Boosting Supply Chain Visibility
Improving supply chain visibility is a top priority of companies striving to maximize global operations performance. Nathan Pieri, senior vice president of marketing and product management for East Rutherford, N.J.-based Management Dynamics, a global trade management solutions provider, offers these tips for using technology to increase visibility.
1. Look at the big picture.Make sure your visibility software is flexible enough to accommodate various fulfillment models in operation throughout the entire company. Look to accrue benefits across the enterprise, not just within one product line or operational model.
2. Create an "information hub." Eliminate the need to re-key information by centralizing key order, shipment, and inventory information from all internal inventory planning systems.
3. Don't assume data quality. Data quality exceeds 91 percent in only 16 percent of visibility software implementations, according to the Aberdeen Group. Make sure the information feeding your system is timely and accurate.
4. Choose your trading partners wisely.Data quality starts at the source. Certify new connections by carefully assessing information requirements and leveraging existing integration from an established network of transportation and logistics providers and brokers.
5. Postpone inventory allocation decisions. Many leading companies use visibility systems to track shipments at the SKU level. This tracking allows them to treat containers as "floating warehouses" to implement inventory diversions through a transload facility or to postpone all inventory allocation decisions until just prior to entry.
6. Push visibility back to origin. Savvy companies link orders to shipments and manage in-transit inventory. New customs regulations, such as 10+2, make importers more accountable. Many of the required 10 data elements relate to where goods are loaded.
7. Use scorecards to manage trading partners. With visibility comes a rich storehouse of supply chain data that can be used with all trading partners. Create a data scorecard to manage supplier compliance and performance.
8. Track landed costs along the supply chain. Use visibility to track product, freight, and insurance costs as well as integrate trade compliance information such as duties, taxes, and other government charges. By monitoring budget variances, you can effectively target cost overruns.
9. Use triggers to automate shipment handoffs. Leading companies use "triggers" based on supply chain events to plan warehouse receipts, schedule pickups, and issue exception alerts. These triggers create tremendous value by compressing order cycle time and helping to reduce demurrage and detention fines.
10. Become your own 4PL. Shippers can implement and deploy new value-added services for their business units and "plug-in" logistics provider partners - in effect, becoming their own fourth-party logistics providers (4PLs). This model's advantage is that all trading partners integrate to one standard and are managed both tactically and strategically. The central logistics team controls all information assets and delivers value-added services to constituents.