June 2012 | Commentary | IT Matters

Sharing Data Creates Optimal Supply Chain Visibility

Tags: Logistics I.T., Cloud Computing

Bobby Kaemmer is Vice President, Cadre Technologies, 866-252-2373

In the past decade, analysts have written volumes about the value of supply chain visibility and execution systems. It's hard to argue with the concept. When all supply chain partners' systems work together to fulfill orders perfectly, execute on-time shipments, and provide early alerts to problems, life is good.

Many companies have turned to on-demand supply chain solutions to achieve this connectivity. But before implementing an on-demand system, they must take three critical steps:

  1. Overcome diverse technical competencies between participants in a supply chain community.

    Problem: Rarely can a single operator own all, or even most, of the processes between the supplier and the retailer or end customer. Even the simplest operations may engage dozens of parties, each with different technical needs.

    The greatest challenge is that most IT departments have their hands full managing internal systems, with little time or expertise to spare for the complexities of supply chain management.

    Solution: Cloud solutions enable broader adoption of these typically sophisticated capabilities. Providing a hardware and software platform, in conjunction with a technical staff with deep domain experience, reduces the time and expense of selecting, buying, and implementing a system, and training workers.

    Because cloud solutions become an extension of existing business systems, they typically deliver a much faster return on investment, and create economies of scale moving forward.

  2. Perform logistics activities in a connected supply chain.

    Problem: The logistics provider is responsible for execution, which entails knowing what to do, what is expected, and when to do it. Visibility simply isn't possible until a supply chain works.

    Solution: Efficiency begins with creating the informational and operational processes necessary to execute orders, shipments, receipts, and payments. The system should track each stockkeeping unit to facilitate inventory replenishment; reduce inactive inventory and retail handling expenses; minimize stockouts; and optimize performance cycle times.

  3. Analyze and monitor supply chain data through dashboards and visibility tools.

    Problem: Without solid, well-thought-out business rules to manage the relationships among systems, inefficiency is certain, and logistics chaos may result. Business rules are essential for more accurate assessments when monitoring activity and inventory, measuring efficiencies, ensuring proper alignment of resources, and applying performance metrics.

    Solution: Progressive supply chain management enterprises provide exception alerts, shipment and order status visibility, performance dashboards, and flexible reporting. Once established, these analytic and performance monitoring tools enable users to explore and analyze supply chain data from nearly any perspective. Dashboards can provide periodic, scheduled analysis of current supply chain status, including on-time shipment, short-order reports, and inventory turns.

Visibility is an invaluable byproduct of supply chain partner collaboration. As companies become more sophisticated in their use of powerful supply chain technologies, visibility becomes another demonstrable value.