5 Ways You Will Win the Visibility Race
Keith LaBotz - October 21, 2021
2600-Year-Old Advice for Your Supply Chain
Thirty years of talking about supply chain visibility, and finally, the race is on. Will your company win or lose? You’ll have a much better idea once you’ve learned the valuable lessons in this post, and it begins with 2600-year-old advice from the Greek storyteller Aesop.
Get Ready. Get Set.
Your supply chain is in a race for its future, and the most important tip for success comes from Aesop’s fable, The Tortoise and the Hare. I merely provide valuable functional specs for your competitive advantage, but Aesop tells us how to win.
Did you hear the starting pistol? It was a warning shot. When lockdowns triggered supply chain volatility and the transportation crunch, visibility suddenly became the top priority for supply chain professionals. That’s not the only reason why you’re in this race, though.
Supply chain volatility can also indicate economic, political, and social volatility, and that’s a concern. Systemic risks from unsustainable fiscal policies could potentially derail the fragile recovery and amplify disruptions. Two immediate issues are the economic consequences of lockdowns and massive stimulus packages, and the only question is whether the correction will be severe or protracted.
1. Make Sure You Can Clearly See the Finish Line
The finish line is visibility, and to know what that means, you need to define supply chain visibility accurately. This keeps attention focused on the right things and gets your company to the finish line sooner.
You may find my other posts helpful for understanding visibility: learning about what to expect from a visibility solution, how to implement visibility, the risks involved, and a useful model for introducing visibility.
2. Take the Shortcut to the Finish Line
Focus on shipping and receiving processes.
Build visibility around shipment status (ANSI 214 or equivalent).
3. Define Risks and Resolutions at Every Step
Your project will progress much faster if a significant effort is invested in upfront analysis to define the process for resolving supply chain exceptions. Risks should be defined and quantified at every point in the workflow as follows:
Exceptions: a failure to meet expectations such as thresholds, status, metrics, KPIs, greenhouse emissions, or other criteria. Costs associated with each exception should be determined to measure the impact.
Risk factors: conditions that elevate the probability of an exception.
Scenarios: a collection of risk factors for given conditions. AI with predictive analytics plays a big role in identifying scenarios.
Resolutions: clearly defined outcomes and corrective actions necessary to optimize them, including alerts to subject matter experts and stakeholders. The cost of resolution should also be measured.
System interfaces: points in workflow monitored for risk factors. This includes interfaces for data ingestion and initiating corrective changes in execution and alerts.
4. Run on Risk Reduction
Introduce technology that can monitor business processes for risks and initiate the appropriate actions when they are detected. Your enterprise systems will run on the goal of reducing risk in one of three ways:
Detecting exceptions and initiating corrective action.
Predicting scenarios, risk factors, or exceptions and initiating preventative action.
Identifying process improvements to eliminate recurring scenarios and exceptions.
5. Finish with Process Improvements
Running on risk reduction leads to continuous improvements, identifying process improvement opportunities that push your company further ahead of competitors. Here are the areas in the supply chain your enterprise can concentrate on to facilitate process improvements:
Events - Events should not just tell the story of an SKU, order, or shipment- they should also report a measurable level of risk and provide actionable resolution.
Inventory - Your company should know who has custody of any product or components for warranty, recall, and service issues. The location of individual serialized SKUs by manufacturing date, location, lot number, and other valuable identifiers should be visible.
Shipments - This is the key. Without transportation, nothing moves in a supply chain, and shipments are the currency in a transportation-centric supply chain model. Every data element in an enterprise can ultimately link to one or more shipments, which makes it easier to find the location and status of any SKU.
You’ll want a systems analyst who brings a solid understanding of transportation logistics workflow and data collection on the shipper and carrier side of the business to guide you on this piece. Finding someone with this experience is difficult, but it can cut implementation time by several months.
Another way to accelerate progress is to use a supply chain visibility platform that’s strong in transportation. This makes it easier to acquire shipment status and delivery details from transportation carriers.
Finally, you’ll save a lot of time and money by using a dynamic routing engine that can integrate with your existing WMS / TMS. Correction actions can initiate changes in shipping execution to the routing engine. For example, carrier selection for outbound shipments can change to meet last-minute customer requests. Delivery routes for internal delivery trucks can update with changing traffic conditions change.
You can win the race to supply chain visibility if you follow the guidance given. If a fast-talking hare tells you there’s an easier way to supply chain visibility, just remember there’s a reason so many bright, capable people delayed for 30 years. And remember what Aesop taught us about being a tortoise. See you at the finish line.