With the advancements made in GPS-based real-time tracking of commercial transportation over the last several years, visibility has become a hot topic again. Today, we can know the location of our freight on an almost instant basis and even get accurate predictions of when it will arrive. Recently, I was with a large retail customer who is interested in adding this capability to the visibility solution that they successfully deployed years ago. I am pretty sure that they will be equally successful with the GPS-based real-time tracking because they already have the right business fundamentals in place for visibility solutions. Here are the following 5 principles they used to get the most from their visibility solution.
Source: DC Velocity/Descartes 2018 Transportation Management Benchmark Study
- Visibility is a service. A visibility solution gathers data from multiple sources and logically consolidates it for a community of users. These users have diverse requirements and the value of the visibility solution to them will be their ability to get the data from the solution in the format they need to make business decisions. So in effect, a visibility solution is a service to the user community. Many organizations fail to realize the value from their visibility solution because they try to standardize the reporting in an attempt to minimize the cost of maintaining the system. While reporting tools have improved, they are still not that easy to use for the typical end-user. Instead, the value of the solution is related to the unique use of the data by the community of users. This retailer employs resources that have created over 700 custom reports over the life of their system to drive business value. The effect has been to accelerate and spread adoption and to recognize the ROI from the solution not just when it was implemented, but increasingly over the time it.
- Share the data beyond the supply chain organization. You cannot estimate how many organizations can benefit from the information in a visibility solution. The data doesn’t have to cover the supply chain end-to-end to bring a lot of value. For example, this retailer’s single biggest user of the supply chain data is their merchants. They use the status of shipments to make buying decisions. If you really think about it, the merchants are the single biggest influencer in the retail supply chain because they have the “buy button”. In the case of this retailer, there were able to eliminate an entire yard of containers stacked 3 high because merchants knew the delivery status of their goods and didn’t over-buy to cover their former lack of visibility. There are other areas of the company, such as customer service, Sales and even Finance, that also benefit from a visibility solution. In many cases, the ROI they derive is much larger than what the supply chain organization receives. The key here is to enlist the non-supply chain organization and educate them on the value of the visibility solution.The same is true with providing carriers, especially LTL carriers, with the expected delivery dates for the purchase orders in the shipments they are delivering on behalf of suppliers. Many LTL carriers serve multiple suppliers for a given retailer and “trap” freight to minimize the number of deliveries and costs. The down-side to this approach is that one or more POs may inadvertently get delayed past its due date. By understanding the promised date, LTL carriers can make better decisions to consolidate customer shipments and still meet their individual delivery commitments.
- Determine the key milestones and what-if scenarios. The value of the visibility solution doesn’t come from the data in it. It comes from the decisions made with the data. Simple alerting and tracking are not enough. Establishing key milestones and knowing how the organization should act based upon the milestone reporting creates the business benefit. For example, this retailer has PO-to-dock-door delivery milestones. If they were able to determine, through these milestones that a delivery would not make the anticipated Monday time, they would contact the carrier to delay it for a week because the goods on it would miss the consolidation window and the trailer would just add to DC congestion. A visibility solution can trigger many supply chain and other key business process actions instead of just being a big data repository.
- Leverage internal and external data sources. There are many sources of data that can provide significant insight and should be included in a visibility implementation. For example, dock appointment booking. Many organizations get great value from dock appointment booking to control the flow of vehicles in an out of their distribution centers. However, it is also a critical decision point for the deployment of inbound goods. Because there is a very high degree of accuracy that deliveries will arrive in the scheduled windows, tying a booking appointment to the purchase orders in the truck allows inventory planners to pre-deploy the goods before they arrive at the DC. This approach can reduce cycle time and inventory held at the DC.One of the mistakes made implementing a visibility solution is that ALL the data sources need to be defined upfront. For many organizations it is not possible or practical as visibility is really learning process. As organizations begin to operate a visibility system they learn were the data source holes exist and what might be the best data source to fill them. Clearly, there is need for a visibility process owner and continuous evaluation of the extent to which the solution is providing a full view to of entire supply chain process.
- Measure and enforce data quality. None of the great strategies mentioned above happen without good data. So what is good data? Good data is accurate AND timely. The two are essential as accurate data that doesn’t come in time means that critical decisions must be delayed which impacts supply chain performance. You would think that this problem has or will be solved with all the latest technologies like APIs and blockchain, but there is no “silver bullet”. Trading partners (i.e. suppliers, carriers. LSPs, and brokers) all have systems with various integration capabilities. This retailer measures the quality of the data delivered by its trading partners to ensure that they can reliably operate their business. They have even written compliance policies into trading partner contracts to help enforce data quality.
Advances in visibility technology have brought it back to the forefront of today’s fast-moving supply chains. To take full advantage of these new capabilities, supply chain executives need to view their visibility solution as an evolving service and focus on how they will use this information to run their operations better and determine who beyond the supply chain organization can also benefit from this insight. Companies who understand these strategies really do end up with a visibility solution that truly provides long-term value to the overall business and not just the supply chain. How is your organization using visibility to impact performance? Let me know.
As Executive Vice President, Marketing and Services, Chris Jones (CJones@descartes.com) is primarily responsible for Descartes marketing activities and implementation of Descartes’ solutions. Chris has over 30 years of experience in the supply chain market, including the last 10 years as a part of the Descartes leadership team. Prior to Descartes, he has held a variety of senior management positions in other organizations including: Senior Vice President at The Aberdeen Group’s Value Chain Research division, Executive Vice President of Marketing and Corporate Development for SynQuest and Vice President and Research Director for Enterprise Resource Planning Solutions at The Gartner Group and Associate Director Operations & Technology for Kraft Foods.
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