain today is more controlled and global than compared to two years ago. While they
have made improvements in agility and proactivity, there is much more left to do. The largest
challenges are in the use of outside-in data to improve channel sensing and reduce risk. While the
supply chain today has made progress in transactional efficiency, companies are less competent at
sensing opportunities and mitigating risks.

6. Page 6
Figure 2. Respondents’ Descriptors of Their Supply Chain
The largest area of business pain for respondents is supply chain visibility. Organizations in the study
are also dealing with issues on how to resolve demand and supply volatility, drive alignment and use
data.
We find that today’s organization is drowning in data; yet, lacking insights. Much of this is due to the
use of spreadsheets, portals, fax, phone and email for inter-enterprise connectivity with trading
partners in B2B networks. These business pains are outlined in Figure 3.

7. Page 7
Figure 3. Business Pain of Respondents
While the definition of supply chain visibility may seem simple, it is not. As outlined in our prior reports
on supply chain visibility, it means different things to different people within the organization.1
The
requirements vary by role. One of the barriers to building connectivity within value networks is getting
alignment on definitions and business requirements. In meetings, teams will often use the same
words with very different meanings.
What is the opportunity? In this report, we show that companies with greater usage of B2B network
providers rate their performance significantly higher on some aspects than those not using B2B
networks.
Defining B2B Networks
Why is something that seems so simple, so hard? Progress has happened quickly in e-commerce
and slowly in B2B. The answer comes down to defining effective forms of connectivity.
There are many options. The building of B2B networks—interconnectivity between trading partners in
the supply chain value network—is possible through many formats. This includes Electronic Data
1
What is Supply Chain Visibility?, Supply Chain Insights Report, March 2014

8. Page 8
Interchange (EDI), business portals, ERP plus Value-Added Networks, phone, fax and email. In a
prior all-industry study, we found that 7-9% of industry flows move through specialized B2B value
networks.2
(Elemica is used predominately in the chemical industry, while E2open is the most
commonly used in the high-tech and electronics industry, and GT Nexus is the most frequently used
by logistics providers.)
In this study, we wanted to understand what forms of connectivity were being used and how these
choices drove value in supply chain visibility and access to data.
It is not a choice of one or the other form of communication. Instead, there are a multitude of options.
We find that the average respondent in the survey, as shown in Figure 4, uses four types of B2B
solutions. The most common are phone/email/fax/mail, EDI/XML, and spreadsheets.
2
EDI, Workhorse of the Extended Supply Chain, Supply Chain Insights, 2014

9. Page 9
Figure 4. B2B Solutions Used by Companies to Connect Trading Relationships
Figure 5. B2B Solutions Used by Companies to Connect Trading Relationships

10. Page 10
The least important and lowest performing solutions for interconnectivity are enterprise portals and
the use of ERP extensions (like SAP SNC), or ERP plus Value-Added Networks. The lack of a
persistence layer and a common protocol are barriers for effectiveness.
Most B2B networks today are held together through manual intervention. This is a barrier to greater
supply chain visibility and improving the effectiveness of business trading networks.
Moving Data through Value Networks
When it comes to B2B networks, not all data is created equally. As shown in Figure 6, the greatest
gaps in the performance of B2B solutions are in the areas of demand data, logistics network
information, and global shipment visibility. Companies are more comfortable with the current state of
Vendor Managed Inventory (VMI) solutions and the exchange of quality data in trading relationships.
Many of the gaps are large (greater than 40%).
Figure 6. Performance versus Importance of Data Shared Between Trading Partners

11. Page 11
A Closer Look at Supply Chain Visibility
As more and more business is outsourced, one of the major stumbling blocks for companies is
effective supply chain visibility. The words “supply chain visibility” means something very different
within the company. The current state of supply chain visibility for the respondents in the study is
shown in Figure 7.
Figure 7. Current State of Supply Chain Visibility
Companies are more satisfied with visibility within the company than they are with first-tier
relationships; and they are more satisfied with the current state of first-tier suppliers than the sharing
of information with second- and third-tier suppliers.
The first step in improving supply chain visibility is defining what it means, and then aligning the
methods of B2B connectivity to bridge the gap.

12. Page 12
Satisfaction with Business Network Solutions
The gaps in supply chain visibility are large. What helps? In the study, we see two solutions
emerging. Improvements in visibility are seen in both the reduction of the number of ERP instances
and the use of B2B networks.
The first is the improvement of global inventory visibility through the simplification of the IT
environment. As shown in Figure 8, when the number of ERP instances is reduced, there is a
significant improvement in global inventory visibility; while in Figure 9, when B2B networks are
deployed there is a significant improvement at a 90% confidence level in both global inventory and
logistics visibility. There are also general trends, which are not significant, showing improvement in
other areas of visibility.
Figure 8. The Impact of Fewer ERP Instances

13. Page 13
Figure 9. Impact of B2B Network Solutions on Process Visibility
Recommendations
For companies wanting to improve business networks within process industries, here are
recommendations from the research completed for this report:
1. Get Clear on Definitions and Make Them Actionable. What seems simple is not. Each individual
within the company typically has a different definition of the term supply chain visibility. Gain clarity of
the definition and gain alignment to streamline the project plan.
2. Focus on Synchronization, Not Integration. While many will state that they want to deploy B2B
network solutions to improve value-network integration, the true value lies in synchronization and
harmonization. Synchronization enables the translation of data to make it more usable. In the data
synchronization processes, item and calendar information is harmonized and the context of the data
drives new insights. When data is tightly integrated, companies have difficulty translating item numbers
and calendars leading to issues on using data. In the selection of a solution, get clear on each vendor’s
definition of synchronization and harmonization and be sure that it aligns with your business needs.

14. Page 14
3. Understand the Impact of Different B2B Connectivity Options on Data Latency and the Impact
to the Business. Each method of B2B connectivity has a different latency. Understand the value of
data latency and getting timely trading partner data to your business processes. So while EDI data is
usually transmitted daily with a 24-hour latency, B2B networks enable hourly synchronization of data. In
areas where changes happen frequently and the impact is large—usually transportation and sourcing—
move to solutions with less latency and greater concurrency.
4. The Greater the Complexity of IT, the More Important It Is to Consider B2B Networks. As noted
in the report findings, the more ERP instances, the greater the opportunity to gain value through B2B
networks.
5. Select the B2B Network Player That Most Closely Meets Your Business Needs. The
effectiveness of B2B network solutions is strongly dependent on the presence of trading partners in the
network. Select a B2B network player both based on the presence of trading partners and the fit of the
industry solutions. After selecting a B2B network solution, actively work on partner onboarding including
the use of trade incentives.
Conclusion
Outsourcing is here to stay; but, most companies do not have an IT infrastructure to meet the
business needs. Companies want better supply chain visibility. The good news is that research from
this study shows a significant improvement when the number of IT instances is reduced and a B2B
Supply Chain Visibility solution is used.
Other Reports in This Series
Readers may gain added value by accessing complimentary reports on the Supply Chain Insights
website:
Can You Afford the Risk?
Supply Chain Visibility in Business Networks
Building B2B Networks: Who Are the Players?
EDI: Workhorse of the Extended Supply Chain
What Is the Value of a Retail Scorecard?

15. Page 15
Appendix
In this section, we share the demographic information of survey respondents as well as additional
charts referenced in the report to substantiate the findings.
The participants in this research answered the surveys of their own free will. There was no exchange
of currency to drive an improved response rate. The primary incentive made to stimulate the
response was an offer to share and discuss the survey results in the form of Open Content research
sharing at the end of the study.
The names, both of individual respondents and companies participating, are held in confidence. We
never share the name of the respondents. In this section, the demographics are shared to help the
readers of this report gain a better perspective on the results. The demographics and additional
charts are found in Figures A–G.
All respondents in the study work in a process industry and on average, has outsourced 15% of
manufacturing, and 48% of logistics, through third-party relationships with trading partners. The
business IT infrastructure is complex with an average of eight ERP deployments.
Figure A. Overview of Respondents

16. Page 16
Figure B. Respondents by Role
Figure C. Reporting Relationships

17. Page 17
Figure D. Source of Respondents
Figure E. Design of Networks. Outsourcing Relationships

18. Page 18
Figure F. Design of Networks. Outsourcing Relationships
Figure G. Funding Decisions on Information Technology Projects

19. Page 19
About Supply Chain Insights, LLC
Founded in February, 2012 by Lora Cecere, Supply Chain Insights LLC is focused on delivering
independent, actionable, and objective advice for supply chain leaders. If you need to know
which practices and technologies make the biggest difference to corporate performance, turn to us.
We are a company dedicated to this research. We help you understand supply chain trends, evolving
technologies and which metrics matter.
About Lora Cecere
Lora Cecere (twitter ID @lcecere) is the Founder of Supply Chain Insights LLC and
the author of popular enterprise software blog Supply Chain Shaman currently read
by 5,000 supply chain professionals. She also writes as a Linkedin Influencer and
is a a contributor for Forbes. Her book, Bricks Matter, (co-authored with Charlie
Chase) published in 2012. Lora’s second book, The Shaman’s Journal, published
in September 2014, and her third book, Supply Chain Metrics That Matter, which
published in December 2014.
With over ten years as a research analyst with AMR Research, Altimeter Group, and Gartner
Group and now as a Founder of Supply Chain Insights, Lora understands supply chain. She has
worked with over 600 companies on their supply chain strategy and speaks at over 50 conferences a
year on the evolution of supply chain processes and technologies. Her research is designed for the
early adopter seeking first mover advantage.