For well over a decade we’ve talked about how supply chain visibility will help minimize the impact of disruptions, decrease order cycle times and risk, and improve service levels. Yet, after all these years, why are people still talking about supply chain visibility like it’s in the future?
About now you may be thinking you’ve had visibility within the four walls of your DC for years via your warehouse management system (WMS). If you have multiple DCs running the same WMS, you probably have visibility across those as well. But if you have multiple warehouse management systems, often through acquisitions or decentralization strategies, or if you have smaller warehouses and storage facilities that are not automated, your visibility may be severely restricted.
What happens when you go outside your organization to suppliers, co-packers, contract manufacturers, 3PLs, distributors and other partners? Chances are visibility across this environment is slim to none. Why is that exactly? It’s not the technology—system-to-system data sharing has been around for decades. It’s just that people don’t want to share. We’re afraid our partners won’t keep our data secure, or that they might use it somehow to take advantage of us. But the fact is supply chain leaders have been exposing their data to partners for years through networks such as Walmart’s Retail Link. The demand-driven, hyper-competitive global marketplace is forcing companies to collaborate to meet customers’ heightened demands for lower costs and faster, more personalized service. Accomplishing it requires cooperation and collaboration between all members of the value chain, and that means sharing data.
One solution is the much-hyped, under-utilized cloud, with a new class of collaboration applications that allow trading partners to share information about orders, inventory, and shipments over secure private networks, similar to how information has been shared internally for years, but with tighter control over security.
For instance, a typical CPG company with multiple plants, suppliers, and co-packers is likely receiving raw materials from many suppliers for use in their plants, as well as for use by contract manufacturers that make some of their products. For traceability and potential recall purposes, they have to track these raw materials across their network, and the finished goods these materials went into. They also need to know when and from which suppliers and plants all the finished goods are coming from in order to plan customer order fulfillment. As you can see, gaining visibility to materials and goods across this network is a major challenge.
Now let’s move this scenario to the cloud. What if all of this CPG company’s raw materials and finished goods suppliers, contract manufacturers, co-packers and other partners could easily enter inventory information through a private cloud portal hosted by the company or a third-party hosting service? Suddenly, all the information the CPG company needs for traceability and fulfillment is at their fingertips. Built-in tools would handle the translation and integration of transactions in various formats from the network partners so the IT stumbling block is removed. Other tools would allow the company to assign security and access to information based on partner and user roles. Tools might also provide capabilities for placing orders, arranging shipments and processing billing.
With this type of collaborative cloud capability, visibility is no longer invisible. The CPG company has immediate visibility to all of the information it needs to compete more efficiently and effectively, as well as the traceability required for compliance or recalls. And suppliers become more efficient and better partners. Just think, maybe all of that talk about the benefits of supply chain visibility will finally come true!
Jim LeTart has over 30 years of sales and marketing experience in the systems technology field. He has spoken at numerous national and regional trade events and his work has been published in many industry publications. For the past 11+ years Jim has been Director of Marketing for RedPrairie, where he has responsibility for industry marketing, analyst relations and association partnerships. Jim has an Industrial Engineering degree from Marquette University and an MBA from the University of Michigan.