It’s no wonder that supply chain visibility is getting lots of attention recently. The benefits are many: gain a coherent view of your entire supply chain network, reduce business risks, improve responsiveness to supply and demand changes, and ultimately – optimize your supply chain performance and collaboration.
The confusing part are the marketing narratives told by vendors. All sound the same. For example, “our supply chain visibility provides a single, coherent view of your global supply chain network.”
But what’s actually included in the functionality called supply chain visibility? How is it different from the current data provided by your existing tools? Which additional capabilities should it include, and are all solutions the same? Here are four key capabilities you should consider prior to implementing a supply chain visibility solution.
Visibility across silos
It’s safe to assume that your existing supply chain software already provides some visibility into activities – whether inventory, shipments, manufacturing or other. However, you need more than just visibility of individual processes, but rather visibility into the entire supply chain. For example, while you may know that parts are missing and manufacturing in China is delayed – you want to understand the exact impact on final delivery dates to Argentina, at the other end of the supply chain.
This is easier said than done, since typically information exists in silos. Transactional systems are very rarely connected to one-another, so that each activity is managed separately. Consequently, many companies adopt manual processes for extracting data from systems and analyzing it using Excel spreadsheets. It can take hours or even days before data can be analyzed and a decision can be made. Apart from being time-consuming, such processes are prone to errors and collaboration (internal and external) is extremely difficult.
Instead, you want your solution to automate the data collection and integration between multiple systems and present the big picture – so that your team can focus their efforts on analyzing data and making timely decisions, rather than retrieving data and manipulating spreadsheets.
How important is real-time for your business? The answer may depend on your industry and the nature of your business. Generally, though, the ability to instantly view up-to-date data is less critical for long-term, strategic decisions like planning transportation routes. However, it is critical for operational decisions made throughout the day, where time can be a decisive factor.
Multiple events take place throughout the day that may affect delivery performance, capacity utilization or costs. For example, one of our customers wanted better visibility on the location of its products across the various platforms and the ‘in-transit’ volumes. By shortening the update frequency from once a day to every 5 minutes, the company realized significant cost savings on transport and handling costs.
With near real-time data visibility, the company can respond faster, reduce expedited shipments and improve on-time delivery. Furthermore, by sharing this information with their suppliers and customers, they have improved collaboration, increased service levels and reduced overall stock levels.
Another aspect of real-time visibility to consider is fast calculations and processing of large data volumes. This enables setting up a real-time control tower where decisions can be made based on the freshest information, with users understanding the impact of their decisions on the business without having to leave the system to execute them.
Visibility Tailored to Your Processes
No single solution fits all. While many companies opt for an off-the-shelf software package to create visibility, the reality is that processes, business rules and the way they are executed differ fundamentally between companies. The only way to make an off-the-shelf solution successful is to adjust your internal processes to software features.
A more practical method is using bespoke applications that can be tailored to exactly match your processes and needs. This also provides you with the flexibility to adjust software modules down the road so they adapt to changes in your business.
Visibility that Facilitates Business Decisions
Visibility is just a means to an end. After gaining insight and viewing the right data, you want to act upon it.
For example, if an inbound transport is late, and it impacts the delivery performance to the end-client, you’ll want to first analyse the root-cause of the problem. Next, you may want to view inventory levels at other warehouses, the potential delivery costs and possible service levels from those warehouses to the client. Finally, you might want to simulate different scenarios to minimize the impact of this disruption based on various business rules – network capacity, service level agreements, resource capacity and so on.
What if you could project into the future and use the enhanced visibility data to intelligently evaluate different courses of actions and the potential outcome of each? Such a predictive analytics capability will allow you to run ‘what-if’ type of logic an different scenarios and select the optimal one.
Ultimately the level of supply chain visibility you want is the one you need to best drive your business. It’s wise however, when choosing a system, to opt for one with greater capabilities than what you need currently: after all, if it delivers on its promises, it will help your business grow!