As technology brings supply chain data into focus, the ability to access and interpret critical business information moves from being an added feature to a necessity. Better supply chain visibility has become more than a “nice to have” as executives recognize the importance of gauging a shipment’s current location, delivery times, inventory levels and how demands can be satisfied.
Running a supply chain that moves hundreds of thousands of products takes on an entirely new level of complexity. The importance of visibility is driven by decreasing inventories, advancements in technology, increasing customer expectations, desire to improve service levels and increasing frequency of natural disasters or uncontrollable events.
The growth of ecommerce and omnichannel fulfillment, shortened lead times and heightened customer expectations of next-day and two-day shipping all point to the need for improved supply chain visibility. To meet these pressing demands, manufacturers, retailers and distributors are investing in logistics and supply chain management technology to gain an edge in a competitive environment.
Greater supply chain visibility has become a model that an increasing number of companies are implementing into their quest to adjust and embrace the demands of today’s customers. One of the biggest benefits of visibility in the supply chain is its ability to mitigate disruption. Having visibility gives companies the ability to pre-plan for possible disruptions and react when a situation occurs.
Take the West Coast port issues — congestion and labor strikes — the industry has seen this year. Companies with supply chain visibility plans in place were able to design the inbound flow around the affected ports better than those which hadn’t recognized the importance of doing so sooner.
The lesson learned from that experience was that shippers need the ability to dynamically plan and adjust their supply chain design, including contingency plans to manage emergencies. Supply chain visibility has become a key enabler to mitigate disruptions.
Having this kind of visibility can act as a competitive advantage because companies can react quickly to unexpected situations and emergencies, sometimes enabling them to outperform competitors.
Visibility can also be difficult to operationalize because many companies don’t have direct control, the proper technologies or the appropriate competencies internally. Much like transportation management, logistics is not something most businesses have top-of-mind. This is why working with a third-part logistics (3PL) provider can be beneficial. With their experience in running supply chains, 3PLs can give you the visibility you need while allowing you to focus on your core business.
With the new challenges that ecommerce and omnichannel present, 3PLs provide outsourced fulfillment services to handle the different order types, shipping windows, transportation modes and delivery schedules for same day, next day, or whatever satisfies a customer’s requirements, at an optimal cost. 3PL services can include distribution or warehousing, packaging or value-added, transportation management, supply chain design and logistics system deployment.
There are steps that logistics organizations can take to overcome these and other challenges creating obstacles to visibility. To keep the chaos of an omnichannel supply chain from stopping a business in its tracks, companies should follow these six steps to keep their retail operations on course:
Capture: Utilize the latest technologies, GPS, sensors, cell, contextual, along with traditional means like EDI and data warehousing to capture the appropriate data
Analyze: Evaluate where branded and private-label products come from and assemble a supply chain that moves goods from source to store or fulfillment center efficiently.
Design: Set up supply chain routes, transportation modes and logistics networks to accommodate different products based on the locations of suppliers, manufacturing facilities, distribution points, consumer demand profiles and stores.
Use technology: This will help you gain visibility across the supply chain to coordinate prices, terms of payment, ship date, and need-by dates, and accommodate a range of customer sourcing strategies, production lead times, ship windows and transportation providers.
Sense: Use advanced analytics, tracking, and planning technologies to ensure appropriate custody, control and care of goods while planning for demand and anticipating disruptions.
Comply: Know how to comply with the rules, regulations and practices of the destination country, including properly filing Importer Security Filings (ISF) forms.
Partner: Team up with a trusted 3PL with engineering, integration and operations teams at the point of origin and destination – one that can manage inventory across the supply chain.
By putting these seven steps into action, companies can ensure a more streamlined, visible supply chain that truly meets its needs and those of its customers and business partners.
Gary Allen is Vice President of Supply Chain Solutions for Ryder System Inc.