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Supply-chain visibility is just the first step in the journey toward enabling a digital supply chain, says David McCarty, vice president of customer solutions with TransVoyant.
SCB: Why is supply-chain visibility so important?
McCarty: Visibility is important because of that old adage, "You can't measure what you can't see." Clearly you need to have visibility to your supply chain — where a truck may be located, where a ship is on the ocean. But having visibility is just the start, because you also need to better understand the behavior of what's going on within the supply chain. It's not just enough to know where a ship is. You want to know, when is it going to arrive? Is it going to be late? Same thing with a truck. You need that information to drive better results, and help you improve what's going on.
SCB: What are some major obstacles that companies face as they attempt to achieve supply-chain visibility?
McCarty: A lot of times people get fixated on the technology and the “shiny object syndrome.” But what you really need is good, clean data. The saying "garbage in, garbage out" is especially true today, as we look at machine learning and artificial intelligence. What’s often a challenge is that a company's internal data about the supply chain, its manufacturing facilities and the like, isn’t clean.
When it comes to driving visibility across the entire supply chain, it's not just the client's own data that's required. It's their whole ecosystem — data from their carriers and customers. Integrating that data in a meaningful way can be very, very difficult. In addition, there are external inputs to consider, such as weather and port behavior. You need to bring all of that in.
SCB: How do you get started?
McCarty: Often companies will start with a pilot. Typically it will involve a trading partner that has cleaner data, and maybe pretty good source systems. You connect to them through APIs, and everything's humming along fine, and now you want to scale it. Well, now you have that long tail, the 80/20 rule. Maybe there are local carriers and smaller operators that don’t have the technology.
SCB: If you start out with a carrier that's reliable and has the data, it kind of lulls you into thinking that, "Well, this isn't so hard."
McCarty: It's like an iceberg. There's the tip you see, and then there's this huge mass underneath that you have to deal with. That's one of the biggest challenges out there — how to deal with the data at scale for your entire supply chain. You need to integrate three types of data: from the enterprise, your ecosystem and external sources.
SCB: What’s the relationship of supply-chain visibility to the digital supply chain? And what’s the importance of the digital supply chain in gaining this visibility?
McCarty: Without data, there is no artificial intelligence. If you’re embarking on the journey to a digital supply chain, the creation of a “digital twin” of your operations, you need visibility. It’s the foundation of digital transformation. And if you don't get it right, it's going to be very, very difficult to synchronize and optimize your supply chain.
There’s also the challenge of granularity. It’s one thing to know where a truck is, but it's probably more important to know which products are on that truck — how many SKUs and cases. That level of detail can be very challenging for some companies to achieve.
SCB: You’re also concerned about the quality of the transportation, the temperature inside the container or trailer.
McCarty: Absolutely. The internet of things is driving enormous volumes of data that provides visibility and new angles.
SCB: Would it be your argument that we cannot achieve supply-chain visibility without digitalization of the supply chain — that we can’t do it manually, with spreadsheets?
McCarty: That's absolutely right. It gets back to that digital twin — the digital representation of your physical supply chain. That provides visibility from end to end.
SCB: What about best practices? What are some leading companies doing right now in the area of supply-chain visibility?
McCarty: For starters, they’re trying to tackle this data problem. They're looking for data platforms that can be applied not just to their bigger clients or customers. Also, some companies are applying machine learning to the ingestion of data, so that they can automate the cleansing and harmonization of that information. It's all about augmenting the actions that humans take.
Other companies are focusing on better exception management and alerts, because there's so much information out there. We're drowning in a sea of data. Being able to use the technology to prioritize actions and risks is what a lot of leading companies are focused on.
SCB: Exception reporting seems especially important, because you don't want to know where something is every single second of its transit. You just need to know if something is awry, or if it's passing a certain checkpoint.
McCarty: Exactly. A good analogy in our day-to-day lives is our navigation systems. In the olden days, you'd look at a map and compare it to a mile marker on the road. That was visibility. It got better when we started getting navigation systems in our cars and Google Maps, telling us when we were going to arrive.
But the best answer is something like Waze, which is taking in all this other data and informing you that there's a traffic jam up ahead. You’re going to be late — what action do you want to take? Being able to have visibility so you can take corrective action is really, really important.
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