Let's Get Visible
Shippers gain powerful insight from end-to-end supply chain visibility, where execution and technology converge right before your eyes.
More to the Story:
Ragweed rages in Boston and legions of allergy sufferers rush to their local Walmart for pharmaceutical relief. Meanwhile, Walmart and Bayer, which makes the allergy drug Claritin, observe that Bostonians are complaining about their allergies on social media. Walmart's sophisticated, real-time inventory view shows area stores running low on Claritin, and reveals that they will not meet demand without replenishment.
This hypothetical scenario demonstrates the type of end-to-end supply chain visibility possible today, according to Roddy Martin, vice president, global supply chain management (SCM) thought leadership and SCM product marketing at Oracle, the California-based provider of cloud applications and platform services. As technological advances continue to race forward, shippers and their supply chain partners can gain increasingly granular insight into their supply chain—on both the supply and demand sides—and respond accordingly.
In the fictional Boston case study, Walmart—which Martin cites as a leader in supply chain visibility—and Bayer can respond to the combination of insight into demand (the allergy sufferers' social media complaints) and supply (available inventory in area stores) to ensure they adequately replenish inventory on time to meet consumers' needs.
"That kind of insight can be worth a ton of money," Martin says.
Shifting Capabilities, Shifting Goals
The way we understood supply chain visibility one decade ago today seems quaint. "Years ago, the baseline for visibility was simple track and trace—where's my stuff?" says Stephanie Miles, senior vice president of commercial services for Amber Road, a New Jersey-based on-demand global trade management solutions provider. "Today, companies have advanced far beyond that."
In particular, companies that pursued supply chain visibility 10 to 15 years ago aimed to establish a central repository where they could store and maintain master data, and collect and house snapshots of transactional data.
"Basic reporting and query capabilities yielded information about results to inform decision-making," explains Loraine Yalch, senior vice president, client solutions and business development at Armada, a Pennsylvania-based integrated supply chain solutions provider. "Contrast that with today, where information flows in real time to these platforms from myriad trading partners and external data sources.
"Information is being leveraged to execute the supply chain today, not just report what happened yesterday," she adds. "Critical information and alerts are pushed to mobile devices. Business rules engines automate routine decisions when exceptions occur. Analytics look forward in predictive and prescriptive ways."
Consequently, the view of supply chain's contributions to overall business has evolved. Supply chain teams used to focus their business goals on reducing supply chain costs, but the scope has broadened.
"Supply chain teams will tell you it's still about reducing costs, but it's also about contributing to growth," Martin says.
That new potential attracts interest.
"Companies have a greater understanding across departments of the value of visibility," Miles says. "No longer is it just a standalone solution. Visibility is viewed as a tool that can benefit not just the logistics department but the other functions within the organization. That interest is fueled by some departments understanding the value of extended supply chain information for their own business processes."
Gains in technology-enabled visibility give companies the tools to shift from a supply-driven approach to a demand-driven one, which allows for better planning.
"The more sophisticated analytics you have, the more you're able to predict what's going to happen rather than wait for something to happen," Martin says. "If I see unusual demand in a particular demographic, I can start rerouting products so that I'm sending them to the right place at the right time."
When companies establish network-wide policies and processes, and integrate trading partner systems, "the result is a network that can be centrally orchestrated to operate from a single view of demand—driving more value to the business," Yalch says.
Shining a Light on Blind Spots
As people become accustomed to the way technology can make their personal lives easier, they have come to expect the same at work.
"As consumers, we can track a package, hail a ride, and control our home environment virtually," Yalch says. "In business, blind spots across our supply chains are no longer acceptable."
The technological capabilities now accessible to supply chain professionals allow companies to take innovative approaches to their supply chains.
"System and trading partners are readily enabled, analytical engines are more powerful and simpler to use, and data visualization tools are helping us see trends, draw conclusions, and communicate opportunities faster and more clearly," Yalch says.
Developing New Habits
Experts point to a number of ongoing tech trends and innovations, such as the Internet of Things and artificial intelligence, that are playing a major role in the evolution of supply chain visibility or could play an influential role in the future. The newness and sophistication of the technology can be daunting, but those who are overly skeptical will miss out on promising opportunities, as will those who do not adapt their approach to fit these advances.
"The key to success is creating new habits and adoption," says Nina Luu, co-founder of Shippabo, a California-based provider of a cloud-based supply chain management platform. "This takes time, but creating the new habit within the organization from the top down is critical to successful transformation.
"Another key to success is utilizing the new information that is now available through the system, as opposed to relying on previously known processes and data," she adds. "Trust is important—trust that the new systems will empower the company to do better."
The sheer volume of available data can tempt users to draw conclusions from every number they see, and that "can throw the business into chaos," Martin warns. Organizations that adopt robust supply chain visibility tools should be wary of the flood of figures coming their way.
"A flood of data creates a lot of noise," Martin says. "Companies such as Procter and Gamble, Nike, and Cisco, who are very good at this, don't react to every piece of data. They look at the data as a whole and react to those pieces that represent a problem."
With that in mind, Miles says, "you need to think about the total blueprint of the information flow in your supply chain to make sure that your data sources are augmenting that picture and not distracting you from it."
Benjamin Moore Paints a New Picture
During one weekend in 2017, Benjamin Moore, the Berkshire Hathaway paint company, moved its manufacturing process from a homegrown system to an Enterprise Resource Planning (ERP) system with an SAP implementation. The implementation was made to improve enterprise stability and gain visibility throughout the company's supply chain.
The company saw much improved visibility after the transition, according to Jason McMurdie, director of ERP for Benjamin Moore. Previously, workers on the shop floor relied on a paper-based system, writing information on batch tickets. With the introduction of radio frequency scanners, the company could begin to capture real-time data as workers
Under the old system, Benjamin Moore was unable to track inventory precisely and could be caught playing catch up because of a delayed view of its status. The new system allows the company to follow its inventory more closely and to plan better.
"We've got much more granular information now," McMurdie says. "We have the ability to analyze our supply chain both upstream and downstream."
Taking Data at Face Value
Crucial to the creation of a more holistic view of the supply chain is that metrics no longer suffer from discrepancies between systems within the company. The siloes are removed and information is updated regularly and consistently across the board. The company is no longer dependent on employees being able to understand how the system arrived at key data points in order for them to interpret the information.
"Now we can take the data at face value, which is huge for us and for any company," McMurdie says. "It gives us a unified platform that we can work with."
Among the benefits of a more complete and unified view of the supply chain is that Benjamin Moore can respond more quickly and confidently to its retailers.
"If a special or rush order comes in, we have the ability to know exactly where we are on the shop floor and say, 'Yes, we can accommodate this order,' a lot sooner than we could before. We know exactly where we are in manufacturing the products already in process," McMurdie says. "Having this visibility allows us to be a lot more flexible because we've got a real-time view of the world."