Visibility, at the most basic level, means the ability to see enough to be able to make decisions. For upper management, visibility means having enough information to be able to make strategic decisions regarding risk management, cost control, supplier management, competitiveness while being confident in the company’s ability to adjust quickly to unplanned events. For middle management, visibility means high quality information that flows early enough to be able to react to events, make tactical decisions, have time to activate contingency plans, and minimize the potential of escalating downstream costs while maximizing customer satisfaction.
Much publicized technologies are changing the way that businesses look at control and information flow. Speedy consumer adoption of technologies changes the framework that businesses operate in – bringing new sets of choices. Migration to mobile devices, massive amounts of computing power being available at low cost, the ability to quickly assimilate data from many sources, BYOD (bring your own device) are challenging companies’ views, and bring new sets of possibilities. New ways of dealing with supply chain risk – understanding it, quantifying it and anticipating it – are coming to light. Two are particularly interesting.
The big data approach aggregates data from public and private sources in order to provide views into broad and narrow supply chain risk. Broad risks include geopolitical ones, the impact of fuel and other macro factors; narrow risks include risk of individual suppliers having lawsuits or cash flow issues. Data is gathered on systemic factors such as political events, wage rate fluctuations and fuel costs, and within industry sectors across multiple OEMs and whole supplier bases. Supplier data focuses on supplier “exit” data – comparisons of shipments against planned dates, logistics components, etc. Aggregation of data from these disparate sources gives executives the ability to look at both their own supply network and compare across their sector. Broader samples can yield better insight into patterns which extend beyond a narrower in-network view, and provide the ability to assess geographic or other macro factors and develop various strategies.
This approach can be both backward looking and forward looking. Backward looking in the sense that the data is fed from many companies’ data, with the associated potential time and confidentiality lags. Forward looking in the sense that a greater pool of data can be extrapolated more readily, and with propensity for both greater accuracy and insight into more options. An important caveat on forward projection is, of course, the one from the stock market: “buyer beware.” Past events are not necessarily a good predictor of the future!
But in a key way this approach is not a reader of “now.” Visibility into each stage of the supply chain is only as good as the product entering the visible stages. For data aggregation purposes, being able to retrieve the results of completed POs may be sufficient. For those responsible for fulfilling today’s needs, data flow from further upstream in the supply chain is needed: the timing and quality of milestones within the supplier, or from within their suppliers. For strategic purposes, the breakdown of within-production or within supplier milestones may yield the deepest clarity of supply chain challenges. Surveys have shown that sub-supplier performance has a significant impact on tier 1 suppliers, and on the success of meeting your customers’ needs.
This brings us to the second tool, also built on emerging technologies. Tablet computers are moving quickly into industrial usage, due to their high processing powers, portability and ability to gather objective data right at the source. Within supply chains, the ability exists to move the wall of visibility from the supplier’s door to inside the walls: alongside the production line, by the assembly cells, within packaging. Measuring the results of discrete production events allows visibility into those steps which are not occurring in a timely fashion, or not producing the required level of quality. Use of standard tablet features such as cameras gives direct, documented visibility into incorrect results; direct “connectability” to machinery and measuring devices coordinates data into decision-ready information in real time, within a structured information flow.
Supply chain designers suggest that supply chains need to be monitored daily, at a minimum, for continuous optimization and the ability to respond quickly to events. Being able to monitor, in real time, creates the ability to respond to events at the earliest stages. This reduces two significant costs in the supply chain: expedited freight to accommodate interruptions, and just-in-case levels of inventory, held to minimize the impact of supply chain disruption.
With today’s instant communicability and data flow through the cloud, an in-production action step in, say, an Asian factory updates supply chain dashboard tools in the U.S. within seconds. Both supply chain owner and supplier benefit – together and separately – from the ability to immediately identify anomalies: total costs of correction are lowest at the point of occurrence: both benefit from minimized schedule impact and both benefit from minimizing claims management.
These two new technology-based approaches bring benefits to operators of today’s complex supply chains, whether used individually or in tandem. The “big data” approach contributes to tactical and strategic decisions on supplier management, using data from many sources. Real-time data flow from tablet-based cloud platforms offers analytics from deep inside the supply chain while bringing the ability to react to unforeseen events in a timely fashion. Both offer the ability to heighten understanding and control of the supply chain.
Keywords: supply chain visibility, supply chain management, supply chain IT, supply chain solutions, supply chain risk management, business intelligence, Big Data