Achieving global supply chain visibility is a journey that companies have been on for many years, but most haven’t reached that promised land yet. What are the big hurdles companies must overcome to achieve this goal? What are some of the building blocks or foundational capabilities required? How do you translate global supply chain visibility into actual business benefits? Those are just some of the questions I discussed with Julian Duerschmidt, VP Global Supply Chain Optimization at GEODIS, in a recent episode of Talking Logistics.
Defining Global Supply Chain Visibility
Anyone who has been in the logistics industry for a while knows that achieving global supply chain visibility is the ultimate promised land, but few, if any, companies have reached it. Perhaps one reason it’s so hard to achieve is that it means different things to different people. Therefore, I began our discussion by asking Julian to define global supply chain visibility and why it is so hard to achieve.
Julian provided three general categories for what people consider the goal of supply chain visibility. The first is reliability. “Some companies want to see their products step-by-step along the supply chain,” says Julian. “But what they really need is reliability. They need to know that each touchpoint along the way is going to be 99.9 percent accurate [in products or materials] being there.”
A second category is small-to-medium sized companies that are reshaping themselves through acquisitions. These growing businesses tend to have decentralized operations that are hard to monitor. “So, one of the first things the chief supply chain officer wants is visibility to what is going on across the organization,” notes Julian.
A third category is visibility into upstream suppliers, especially for companies that use contract manufacturers. “If you have a supplier who is not performing well, you probably want to get visibility to [those upstream supply chain processes] to understand where the problems lie so you can improve them,” says Julian.
Julian notes that a lot of what drives visibility across these categories is data connectivity — that is, gaining access to supply chain data and getting it into your systems to provide useful information. “That enables you to measure and monitor performance along the way,” concludes Julian.
Making smarter decisions faster
As the pace of business and the speed of change continue to increase, executives want real-time information so they can make smarter decisions faster. But what does “real-time” mean in a supply chain environment where most communication is still handled over EDI?
Julian agrees that EDI is just a point-in-time view. His definition of real-time is instantaneous — knowing exactly what is happening now. He gives the example of the Uber app as what most people today would consider real-time visibility.
Enabling real-time visibility requires systems using APIs to communicate and GPS devices for tracking locations. “The problem,” notes Julian, “is that this requires physical tracking devices attached to each product or shipment. That’s expensive.” It can also lead to data overload with too much unimportant data. Companies have to decide what their objectives are and what data they need to accomplish this.
Driving value from visibility
Since achieving supply chain visibility has been a long and often expensive road for companies, the need exists to cost-justify this journey. I therefore asked Julian for some examples of how companies are driving this value.
Julian comments, “When you have visibility to your inventory, your planning can become more robust. Inventory is one of the largest expenses for most companies, therefore, if you can take a day or two out of that inventory it can mean significant savings.
“Better inventory planning also leads to better operations planning,” continues Julian. “Companies can better optimize manufacturing and distribution plans when they have visibility to upstream inventory.”
Julian notes that inventory visibility can also improve customer service. “Customers want to know where their orders are.”
Product quality is another potential benefit, especially for products that are sensitive to temperature and humidity. Using tracking devices that measure temperature and humidity allows companies to ensure damaged product does not get to consumers. Understanding where products are getting lost, pilfered or damaged is another benefit Julian mentions.
So, what questions should companies ask themselves to determine where they are on the journey to supply chain visibility, and what distinguishes the leaders from the laggards in this area? What steps should companies take to start on or advance in this journey? Watch the full video for insights on these questions and more. Then post a question or comment and share your perspective and insights on this topic and keep the conversation going!