Supply Chain Visibility and Collaboration: Fellow Travelers on the Path to Excellence

Stephen DeAngelis

September 08, 2016

“A lack of supply chain visibility and ineffective collaboration [are] often the reason[s] for poor supply chain performance,” asserts Antonia Renner (@AntoniaRenner), a Senior Solutions Marketing Manager at Informatica. “[They] often lead to bad decision making, missed market opportunities, high costs, slow time-to-market, and increased manual workloads. But more importantly, [they] frequently result in a bad customer experience.”[1] Supply chain visibility has been a topic of interest for years. Lately, however, collaboration and visibility are often written about together. Lora Cecere (@lcecere), founder of Supply Chain Insights, explains, “Today the supply chain is more dependent on trading partners than ever before; yet, the primary communication is email and spreadsheets. Beyond the firewall, the company is flying blind. … This is inadequate.”[2] Cecere’s point is that you don’t get visibility without collaboration. “Today manufacturers are more dependent on third parties for supply chain services,” she writes. “This includes the delivery of finished goods, the use third-party manufacturing and the procurement of direct materials. The issue is that technology investments and architecture do not support today’s reality. Value chains are growing increasingly complex, and global trade makes these gaps even more critical.” Analysts at PYMNTS.com concur. They observe, “The supply chain may be going global, but for many companies, it remains more opaque than ever.”[3]

Leveraging New Technologies

Jarrod Goentzel (@goentzel) and Fredrik Eng Larsson, from the Massachusetts Institute of Technology’s Center for Transportation Logistics, report, “In early 2015, we surveyed 160 logistics professionals about supply chain practices and we were struck by results that suggested that advances in technology have yielded little progress in helping companies see where their goods are moving in their supply chains. Less than 20% of those surveyed were satisfied with current visibility. Companies complained about black holes in information flows, especially when goods are transshipped in Asia and South America.”[4] The problem is not that new technologies can’t help, but, as Cecere noted, the reluctance of corporate decision-makers to invest in them. Their reluctance is understandable. Many past IT investments have proven expensive and have tied companies to legacy systems that can’t always keep up with the times. The newest technologies are different. They promote collaboration and are often able to give new life to expensive legacy systems. Foremost among these new technologies are cloud computing, the Internet of Things (IoT), and cognitive computing. Cosmas Hoefnagels, Vice President of CLX Logistics Europe, predicts these technologies will greatly improve supply chain visibility and collaboration. “As digitization continues to modify the global supply chain landscape,” he writes, “its unprecedented data sources and solutions will lead to not only the demise of disparate information systems, but to the rise of true, end-to-end, supply chain visibility.”[5]

The Cloud

Ed Rusch (@edwardrusch), a marketing specialist and technology evangelist, writes, “The cloud can be a real game changer for supply chain applications, allowing greater connectivity, which leads to greater collaboration. The cloud allows for connections to be made rapidly and at a lower cost, opening the door for richer connections to be made — and to be made faster.”[6] Anthony Clervi (@Aclervi), Vice President of growth at UNA Purchasing Solutions, adds, “Although cloud technology has been around for almost 20 years, supply chain professionals are relatively hesitant to migrate their systems. Though the industry’s move to cloud computing is still in its youth, cloud technology makes a lot of sense for supply chain managers. Computing in the cloud makes it possible to closely track a product throughout its lifecycle. Cloud-based supply management can also significantly cut down on lost product as it can locate a shipment during any stage of transport. And it enables you to make quick decisions and communicate effectively if you need to reroute a misdirected shipment.”[7]

The Internet of Things

Haley Garner (@eftHGarner), head of research at Eye for Transport (eft), told PYMNTS.com, “The potential for IoT technology in supply chain management can be massive.” The analysts at PYMNTS.com add, “Supply chain decision-makers across logistics and manufacturing companies offered their insight into how the Internet of Things is shaping the future of their industries. At present, eft found, 41 percent of supply chain management officials already have some form of an IoT solution in place, while an additional 23 percent said they plan to use IoT technology sometime in the future. Further, a vast majority (87 percent) said they plan to expand their use of IoT. Researchers pinpointed where these players want their IoT solutions to bring transparency and efficiency to their operations. Above all, the ability to track the location of materials in the supply chain is their top demand.” The Internet of Things is primarily a machine-to-machine network that is predicted to expand dramatically (connecting billions of devices) and generate enormous amounts of data. That data will only be useful when it is analyzed for insights; that’s where the next technology — cognitive computing — comes into the picture.

Cognitive Computing

Diego Lo Giudice (@dlogiudice), an analyst with Forrester, believes that a quarter of a century from now cognitive computing will have replaced artificial intelligence as the term most used to describe smart machines.[8] Lo Giudice and his colleagues at Forrester conclude, “Cognitive systems are creeping into commercial relevance beginning with high-end customer engagement applications in financial services, healthcare, and retail and will become ubiquitous in mainstream scenarios and the Internet of Things within five years.” Cognitive computing systems offer two significant capabilities when it comes to supply chain visibility. First, they can gather and analyze both structured and unstructured data. Bob Ferrari (@bob_ferrari), a supply chain consultant, asserts, “Enabling end-to-end visibility is not about ripping out existing IT and software application investments. That is often too disruptive, especially to mission critical supply chain processes. The reality is that supply chain data is indeed spread out among various internal and external systems in varied formats, syntax, and degrees of quality. Instead, it is about building-out enhanced information management, integration and decision-support capabilities from more streamlined sources of planning, execution, supplier based and customer fulfillment information.”[9] By integrating data from both internal and external sources, cognitive computing systems help provide a single version of the truth from which all corporate divisions can draw. That brings us to the second capability inherent in cognitive computing systems. They can help break down corporate silos. Rusch suggests, “Eliminate silos within your organization to take full advantage of end-to-end visibility. Typically companies operated in silos, but according to a recent Global Supply Chain Institute at the University of Tennessee survey, while some lines between business functions have blurred, silos still exist, especially between purchasing and logistics. Best-in-class companies tend to have end-to-end supply chain integration.” Renner adds, “Accenture Strategy recently published the report ‘Digital Trendsetters: Secrets of the most successful digital supply chains’ and found out that ‘creating a flexible ecosystem where everyone can have access to the right information to work together collaboratively toward a common goal is a top priority for fully two thirds of digital trendsetters.'”

Summary

Ferrari observes, “One of the most critical challenges cited by multi-industry supply chain teams is extended supply chain visibility. This challenge is becoming universal as industry supply and value-chain processes continue to become more complex with constant changes in needs for business support. It is consistently cited by many supply chain leaders as a continued perplexing challenge.”[10] Achieving supply chain visibility requires collaboration among all stakeholders. Fortunately, emerging technologies can help enterprises reach this historically elusive goal.

Footnotes
[1] Antonia Renner, “Realizing a Seamless End-to-end Information Supply Chain,” Informatica Blog, 18 August 2016.
[2] Lora Cecere, “Beyond the Firewall: If Only I Could See,” Forbes, 25 January 2016.
[3] Staff, “Supply Chains Link Up With IoT,” PYMNTS.com, 16 August 2016.
[4] Jarrod Goentzel and Fredrik Eng Larsson, “Guest Voices: Seeking the Value in Supply Chain Visibility,” The Wall Street Journal, 14 June 2016.
[5] Cosmas Hoefnagels, “Supply Chain Visibility: A Precursor to Insight and Optimization,” Talking Logistics, 27 April 2016.
[6] Ed Rusch, “Becoming a High Performing Sense and Respond Enterprise: End-to-End Supply Chain Visibility is Key,” Talking Logistics, 23 March 2016.
[7] Anthony Clervi, “Cloud Computing Is Transforming Supply Chain Management,” Supply & Demand Chain Executive, 12 October 2015.
[8] Diego Lo Giudice, “Three assumptions for why the next generation of software innovation will be cognitive,” Computerworld UK, 28 August 2014.
[9] Bob Ferrari, “Foundational Aspects of Supply Chain Wide Visibility,” Supply Chain Matters, 6 May 2016.
[10] Bob Ferrari, “Business Process Foundations for Supply Chain Wide Visibility, Supply Chain Matters, 1 June 2016.