Architecting the Ideal Supply Chain: It’s a Journey

4/15/2020

By Bill Read

Transforming a traditional supply chain into a data-driven asset doesn’t happen overnight; it’s a journey that involves planning, assembling a talented team, gaining support throughout the organization, and putting together a smart combination of AI and analytics to help you make sense of it all. Fortunately, there are platforms out there that can help make your journey a rewarding and successful one.

To get started in your supply chain transformation journey, keep the following key aspects in mind.

Architecting the Ideal Supply Chain

Start with the customer: what are their demands for your product or service, and what are your organization’s performance requirements in terms of meeting those expectations? Your customers’ needs will inform and guide the definition of your company’s value proposition, as well as how those products and services should be created and delivered. During this initial part of your journey, you’ll need to work closely with your suppliers and partners who manufacture and deliver those products to your customers. Or you may find that the best way forward is to produce your products on your own, which involves establishing manufacturing and distribution operations. Either way, you’ll need to work with your partners, understand their capabilities, and define what kind of people assets as well as technology capabilities that you’ll need to put in place up and down the supply chain.

In order to accurately define all these elements, you’ll need to determine what is happening along your supply chain at every step along the way. Traditionally, companies would accomplish this via a periodic “snapshot” by looking at their various transaction systems or leveraging periodic feeds from their trading partners. More recently, some additional feeds of location by transport vehicle have helped.  Fortunately, there are supply chain visibility platforms on the market that can provide even more detailed information about actual product-level location and condition as it moves through your supply chain, so you can track your products in real time, at every node along the way. Want to know whether the temperature or humidity of a particular package is out of line or whether a sudden drop of the product has resulted in vibration that could damage a product?  This product-level information is now available and as a result the ideal supply chain architecture you put in place can be affected and improved.

Converting Your Existing Architecture to a Supply Chain Visibility Platform

“The best strategy is to find a platform this is agnostic in terms of integrating with traditional supply chain capabilities such as RFID technology as well as the variety of newer edge technologies that capture data.”

Every company has some sort of supply chain infrastructure in place, with capabilities that may be acceptable or quite dated. The important step here is to survey your current operation, determine what can be leveraged, and what types of data you can to feed into a supply chain visibility platform. The best strategy is to find a platform this is agnostic in terms of integrating with traditional supply chain capabilities such as RFID technology as well as the variety of newer edge technologies that capture data. And, it’s important to note that supply chain visibility platforms should take advantage of any variety of IoT sensor data, whether inside facilities or in transit.

Putting Together a Dream Team

If you’re ready to adopt a new supply chain visibility platform, you’ll want to put together a “dream team” of sorts. There are four key roles that are the cornerstone of any supply chain team:

Operations: The operations manager would be the head of a particular business area, whether it is logistics, manufacturing, etc.

Finance: In this role, the financial manager would be involved in defining the value case of what is being projected as the financial return of the project, as well as developing a way to monitor the project over time in order to gauge financial return.

Technology: The team leaders in this group will play a pivotal role in designing what the technical journey looks like as well as orchestrating the talent, both in-house and with outside partners.  They also will ensure that their technical blueprint is consistent with corporate standards.

If you’re a senior executive and want to gain an overall understanding of your supply chain visibility project, it’s important to ask the following questions of your supply chain leaders:

  1. How is the supply chain operation going to help enable our growth by leveraging the visibility solution?
  2. What are the two to three locations or lanes in the supply chain that we will “light up” now and then how will this expand to greater coverage over the next 24 months to help our company?
  3.  What are the greatest risks in our supply chain that we face from external threats and disruptions to operations where a visibility platform can mitigate?

You’ve Got Data. Now What?

Once your supply chain visibility platform is established, you’ll need to have an analytics plan in place. The analytics capability is crucial, so that you can process all of the data and transform that data into real-time guidance for management. Predictive analytical capabilities will help you understand whether the data you’re looking at is an aberration, a reflection of something that’s currently going on, or a pattern of information that could be used for predictions.

In addition, you’ll need to put in place associated work rules. For example, if “x” happens, then a “y” decision would be made, or a “z” direction would have to occur. If you have AI analytics in place, it will help you with getting a lot of those types of work rules automated.

Final Thoughts

“Think of your supply chain transformation project to increase your visibility by 5X or 10X as a journey, but be sure to give it a timeframe.”

Always focus on the customer.  Understand what their perspective is, what their needs are, and what their business conditions are. You need to be very responsive and be able to dynamically manage your assets and capabilities to respond to what those customer needs are. At the same time, you need to accomplish that in a fiscally responsible manner so that you have a positive impact on P&L performance.

Think beyond just your company. The power of supply chain visibility is being able to think beyond your company and consider cross-enterprise capabilities, such as leveraging what suppliers can do, leveraging their R&D, integrating with your manufacturing processes, and then connecting with customers. You can leverage much more value in your supply chain when you have that kind of perspective versus just thinking about what’s happening within the four walls of your business. Having visibility of product condition and movement in that extended enterprise is critical.

The process of driving supply chain transformation across a global enterprise is a journey. Think of your supply chain transformation project to increase your visibility by 5X or 10X as a journey, but be sure to give it a timeframe. 12-36 months is a reasonable timeframe if you’re trying to adopt change across a global enterprise.

Reach out to Cloudleaf to learn more about how you can transform your supply chain into a data-driven strategic asset.

About the Author

Bill Read brings deep expertise in supply chain and key products manufacturing and retail industries from leadership roles at Accenture and Capgemini. He also leads Cloudleaf’s Board of Advisors.