In the past five to 10 years, real-time information has become a key value-added proposition for bolstering efficiency and decreasing waste in modern, digital supply chains. Businesses have used it to power more agile, responsive processes within their own value streams, creating environments that are primed for improved data-quality and easier analytics integration. The question remains, however, is this technology being utilized to its maximum effect, or are there still use-cases for real-time information that most businesses are failing to fully leverage? The answer is resoundingly the latter, as evidenced by these four surprising uses for real-time supply chain data.
Think about some of the biggest supply chain risks for a moment: unexpected weather events or natural disasters; price fluctuation for oil or other transport factors; inaccurate forecasts—all things that require an immediate response in order to prevent complete supply chain shutdowns. Now, think about most sales & operations planning (S&OP) workflows: focused on mid-term, quarterly or yearly cycles; designed to support longer-term goals like new product launches—quite simply, the opposite of immediate. Of course, S&OP is crucial to shaping a business’ mid-term strategy, but when disruptions hit there’s rarely time to wait for the next quarterly planning meeting in order to respond. As a result, without a secondary workflow to cover the weekly or monthly planning timeframe, the inherent risks in longer-term planning processes are significantly amplified.
Let’s say you and a coworker are attempting to find areas of waste in your supply chain. You have a large conference table on which you’ve laid a file that contains all of the transport plans utilized by the company for the past few years. When your coworker hypothesizes that a different grouping of goods would improve fuel efficiency, you need new documents with additional information, meaning that you have to leave the conference room and descend to the basement level where the files are kept. By the time you’ve returned, a new idea has occurred to your coworker, and you have to make a new trip to wherever your files are stored in order to retrieve the necessary information. The result of all this walking to and from the files? Some good cardio, but no plan to speak of.
Imagine for a moment that you’re planning to do some small renovations to expand your house. They’re straightforward enough that you can do all of the work yourself, but since you have a day job, you can only do the work at night. What’s the first thing you buy? If you answered floodlights, flashlights, or any other light-emitting piece of equipment, then you have the right mentality for success in the modern supply chain. After all, doing work on a house that you can’t see can be dangerous and inefficient. In the same way, trying to grow your business in spite of low visibility can prove not just difficult, but risky. To prove it, here are five way that end-to-end (E2E) supply chain visibility plays an important role in building a smarter, more efficient business.
In order to remain competitive in the world of modern manufacturing, production planners are constantly searching for new ways to derive more value from their operations. This impulse takes many forms, but one of the most common is striving to improve operational capacities, usually by either reducing makespan or improving machine utilization. Though the obvious benefits of increasing your throughput may seem tantalizing, the process of actually doing so is not as simple as ratcheting up production speed or buying new machines. Rather, it is a complex process that requires a high degree of visibility into your value stream. To help you tackle these complexities, here are 5 key strategies for improving operational capacities.
There’s no denying it: the pace of the global supply chain is getting quicker every day. Broad increases in connectivity have led to equally broad increases in customer expectations, meaning that when things inevitably diverge from expectations, it’s imperative that supply chain managers react swiftly and decisively. This growing need for lightning fast response times comes with increased pressure to build a value stream that is visible and connected enough to provide planners with the information that they need about existing operational plans and potential plan b’s—including inventory levels, transport routing information, and delivery requirements.
Imagine for a second that you’re an NFL quarterback: you have a plan to throw a forward pass to one of your wide receivers, to whom you’ve dictated a specific pass route. Unfortunately, you’ve neglected to inform any of your other teammates of what you plan to do. Even worse, you haven’t bothered to ask any of your fellow players if they have plans of their own and, if so, how they might conflict with the plan you’ve devised. As a result, when something goes awry, none of your teammates are able to make adjustments on the fly, and your plan has no way of overcoming whatever hurdles crop up.
Imagine you’re a trader on the floor of the New York Stock Exchange. Every morning, you check the prices of the stocks that you’re interested in, and you act on those numbers, not checking them again until the end of the day. Your competition, on the other hand, is using real-time information to inform their trading decisions. Which technique seems more likely to yield a profitable trading strategy? Your knee-jerk reaction is probably that you’re going to lose money virtually every day, because your competition has a more accurate picture of the real financial landscape while you’re using information that’s obsolete virtually as soon as you set foot on the trading floor.
It’s long been an open question in the world of business: which is a bigger hurdle, planning or execution? As the global supply chain has become more sophisticated, however, we’ve gotten a wealth of evidence that for the majority of companies, execution is the more frequent stumbling block. In an informal poll a few years ago, Dick Ruhe at Blanchard found that 76% of the more than 300 respondents said that the most common experience at their company was "good planning and poor execution" (compared to just 4% who said "good planning and good execution", 8% who said "bad planning and bad execution", and 13% who said "bad planning and good execution"). Though these statistics don’t speak to supply chain management in particular, they do give an accurate sense of how difficult it can be to put even a well-conceived business or production plan into action.
Industry 4.0 is already radically changing the global manufacturing landscape; so much so that Deloitte estimated that as many as half of the S&P 500 firms would be replaced by 2027 due to digital disruptions. Prognostications like this lend a sense of urgency to discussions of the adoption of Industry 4.0 principals like interoperability and cyber-physical integration. What many forget, however, is that it’s not technology alone that determines a company’s long-term staying power. Rather, it’s the customers who ultimately determine the success or failure of a given business.