Silver bullet (noun): a simple and seemingly magical solution to a complicated problem.
In my 23 years as an industry analyst, there is probably no topic that has been written about and talked about more than supply chain visibility. I’ve certainly done my fair share of commenting on the topic.
For sure, we have made great progress on the technology and data collection front to address some of the black holes across the supply chain. Visibility to shipments across different modes is one example. Yesterday, for example, FourKites announced a strategic alliance with FedEx “that will provide businesses with new, more robust real-time visibility capabilities to help solve their most pervasive supply chain challenges, become more efficient, and unlock new growth opportunities.” Here’s an excerpt from the press release:
FourKites’ real-time visibility platform has integrated intelligence at every point of the supply chain, and currently supports 2.5 million shipments a day, connecting the supply chains of 50% of Fortune 500 companies. Through this collaboration, FourKites will be using its machine learning and artificial intelligence capabilities with data insights from the FedEx network – which reaches more than 220 countries and territories, linking more than 99 percent of the world’s GDP, through more than 16.5 million shipments daily – to create a new end-to-end supply chain intelligence platform called FourKites X. FourKites X will provide tools and insights to help large shippers and logistics providers mitigate the impacts of sustained challenges via a suite of offerings ranging from dynamic planning and pre-shipment, to enhanced visibility and proactive alerts, to supply chain optimization insights.
This is certainly a positive development with great potential for benefits, but if you get past the lofty wording, it really addresses one dimension of supply chain visibility: shipments (and perhaps orders and SKUs, for companies that are able to link that data to shipments).
End-to-end supply chain visibility, however, goes well beyond tracking shipments, orders, inventory, and assets in motion. It also involves (among other things):
- Knowing where the manufacturing/production facilities of your suppliers (and their suppliers) are physically located, and which parts or materials are manufactured/produced at each location. For more on this topic, see “Supply Chain Mapping (Insights From Indago)” and “VF Corporation: Supply Chain Mapping.”
- Knowing if there is slave labor in your supply chains, or the use of conflict minerals, or poor compliance with environmental and other regulations. As I wrote in “GM Supplier Factory Explosion: Thoughts On Supply Chain Visibility And Responsibility,” you can’t aspire to have end-to-end supply chain visibility, which is what every manufacturer and retailer wants in order to become more agile and responsive, without also accepting end-to-end responsibility. The scope of end-to-end supply chain visibility must go beyond the status of orders, shipments, and inventory — it must also include having timely, accurate, and complete visibility to labor, safety, environmental, and legal practices across the entire supply chain.
- Knowing the greenhouse gas emissions across your supply chain, including Scope 3 emissions. This is a growing challenge, especially if a new rule proposed by the Securities and Exchange Commission is enacted. For more on this topic, see “The Difficulty Of Measuring Scope 3 Emissions” and “The SEC Climate-Related Disclosures Rule: Another Supply Chain Challenge.”
Companies often make the mistake of viewing technology as a silver bullet solution to their supply chain problems, but there are no silver bullets, especially when it comes to enabling true end-to-end supply chain visibility.
The root causes of poor supply chain visibility generally fall into into three categories: IT issues (e.g., lack of data capture systems or software, poor integration of systems); People issues (e.g., poor training); and Process issues (e.g., no metrics, operate in functional silos). Simply put, if you don’t understand the root causes of poor supply chain visibility, you won’t know what corrective actions to take.
Companies also need to enlist internal and external stakeholders to develop and execute solutions. To paraphrase a popular saying, it takes a village to achieve and maintain high levels of supply chain visibility. Assemble a team of internal and external stakeholders and provide them with a clear and measurable mission to improve supply chain visibility — and also provide them with the necessary support, in terms of technology, resources, and decision-making authority to accomplish that mission.
Achieving true end-to-end supply chain visibility is a complicated problem. There is no simple or magical solution. Maybe Theodore Roosevelt was talking about supply chain visibility when he said, “Nothing in the world is worth having or worth doing unless it means effort, pain, difficulty.”
(For related commentary, see “Supply Chain Visibility: A Product Or Feature?”)