CONTRIBUTION BY Martin Verwijmeren – CEO and co-founder of MP Objects
Everything you know about supply chain visibility is wrong or at the very least it’s limited. You may look at your supply chain today and say “I have good supply chain visibility” but I’d ask you how you define it?
For too long, supply chain visibility has been associated with pure track and trace and/or passive analytics. Our systems may provide some basic visibility but it’s visibility that is not actionable. It tells you what goes wrong but it doesn’t help you ensure that doesn’t affect your relationship with your customers in real-time leaving you better at planning but not better at executing that plan.
The question is how do you make our visibility actionable? How do you encourage and implement your supply chain visibility to better optimize your processes in the moment? How can you truly make visibility a core competitive advantage for your supply chain?
The Three Stages of Supply Chain Visibility
There are three critical areas where your organization may not be reaching its potential with making supply chain visibility actionable. Below, I will detail the stages I see as the progression forward thinking supply chains are taking to make better real-time decisions on the data they capture.
Stage 1: Visibility: getting the data end-to-end
The first evaluation your organization needs to make is if you are even capturing the right data in the first place. Often times organizations equate supply chain visibility with insight into transportation but this is just scratching the surface for what you should be capturing and there may even be steps in transportation that you should get more granular with especially for international shipments. Manufacturing, warehouse, cross-docking and servicing steps as well as repair steps for reverse logistics can and should all be tracked toward an end-to-end customer order. By tracking the granular steps across your end-to-end supply chain, it enables you to continuously evaluate and build towards optimizing your supply chain as well as helps you set the right expectations with your customers.
The goal is to ensure you have a single source of truth for your customer order. A single place for your team to take action on exceptions for your orders and ensure they arrive on-time in-full (OTIF) to your customer.
Stage 2: Collaboration: making the parties work together
If you identify all the milestone steps you need to measure in your supply chain, you are already ahead of most organizations. That’s not the place to stop, though. With increased globalization supply chains are becoming increasingly multi-party in order to execute and deliver an enhanced experience to their customers. However, what’s important is that the customer doesn’t associate their overall experience (good or bad) with these parties but with your brand. This makes it critical to have visibility and collaboration with these partners.
This is a huge challenge for most organizations as integration with their current systems and multiple parties often are done piecemeal and maintaining these integrations is a huge undertaking for your internal IT team. It is here that multi-enterprise solutions are providing value to help to connect all supply chain network parties together to give visibility and control over these supply chain investments. All while ensuring real-time accountability and exceptions management across all supply chain steps and parties.
Stage 3: Orchestration: optimizing flows order by order
If you have made it to this stage, you have already implemented reactive action into your end-to-end supply chain execution and strategy. Supply chain orchestration helps you move from reactive to proactive by intelligently leveraging the data you capture in your supply chain to enact your unique supply chain plan and execute the perfect order for customers at the most profitable cost. By taking into account considerations such as available inventory across the network, lead times, SLAs, available internal and supplier capacity, transportation costs and other factors, your supply chain orchestrates the most effective order flow for each customer and in relation to all other customer orders. Orchestration is about putting your supply chain plan into action automatically to drive ultimate efficiency and create the best experience for the customer.
Real Supply Chain Visibility is About Action
Despite the language of the term, supply chain visibility shouldn’t be simply viewed. It should be used to enact action that helps you consistently optimize efficiently, reduce costs related to inventory safety stock, transportation and activities and most importantly, to deliver the most optimal experience for each and every customer. With the complexity associated with supply chains today, that is incredibly difficult to do with your current systems and strategies. It’s organizations like yours that orchestrate the perfect order every time that will retain current customers, and equally important, win more customers with proven competitive advantage in the supply chain.