December 2017 | Commentary | IT Matters

Building Visibility, Response, Resiliency

Tags: Supply Chain Management, Logistics, Supply Chain

Sean Riley is Global Industry Director, Supply Chain,
Manufacturing & Transportation, Software AG, 630-434-0720

Chief supply chain officers (CSCO) are tasked with a range of challenging issues when it comes to managing a company’s product supply chain. To maximize productivity and efficiency, the CSCO should consider visibility, response, and resiliency the most important aspects of supply chain management.

Digital transformation is underway in supply chain management and it is evident in visibility. Manufacturing is an intricate web, complicated by the global economy and developments such as big data and sensor technology. CSCOs encourage using this data to help better understand manufacturing processes.

The Internet of Things (IoT) allows the integration of customers, the front office, and supply chain operations to provide a more holistic picture of operational efficiency. IoT makes situational awareness possible through real-time, end-to-end supply chain visibility. It is a critical enabler of obtaining real-time insight into production performance, giving manufacturers the power to identify problems and resolve them with minimal cost and disruption.

Gaining visibility into the supply chain is invaluable, but your CSCO knows that it means nothing without an informed, right-time response.

Awareness and visibility are fundamental building blocks to gaining insight into data, and are critical to understanding the correlations between supplier tiers, production, and customer demand. These connections are important as the supply chain leaves little room for error or oversight.

There is a difference between becoming aware of a problem immediately and acting upon it immediately. A crucial, yet often overlooked function of responsiveness is ensuring an organization and its partners are responding at the right time and not throwing maximum resources at every issue.

Resilience Guidelines

Manufacturers need to increase their awareness and responsiveness to the digital supply chain to remain competitive. One of the most important factors for success is resiliency.

Resilience ensures enterprises can effectively manage any exception or requested change while improving net margin, without sacrificing improvements to customer satisfaction or revenue growth. It is important to CSCOs that supply chains function with agility and awareness so they are not paralyzed by disruptions. A CSCO wants to ensure that while some workflow disruptions are unavoidable, the supply chain has a critical need for risk assessment and mitigation.

There are three simple guidelines to understanding resilience within the work of manufacturing:

  1. Manufacturers should identify internal changes, understand their impact, and quickly adjust to them without incurring a negative cost or impacting customer satisfaction.
  2. Identify external changes. Then understand the potential repercussions of these changes and quickly adjust to them without a negative cost or customer satisfaction impact.
  3. Educate enterprise associates on supply chain resiliency and functionality processes as well as business impacts to maintain consistency and continuity.

 

Building the Foundation

Becoming resilient means a manufacturer can identify problems in real time and act on them before customers feel an impact. It means they can identify and understand the leading indicators that drive performance success to manage issues before they occur. Resilience, however, means nothing without also having the foundation of strong visibility and responsiveness, and being able to clearly discern the intricacies of the supply chain.

 






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