Supply chain executives, technology companies, and consultants have been talking about the importance of supply chain visibility and execution for many years. Yet, few have truly mastered this discipline so far. And now the operating environment is more dynamic, global, and uncertain than ever, posing additional challenges. But the technology landscape has also changed, with applications evolving into solution platforms.
What are the biggest “black holes” still remaining in supply chain visibility today? Is visibility alone enough to deliver sufficient business value? If not, what capabilities should companies look for in a supply chain execution platform? Those are the main questions I discussed with Kirk Knauff, CEO at Kaleris, on an episode of Talking Logistics.
Supply Chain “Black Holes”
Since so few companies have achieved end-to-end supply chain visibility, I began our discussion by asking Kirk where the “black holes” are that prevent companies from realizing the full benefits of visibility.
Kirk points out that although most people think in terms of a singular supply chain, moving goods from origin to final destination actually involves multiple supply chains. “As supply chain technology has advanced, software companies have developed point solutions to address specific problems, but they don’t always come together to provide an overall view of supply chains,” says Kirk.
“With fragmented and dynamic supply chains and diverse software applications, the challenge is getting the information to roll up to the enterprise level, with analytics and optimization to help solve broader problems at the execution level.”
Going from Visibility to Value
Once companies obtain visibility to their supply chains, is that enough to create real value? Kirk notes that even when you have real-time snapshots of your operations, “the real challenge is what do you do with that data? It’s a hierarchy of needs: first, you have to get the data, then you have to understand what it means, and finally you have to be able to do something with that information — optimizing operations to gain added velocity, improve throughput and asset utilization, and increase efficiency. That happens at the execution layer.”
Applications vs. Platforms
Kirk talks about pulling information together from multiple applications to create value at the execution layer. So, I asked him to explain the differences between applications and platforms. Kirk comments that, “Point applications solve specific problems, but as you integrate multiple applications and add a layer of visibility, analytics, and optimization to the combination, you create the platforms companies are looking for to provide that next level of value. That intelligence layer is incredibly important.”
Kirk gives an example of using a “track and trace” application to provide visibility to orders on a freight train, then using predictive analytics to estimate its arrival at the rail yard and distribution center, and then having execution capabilities to perform the tasks required to complete the process as a way to define the value of point solutions versus an integrated platform.
Kirk goes on to suggest that what is really needed is collaboration between open platforms and open networks from other information providers, even competitors, to share data to jointly solve industry challenges. He also suggests that public/private partnerships will be important going forward to solve some of the bigger supply chain challenges the industry faces.
Moving Forward to Value
What questions should companies ask themselves to assess where they are today — and what actions to take moving forward — with regards to supply chain visibility and execution? Kirk shared some great insights and advice on this question and more, so I encourage you to watch the full episode for all the details. Then post a comment and keep the conversation going with your own perspective and questions on this topic.