Boosting the performance of a supply chain often means improving visibility – sounds easy but the challenges are significant…
There was a time when visibility was not a supply chain issue, but that’s half a century ago when supply chain partners were relatively close. These days, supply chains are longer and the pressure has become intense, not only to move goods faster, but to be more responsive and flexible.
Gavin Davidson, product marketing director at NetSuite, points out that companies now have to look beyond traditional vendor bases in pursuit of more value and flexibility in how they acquire products and services. “With each new vendor might come new countries, regulations, currencies, time zones and language barriers, so having the most up-to-date information about every area of your supply chain – no matter where it is – is critical to establishing and maintaining service levels in a modern business. Without this level of visibility, an organisation will run inefficiently, incur costs to revenue and resource, and potentially harm its reputation with customers.”
There are other advantages, says Fab Brasca, global vice president global solutions at JDA Software. “Establishing full visibility across supply chains allows companies partners internally and externally to see where the supply chain stands at any given time. This way everyone can work together to make alternative plans when problems arise; from inclement weather to differing stock levels, it enables suppliers time to seek alternative transport routes, or a warehouse which has spare capacity.”
But establishing and maintaining visibility along the supply chain can be challenging. “Supply chains are getting longer and longer, and many retailers face the challenge of not being able to keep the promises they make to their customers,” says Alex MacPherson, director of solutions consultancy at Manhattan Associates.
“Getting the right information within a supply chain, at the right time, can therefore be extremely difficult. Retailers aren’t just working with one partner in their supply chain, but the extended and often fragmented supply chain encompasses many, with numerous components and suppliers required to work in harmony in order for businesses to deliver on their promises to their customers. Add in the global reach of supply chains, with various partners spread across the world, and the challenge increases: providing information electronically is not a ‘standard’ in every country, so collating various pieces of information and using this to promote visibility remains an obstacle,” says MacPherson.
Alex Saric, smart procurement expert at Ivalua, points out that to maintain effective supply chain visibility, organisation need access to a broad set of data, both externally and internally. “Unfortunately, internal data is in poor shape at most organisations, spread out across many systems in inconsistent formats and not accessible by decision-makers. Deriving actionable insights is greatly hindered as a result. Such data issues must be addressed to give decision-makers a solid data foundation from which they can operate. To do so, organisations should establish a single platform for supply chain leaders. One that integrates with others systems, generates clean data and helps normalize data across systems.”
JDA’s Fab Brasca believes there are three ‘levels’ of data and software that need to be implemented and available. “The ‘base’ layer is formed of structured and unstructured data inputs – from information about suppliers, carriers and transactions, to event, weather and social media data. The ‘middle’ layer involves using technology to aggregate data, create correlations and develop insights which can support the entire supply chain. The ‘top’ layer involves using mature enough software to use the data and insights from the lower tiers, combined with contextual industry information, to support automated supply chain planning and execution. The more insights generated, the more visibility there is within the supply chain ultimately keeping everything operational,” says Brasca.
The temptation might be to rush out and invest in the latest technology. However, argues Mohit Paul, SVP EMEA at BluJay Solutions: “Before embracing the latest tech, most retailers need to focus on harnessing the data assets they already have, which can be used to discover ways to enhance the customer experience. Twenty-eight per cent of logistics experts we asked said mobile devices and apps would deliver the most supply chain innovation by 2023.
“The saying is true – the most influential IoT device is a mobile phone in your customers’ hands. Current examples of leveraging this technology include one-hour delivery slots and parcel tracking, but we can expect even more personalised efforts in the near future,” says Paul.
The visibility challenged is most pronounced in global supply chains that extend thousands of miles and incorporate dozens of partners.
NetSuite’s Gavin Davidson, points out that many companies have spent a lot of time and effort building their supply chains, but there is an element of risk in communication as soon as a product is put into a container for international travel. “If not handled properly, you risk having no visibility from the time the container is loaded onto the vessel until it lands at the destination.
“I’ve had several organisations tell me that opening a container is like Christmas morning – you never really know what’s inside until you open it. Especially critical in the food industry is the ability to confirm that climate-controlled containers have maintained the appropriate levels throughout the journey. One potential solution is to use GPS tackers and sensors to provide continuous feedback regarding the location and condition of the container,” says Davidson.
Technology is the critical enabler for supply chain visibility but there are different approaches that can be adopted.
“There are numerous solutions that enable organisations to innovate and optimise complex distribution and transport operations with actionable visibility across the network,” says Manhattan’s Alex MacPherson. “These solutions also mean that retailers can boost warehouse productivity and equipment efficiency, and gain the responsiveness to adapt to expected or unexpected demand increases and decreases.
“Additionally, a single, comprehensive logistics solution designed to support the entirety of an organisation’s shipping needs, regardless of mode, geography or channel, is essential; providing transport modelling, fleet optimisation and dispatch, in-depth parcel and courier support, giving visibility and merging transport and distribution operations in a single logistics system,” says MacPherson.
“It’s extremely important for IT solutions to bridge functional gaps between warehousing, transport and the extended enterprise, which continues to be a critical link in the supply chain. The convergence of processes among internal teams and external trading partners allows for more responsive operations and real-time visibility, and lays a foundation for increased profitability,” says MacPherson.
Ivalua’s Alex Saric focuses on the growing importance of cloud-based technologies. “Centralised cloud-based procurement platforms provide the solid data foundation needed to gain complete visibility into suppliers, their capabilities, risk factors, transactions and more. Not only do these smart procurement platforms provide full visibility into risk factors, they also allow for easy collaboration, allowing organisations to tap into innovation from the supply chain when developing new products and services.”
The ideal set-up, says Davidson, “to have your solution function as the voice of reason and central communication hub. Many communication methods are available – from manual, to fully automatic correspondence including EDI, web services, file transfer protocol, CSV imports and IoT sensors. The most important part is getting all that information accurately entered into your business management system, so it can be effectively monitored and communicated across the whole supply chain to ensure smooth operations.”
BluJay’s Mohit Paul emphasises the importance of control tower and mobility solutions. “Modern control towers enable real-time visibility among partners, so they can monitor in-process shipments, as well as gain instant insight on available capacity. With heightened visibility, partners can take predictive and proactive action, which is something they couldn’t do with the first generation of supply chain control towers.
“Mobility platforms with the flexibility to manage the entire delivery experience from end-to-end also provide visibility by connecting carriers, operations, management, drivers, and customers with real-time data and automated work flows – from scanning orders onto delivery vehicles, to routing, tracking, and providing proof-of-delivery.
Of course, there are a raft on new technologies in the pipeline, including blockchain, artificial intelligence, machine learning, and big data. The challenge here is deciding when to take up the technologies.
Saric points out that artificial intelligence is already having an impact. “AI has the capacity to identify and alert organisations to instances of risk, such as supply chain disruption or even compliance issues and instances of fraud. Additionally, AI can put organisations on the path to automating low-value, time-consuming tasks – such as invoice processing. This will free up more time for organisations to focus on risk management and supplier collaboration.”
MacPherson agrees that there is a place for AI but adoption is still fairly low. Blockchain is ready to make an impact, at this stage it is still difficult to build a compelling RoI, he says.
Mohit Paul points out that a BluJay survey found that when logisticians were asked which technology would deliver the most supply chain innovation in the next five years, drones and blockchain each got just two per cent of the vote. And, warns Paul: “The introduction of drones and blockchain technologies could cause a supply chain nightmare if logistics companies are not careful. Many organisations still rely on out-dated legacy processes which would make the incorporation of the huge amounts of data required a very steep learning curve.”
This article first appeared in Logistics Manager, July 2019.
This article first appeared in Logistics Manager, July 2019.