Last week, Geodis released their 2017 Supply Chain Worldwide Survey report, and if you get a chance, I’d highly recommend you download and read the report!
One of the most interesting stats in the report was on supply chain visibility. According to respondents, only 6% reported having “end-to-end supply chain visibility”. Only 6%!
In this post, I wanted to take a look at supply chain visibility, what end-to-end visibility mean and it’s impact on supply chains.
What is Supply Chain Visibility?
You talk to any vendor in supply chain and they will talk about visibility and analytics. It’s become a buzzword and checklist item on every technology’s data sheet and marketing materials. But when we use the term supply chain visibility and all the places it touches in our supply chain, what’s important?
When looking for a definition, a good place to start is Steve Banker’s article, A Fresh Look at Supply Chain Visibility. In it he defines supply chain collaboration and visibility by this criteria:
When it came to supply chain collaboration, we defined this as having a collaborative, multi-supplier, multi-tier, supply chain planning solution. For visibility, the definition was a solution providing visibility to the order process (order placed, order adjusted, order accepted), inventory at rest or inventory in motion events, or supply chain risks, or providing a stand-alone supply chain analytics/event management solution not embedded in other solutions.
What is interesting about this definition is three things:
- This covers multiple technologies and areas of supply chain: As Steve mentions later in his post, this covers a number of different supply chain technology categories and disciplines. We’ll talk about this below.
- Collaboration is tied to visibility: There is no mistake that the ARC study included collaboration along with visibility. As supply chains get more complex with multiple suppliers and partners needed to serve our increasingly global customer base, collaboration and visibility into internal and external stakeholders is integral to ensuring consistently high customer satisfaction.
- Solutions embedded or not: As Steve mentions, some solutions remain embedded in the day to day of visibility and others focus on stand alone analytics across the supply chain.
Let’s look at the solutions and the value they provide to our decision-making and execution in the supply chain.
Two types of Supply Chain Visibility
If you’ve read Gartner’s opinion on the topic or their Market Guide to Supply Chain Visibility, they separate supply chain visibility into two areas: Supply Chain Planning (SCP) and Supply Chain Execution (SCE).
Supply Chain Planning focuses on the global planning visibility across all functions related to the supply chain, typically acting as the planning system of record around requirements, replenishment, demand and/or order promising planning. It may also connect with S&OP and/or integrated business planning or demand sensing.
Supply Chain Execution focuses on the execution in terms of sourcing, making, delivering and servicing orders across the supply chain.
In short, Supply Chain Planning is about the long game of forecasting your ability to serve your customers tomorrow. Supply Chain Execution is about the actual actions you take to serve your customers today well beyond typical track and trace. It's focused on visibility across multiple parties and milestones that you can take action and execute on.
Supply Chain Orchestration = Actionable Visibility
As organizations move up the Supply Chain maturity curve, supply chain planning is typically where they start. To drive down costs and improve efficiency in the supply chain you need to be able to forecast production, inventory and transportation across your supply chain. However, what most organizations lack is the ability to take action on this insight within the supply chain itself especially on granular steps. This leaves organizations with a high level view that fails to provide the actionable visibility needed for continuous daily improvement.
Supply chain planning can help you identify drivers and improvements to be made globally across your supply chain and help you build out wholesale changes in the supply chain to drive improvement. However, this information is typically lacking real-time information. It’s not about the exceptions that happen today in the supply chain but a look at the aggregate over time. In many cases, the software used doesn’t create data in the supply chain but hooks into the systems that do.
Supply chain execution which is innovating with supply chain orchestration, is focused on providing actionable visibility that helps you identify exceptions at any stage in the supply chain for every single customer order. It drives ground level decision making that helps to ensure fulfillment of customer orders on-time and in-full, while helping to capture more granular level data in the supply chain for supply chain planning purposes. That means re-planning customer orders where needed quickly and flexibly at any stage of the supply chain process.
As you look at your supply chain visibility, it’s important to have both the high level supply chain planning view as well as the action oriented ground level supply chain execution view of your supply chain. They work together to help you build the best short and long-term strategies for customer intimacy and operational efficiency.