Supply chain visibility is a critical function of any modern (and competitively advantageous) supply chain. However, the term itself leads many leaders to focus just on the capture and display of supply chain data.
Supply chain visibility is really just the first step and it’s how you use and take action on this visibility and operationalize it that truly provides consistently better, faster results in the supply chain. It’s this “actionable” visibility through supply chain orchestration that is the key to profitability, cost savings and happier customers.
However, what does actionable visibility mean for the supply chain?
With real-time, end-to-end visibility, we’ve seen companies take action on their data in numerous ways to drive efficiency and optimization. They’ve done so by connecting that visibility with action through a supply chain control tower that their planning teams use to consistently remain on top of supply chain operations.
Here are 3 ways they have been able to improve their supply chains with actionable supply chain visibility.
Improving OTIF with Real-Time Exceptions Management
The first beneficial use we see from end-to-end supply chain visibility is being able to truly “manage by exception” in the supply chain. Organizations are continuously looking to build real-time automated insight into all the stages of their supply chain to ensure that their supply chain delivers on-time and in-full consistently. This means mapping out the lead times and steps across all parties in the supply chain including numerous steps like manufacturing, warehousing and transportation as well as multiple parties like 3PLs, internal resources and transportation partners.
With a line of sight into all steps and parties as well as insight into expectations for lead times at each step, organizations have increasingly been able to plan in real-time customer order exceptions. With immediate action by the planning team on these exceptions, they are able to consistently ensure that orders are delivered OTIF to ensure happier customers as well capture the data they can review to optimize lead times and processes in the future. We’ve seen organizations improve their OTIF by 25-30% by simply catching exceptions sooner in the process.
Improving Overall Lead Times
Identifying bottlenecks in your supply chain is critical to delivering OTIF especially as customers expect faster delivery times across the board. In order to get our B2C and B2B products into customers hands faster, we need to ensure our lead times for all supply chain steps are as optimized as possible and that we are flexible in our use of supply chain parties and resources to free up capacity to handle higher order volumes. Supply chain orchestration is all about this flexibility and we see organizations using intelligent automation to build micro-supply chains that use parties in the most efficient ways possible based on the known lead times, costs and capacity of activities. And just as important, it provides historical data on your lead times so you can determine where you may need to optimize.
Smart organizations are using their lead-time and order exception data to determine where problems exist in their supply chains so that they can adjust and optimize their fulfillment processes.
Eliminating Underperforming Third Parties
We live in an age where we can’t possibly expect to run our supply chains without help and we see this in the data. According to a PwC survey, 74% of supply chain leaders agree that they are seeing an increase in the number of entities involved in their supply chains the last three years.
Cost has been a huge factor in choosing and evaluating the partners we use in our supply chain and will continue to be so. However, as we begin to see our supply chains as competitive differentiators and value generators in our organizations especially with regards to the customer experience, partner performance is going to be an increasingly important impact on our bottom line performance. Especially since a customer doesn’t dissociate our brands from the delivery and fulfillment experience they receive from one of our partners. We are also seeing a huge increase in the need for visibility with suppliers on the inbound side, with product proliferation and expanding global footprints forcing organizations to increase the number of strategic supplier relationships they have globally.
This all lends itself to better visibility and tracking across these third parties. Understanding OTIF rates, cycle / lead times, overall fulfillment costs and multi-tier inventory volumes per partner and supplier is becoming essential and being able to take action on this data to determine which partner relationships to continue is critical to business success.
This is also an interesting trend for 3PL and 4PL businesses as well. The market is beginning to put visibility as a core competency they need in a partner. The organizations that can provide transparency not only into track and trace but lead times, optimization and order exceptions will be the ones that not only retain core business with customers but also win more based on these capabilities.
Optimization is Needed Across the End-to-End Supply Chain
With all the improvements listed above, it’s not enough to just have the data but it’s about making educated decisions on that data that can consistently improve the performance of the supply chain. This process is also not manual but requires automation to help you operationalize this data and ensure that your optimizations are captured and delivered across the supply chain. While this is sometimes implemented with your legacy systems, many organizations see that these systems often lack the needed end-to-end visibility needed to truly implement this optimization. Many are turning to supply chain orchestration and supply chain control towers to help connect these systems while providing the end-to-end supply chain visibility needed to drive better real-time planning over every aspect of the supply chain.