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Understanding Your Supply Chain is More Important Than Ever

4/2/2020

By David Parker

There’s no question that managing supply chains in 2020 is a challenge. A myriad of geopolitical, economic, health, environmental and technological trends continue to impact global supply chains. In the wake of the coronavirus pandemic, economic volatility, political instability, climate change, and manufacturing/supplier vulnerabilities, it’s more important than ever to have a keen understanding of your entire supply chain.

Obviously, speed and agility are the keys to staying resilient and competitive. But in order to react quickly, it’s paramount to have complete visibility into your supply chain, and that includes visibility into numerous “black holes” such as product loading/unloading times, delivery truck data, and warehouse wait times, not to mention traffic, customer behavior, inventory shortages, temporary manufacturing facility closures, weather, and many other factors.

The Case for Supply Chain Visibility

With companies around the world now trying to ascertain how destructive the coronavirus and market volatility will be to their operations, supply chain transparency is obviously top-of-mind. Alexis Bateman, research scientist and Director of MIT Sustainable Supply Chains, notes in a recent MIT Sloan article that there are two main elements to supply chain transparency.

  1. Visibility: Being able to both identify and collect data from all links in your supply chain.
  2. Disclosure: Communicating that information, both internally and externally, at the level of detail that’s required.

What kind of data you want, and the level of detail you need depends on the business you’re in. Transparency and tracking in the pharmaceutical supply chain has never been in greater demand. According to the World Health Organization (WHO), Parenteral Drug Association (PDA) and other industry estimates, 25% of vaccines are shipped incorrectly and reach their destination damaged.

End-to-end supply chain visibility is also indispensable in times of crisis; both product and location information can be shared in real time, allowing global trading partners to identify products that are delayed or lost.

Three Key Aspects of Supply Chain Visibility

When planning your supply chain transformation, you should keep in mind these three aspects of visibility:

1) Visibility scope: According to Bateman in a recent SupplyChainBrain article, it’s important to identify what you mean by visibility. In many organizations, visibility just means being able to track product movement, starting with shipment from the warehouse, information on nodes it’s passing on the way to delivery, all the way to its final destination. Another way to look at it is from an end-to-end perspective, which means tracking the product from the supplier, on to the manufacturer, and finally, to the buyer. Bateman states that a third interpretation is tracking the full supply-chain visibility beyond Tier 1 suppliers – starting from the product’s raw material all the way to its end of life.

By first defining the scope of visibility that you require, you’ll have a better idea of the level of data you need, how sophisticated your technology solution(s) need to be, and how much collaboration is needed to execute your vision.

2) Components vs. platform: Some companies try to improve supply chain visibility by using a mix of different solutions that work together to varying degrees of success. Modern solutions take more of a holistic platform approach using modern technology that includes cloud computing, AI/ML and IOT.  This approach creates a platform architected to work with both today’s and tomorrow’s infrastructure, providing future-proof capabilities.

For example, the Cloudleaf Digital Visibility Platform is a single, powerful platform that provides you with continuous, real-time views and insights across your entire supply chain, so you can increase revenues, reduce material and asset losses, and enhance the reliability of your operations.

3) Asking the right questions: It’s not enough to say that you simply want to know more about how your product flows through your supply chain. You’ll need to answer questions such as, “What’s my supplier risk? Do I have a lot of variability in my inventory? Do I have delivery issues? What’s the environmental/political/social impact on my supply chain?”

Unique Features of Supply Chain Visibility

Most companies only have about 20% visibility into their supply chain; making incremental improvement towards 100% visibility can have a significant impact on your business.  To address these challenges, organizations are adopting a visibility platform approach that is easy to deploy and that can deliver complete, real-time views across their entire ecosystem. One biotech company recently adopted such a platform to accurately monitor location, dwell times, condition and history; the company was able to dramatically reduce re-testing, spoilage and waste, saving the company millions of dollars. With real-time visibility throughout your end-to-end supply chain, you can:

  • Eliminate supply chain blind spots
  • Enhance the efficiency of end-to-end business processes
  • Address customer requirements and respond to customers quicker
  • Improve the efficiency of both logistics and transportation
  • Lower operational and working capital costs
  • Manage stock more efficiently and eliminate waste
  • Monitor and measure business metrics instantly
  • Connect and communicate with stakeholders seamlessly

You’ve Got Visibility Gaps: Now What?

Increased communication as a result of supply chain visibility will help you to see where gaps exist in your system. Let’s say you’ve analyzed your entire supply chain and have discovered several gaps in visibility. The good news is that you can leverage these discoveries to help you identify areas that you want to invest in.

Possible solutions to close visibility gaps
  • Continuous, live monitoring throughout your manufacturing facility
  • Complete tracking of your product as it flows through your distribution center
  • Live tracking of your products’ condition at the pallet level, as your products move in-transit
  • Continual status of your products and their conditions, starting with your suppliers and continuing all the way through to customer destinations

It requires a lot more than merely relying on EDI transmissions, RFID, and barcode technology to identify these blind spots and gain true visibility into your supply chain. Few solutions are engineered from the ground-up to solve business challenges and uncover opportunities in a sustainable, value-added way. Fortunately, recent technology advances make digital twins a viable tool to help you identify where all your critical materials are at every step and stage. These modern solutions provide continuous, real-time visibility and intelligence for the supply chain.

Once you’ve identified the blind spots, you need to understand the five stages of supply chain visibility. Gartner has identified five stages of supply chain maturity; these stages have several direct impacts on the visibility maturity of your company.

It’s important to remember that the ultimate goal of supply chain visibility is to strengthen the supply chain by making data readily available to all stakeholders to make timely decisions. Gaining end-to-end visibility into your supply chain is a key component of any successful digital transformation; it can transform your company’s ability to respond to changes in both your company and in the marketplace in real time.