In my previous Supply Chain Academy blog post, I dove into the buzzword du jour: visibility. I discussed definitions, perspectives, and key uses of visibility, and I wrapped up with an exploration of the key challenges and a promise to help make supply chain visibility a reality. The task now is to identify the technologies and best practices available for harnessing the value of visibility.
As a quick recap, supply chain visibility provides access to pertinent status information about products at any point in time. The goal of supply chain visibility is to help managers make informed decisions, recognize and respond to disruptions, and positively affect financial performance. A recent SupplyChainBrain article notes that expansion of trade regulations will make visibility, traceability, and quality assurance essential requirements for food and beverage supply chains. Other industry verticals must pursue similar objectives.
These goals cannot be accomplished with paper and pencil or traditional face-to-face communication. Technology is needed to facilitate real-time information sharing. Properly implemented and linked, technology provides timely data, ensures data accuracy, and promotes accessibility—three essential aspects of supply chain visibility. In fact, improving visibility is the hot topic in technology spending, according to this January 2011 Logistics Management article and the related graphic.
Visibility within an organization is the starting point for a technology strategy. Warehouse management systems provide inventory visibility inside facilities, while transportation management systems allow you to track in-transit product. The ability to quickly capture accurate data via RFID, bar codes, and other automatic identification tools, and then communicate the information instantaneously via cell phone, data messaging, and global positioning systems is extremely powerful. Managers can access information in real time and monitor shipments as they move across the country.
Mike McCartney of QLM Consulting believes a combination of world-class warehouse, inventory, and transportation management systems, as well as an ERP system linking them together, greatly strengthens internal and partner-to-partner visibility. "If you can connect the dots electronically, then you can make optimal decisions," he said during our December 2010 interview.
When you move toward a whole-chain visibility program, things get a bit more challenging. In our recent conversation, Steve Dean, general manager of ProWare Services, LLC said, "If I want to know every time somebody touches product throughout the process, robust technology is a must." He suggests having a centralized repository of standardized information facilitated by a neutral third party such as GS1. Each supply chain participant can post and retrieve pertinent visibility information to this database via their ERP system. "It can be done, but it won’t be easy," Dean noted.
Of course, visibility-enhancing software tools can be expensive. Companies must readily embrace and invest in these technologies to gain key advantages. Potential benefits include the ability to understand and remove bottlenecks in processes, improve efficiencies, and create transparency of distant operations.
Technology alone will not guarantee absolute visibility of your supply chains. It also requires companies to cooperate across their supply chain networks. This cooperation encourages them to more readily share information, reduce uncertainty, and manage risk, notes a visibility article in DC Velocity.
Another effective practice is to leverage existing business intelligence. An often-overlooked source of visibility information is the advanced shipping notification. It clearly states what is on the way and how it is packed. You can use that direct visibility for allocation planning, resource scheduling, and efficient receiving. Problems can be resolved quickly and receiving costs significantly reduced, as discussed in my January 5, 2011 post.
Additional best practices for achieving supply chain visibility are provided by Inbound Logistics. The article provides a six-step process for achieving "enlightenment" and reaping the rewards of a more transparent supply chain. This includes opening the lines of communication, trusting partners, investing in technology, setting goals and monitoring KPIs, understanding how decisions affect partners, and optimizing outcomes. This process seems straightforward, but as we all know, the devil is in the details (and the implementation).
I encourage you to click the hyperlinks to access the detailed information on visibility, and then take action and provide feedback to me on your journey toward greater supply chain transparency. The positive outcomes will be well worth your efforts.