Do you want visibility or transparency? Polly Mitchell-Guthrie, posed that provocative question to supply chain professionals on her LinkedIn feed. Ms. Mitchell-Guthrie is the VP of Industry Outreach and Thought Leadership at Kinaxis. Kinaxis is a top supplier of supply chain planning software.

She went on to say, “visibility is widely considered a new supply chain imperative. But visibility means different things to different people. Do you want to know who your tier 2, 3, and 4 suppliers are? Or are you asking where your truck is? Or the impact of a tier 3 supplier delay on the part you need getting on a truck to your plant in time for you to meet the production schedule so you can deliver on time in full to meet your customer’s newest requirements?”

“Different vendors mean different things when they use the same term. It reminds me of what I like to say about descriptive analytics and the dashboards people love. Mere visibility might just help you ‘admire’ a problem – ‘gee, those parts are going to be late.’ You need full transparency to be able to understand the impact of that delay across your supply chain, so you can decide what to do about it. It’s not enough to see, you have to be able to understand the impact. And have the AGILITY to be able to respond quickly.”

Let’s dig into these concepts. There are two dimensions to visibility: breadth and time. On the time dimension spectrum we move from visibility to bad things that happened at some point in the last few days or weeks, to real-time alerts, to the best situation where predictive alerts tell you something bad will happen unless you do something.

On the breadth dimension, we have a spectrum that includes point solutions out to alerts over a much broader range of events. One example is an alert that a truck will be late based on a GPS feed. Four Kites and Descartes are examples of software companies whose solution provides this type of alert. These are real-time alerts but these suppliers are working to make an increasing percentage of the alerts predictive.

The pandemic has raised the attention that risk notification and visualization solutions are getting. Suppliers here include riskmethods and Resilinc.   These solutions have a graphical view of a company’s supply chain across multiple supplier tiers. If a supplier’s continued material flow becomes questionable for a wide range of reasons, the way that supplier’s components flow to various factories and nodes in the supply chain is graphically illustrated and the appropriate commodity managers are automatically notified. These real-time solutions work by continuously monitoring a wide variety of risks, identified based on monitoring hundreds of thousand online and social media sources, and then elevating risks in heat bubble maps.

There are supply chain visibility solutions for Risk, Source, Make, Deliver, and Returns/Recalls. To work effectively, these solutions often must be network-based solutions. This class of software is known as Supply Chain Collaboration Network solutions. There are point solutions in each area, but Infor – with their Nexus network – and E2open, have broad supply chain visibility solutions that cross most of the supply chain silos – Source, Make, etc. – mentioned above.  Many Supply Chain Collaboration Network (SCCN) solutions generate visibility based upon EDI, which is not real-time.  EDI messages that a shipment will be late, for example, not uncommonly arrive after the shipment has already arrived. But there is a trend for SCCN solution suppliers to provide both broader solutions, and have more alerts based upon real-time feeds or even be predictive. For the most part, providers are still early in this journey to predictive alerting.

Then there is the question of what you can do with that visibility. Is it just a situation where you get bad news and your day has been ruined because there is nothing you can do? Or do you have applications and a playbook that allow you to mitigate, or even better, solve the problem?

In some cases, a point application – like a warehouse management system – will provide an alert and the solution can be executed in that application. A warehouse management system solution from a supplier like Manhattan Associates, HighJump (now Körber), or Blue Yonder have dashboards that indicate whether order selection is proceeding on schedule and whether it is likely that the day’s orders can be picked on time. If things are not going to plan, a manager might make some calls and see if he can get some more employees to come in and work.

But there are many alert situations where the impact is broader, and the necessary mitigation needs to include several departments or even supply chain partners. In those situations, supply chain planning solutions with concurrent planning capabilities are often the proper solution. While some SCCN solutions will argue that SCCN allows a company to “orchestrate” the proper response, a company really wants an “optimal” solution. An optimal solution is based on understanding the supply chain constraints across the end-to-end supply chain and then applying sophisticated math navigate those constraints in a way that maximizes service at the lowest total cost. Suppliers of concurrent planning include Blue Yonder, Kinaxis, Sovoyo, and others.

In short, companies need the right kind of visibility, they need to understand what they will do with that visibility, and then they need to be able to effectively execute the mitigation playbook. This set of capabilities is beginning to be called “Sales & Operations Execution.”

Supply chain control towers have come of age. The concepts that allow modern control towers to support agility are easy to describe. The technology that empowers these concepts are quite complex.

Simple Technology Concepts are at the Heart of Supply Chain Agility

To support supply chain agility a control tower needs to do the following:

• Provide near real-time visibility to inventory, shipments, and risks.
• Provide support for concurrent planning. Organizations have different plans for supply and demand planning. They have different types of plans for long range, intermediate, and near-term planning. With concurrent planning, these plans are connected. A change in manufacturing scheduling, for example, ripples up to the integrated business plan. Changes in short-term demand forecasts get highlighted in the supply plans.
• The system needs to be intuitive. Let’s take the example of a “hot load.” The trick is to identify what is “news” and what is “noise.” Perhaps a truck is late, but it contains product where a company has plenty of stock. On the other hand, an ocean container might come in early but contain products that are in a low stock position. So, the system needs to tell users which to receive first.
• Supply chain applications need to make more accurate forecasts. Downstream data increases forecasting accuracy, particularly for near-term forecasts. Forecasting accuracy and estimated times of arrivals are improved when machine learning technologies are applied.
• The systems need to be easy to use so that planners can easily run scenarios to understand how best to mitigate exception situations.
• The solutions need to support internal and external collaboration, playbooks, and war rooms. Not all problems can be solved using math. Collaboration with diverse stakeholders is often necessary. If certain types of exceptions occur on a regular basis, a playbook can be built to help automate these recurring problems.

Technology Needs to be Complex So that Solutions Can Be Simple

I am not going to go through each of those bullet items and describe the complexity. That would be over kill. But I will describe the complexity around just one of these areas – getting near real-time visibility to shipments, inventory, and risks.

The ability to support better visibility is based on using application programming interfaces (APIs) rather than relying on EDI, emails, portals, and phone calls. Because many large companies use many different business and supply chain applications across different business units and regions, the integration problem is significant. Companies may need to use data lakes and technologies that help to harmonize the data from the different applications.

A data lake consumes all the critical data from the different applications. Significant work is required to generate a harmonized data layer. The critical master data for supply chain management includes objects like sales orders, shipments, inventory, and lanes. Different business systems can define all the fields associated with these forms of master data differently. When implementing this, a company needs to ask their business users what data points they needed for each of these master data objects. It does not matter what various business systems, like SAP, thinks a “purchase order” is. A harmonized definition of “purchase order” is crated based on what is needed to support the control tower.

Then these objects need to work together to create a time phased view into what inventory will be available at what locations. To understand the current inventory position, a company takes their initial stock position and then calculates how that inventory position is changed by things like quality inspections, purchase orders, production orders, and intercompany demand.

The improved visibility to shipments was based on federal regulations requiring truckers to electronically track their hours of service. Suppliers like FourKites or Descartes MacroPoint provide near real-time  visibility based on API integration to truck carriers’ GPS enabled electronic logging devices or by getting small carriers to agree to use smart phone applications that support tracking.

The solutions that provide real-time visibility to supply chain risks are fascinating. These solutions work by continuously monitoring a wide variety of risks, identified based on monitoring hundreds of thousand online and social media sources, and then linking those risks to a map they have created of their customer’s end-to-end multitier supply chain.

Conclusion

The other things supporting agility – concurrency, intelligent alerts, the use of downstream data, and so forth – all have their own complexities. But the basic point is this, we have dreamed about having robust supply chain control towers that can provide control that is analogous to what airport control towers or war rooms provide. Until the last few years, the technology did not support this. But finally, the technology has caught up to the vision. Companies are using these solutions to great effect. The early adopters have been rewarded with a greatly enhanced ability to respond intelligently to the COVID-19 Pandemic.