The Biggest Opportunity for Supply Chain Visibility, Part 1 | Elementum

The Biggest Opportunity for Supply Chain Visibility, Part 1

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Tl;dr

Supply chain visibility is gaining popularity, but smart operators recognize the importance of making that visibility actionable. An optimal digital strategy will incorporate both real-time visibility and real-time action with service management. In Part 1 of this two-part series, I’ll cover the history of supply chain visibility, its benefits, as well as some of its shortcomings. In Part 2, I’ll deepdive into the advantages of combining visibility with service management for the most impactful, end-to-end supply chain visibility solution.

 

Visibility at Last

It’s great to see the success of logistics visibility companies like Cloudleaf, Project44, and FourKites. Despite the obvious benefits of seeing upstream and downstream in your supply chain, it wasn’t long ago that visibility was thought to be part of an impossible dream. I’m sure many of you remember those “control tower” schematics from the 2000’s that promised nirvana but always died somewhere between conception and deployment. There were a couple reasons for that:

  1. 1. The technology wasn’t ready
  2. 2. The ecosystem wasn’t ready

 

1. The Technology Wasn’t Ready
In the 2000s, the supply chain tech stack was fairly straightforward: ERP + Planning + MES + TMS + WMS. Some companies might have all these solutions combined in one tool, like SAP, while others combined best of breeds, like JDA + Kinaxis + Red Prairie. In any case, everything was transactional and everything was on-premise. Even solutions that claimed to be “hosted” didn’t actually have the real-time, multi-party capabilities necessary to support visibility.

Then, in the 2010s, we saw technology advance to the point where real-time visibility was feasible. True multi-enterprise SaaS platforms allowed parties from different organizations to share information in real time. In the 2000s, you were basically stuck with the data inside your four walls – unless you wanted to take on a massive implementation project with all of your partners – which completely undermines the core principles of end-to-end visibility. In addition, around this time, the capabilities to ingest, store, process, and visualize massive loads of data also became both feasible and cost effective. The emergence of public clouds from AWS, Google, and Microsoft powered a new world of capabilities at fractional pricing from a decade earlier.

 

2. The Ecosystem Wasn’t Ready
For end-to-end visibility to be effective, the full ecosystem has to participate. As a VP of Logistics, it’s a no-brainer that I want to see delays anywhere in my supply chain as soon as they happen. However, as a supplier, I don’t necessarily want to share every single hiccup in my operations. In fact, as a Director at a supplier, I make my living by triaging delays behind the scenes all day long.  

It was only five years ago that onboarding partners was an exercise in futility. From suppliers to CMs to carriers, the resistance was palpable: “I’m too busy right now;” “our systems don’t support this;” “we already have our own internal visibility solution;” etc. Even for the partners that did agree, many dragged their feet hoping the project would be cancelled or simply pass them by.  

Ultimately, change is difficult, and it takes time. Today, the ecosystem has evolved to appreciate better information and better collaboration. Also, VPs of Logistics know that they can’t overreact to every delay, but instead, their teams must use the visibility responsibility. 

The improvements in technology also make a difference. It’s easier than ever to pull data. There’s also confidence that the end product will be reliable and accurate, hence, worth the effort.

 

New Best Practices

With better technology and a supportive ecosystem, we’ve seen a rapid acceleration in the adoption of supply chain visibility:

  • • 2005: Impossible
  • • 2015: Interesting
  • • 2020: Exciting
  • • 2022: Necessary

In the standard tech stack for supply chain management, we’re seeing more and more companies incorporate visibility as a core component. This is great news because the other parts of that tech stack haven’t changed much in decades. While other industries have been quick to digitize (e.g. e-commerce, education, telehealth, etc.), supply chains have largely been stuck in the same-old. However, with end-to-end visibility, supply chains can finally identify, assess, and act faster than ever before. Or, can they?

The Supply Chain Visibility Tech Stack

Visibility in Action

The playbook for visibility is straightforward:

  1. 1. See upstream problems
  2. 2. Do something before they become downstream problems

Certainly, there’s more to the business case for visibility than just these two points, but at its heart, visibility is about proactive identification and action. For anyone who’s led or participated in a visibility project, then you know that visibility solutions do a great job at the former but a sub-par job at the latter. It makes sense, as the name implies, visibility emphasizes identification. These solutions were designed specifically for the purpose of ingesting and presenting data. They have endless ways to visualize your supply chain and the various assets, containers, SKUs, sites, and shipments within it. They also have a myriad of filters and notifications to alert users of delays, disruptions, and deviations. 

 

However, what happens after the notification? How can you make sure identification turns into action? What good is visibility if no one does anything with it?

The Reality of the Visibility Supply Chain Tech Stack

A Complete Solution
If we take a step back and look at the big picture, our ultimate goal in supply chain is to get the right products to the right place at the right time and for the right cost. Visibility has been a means to that end. The theory goes that if I can see all the way upstream, then I can ensure the best possible outcomes downstream, as measured by on-time delivery, perfect order, service level, or your KPI of choice. In reality, for this to be true, then visibility must be married with action. For every alert or notification, there must be steps taken to ensure the problem is effectively mitigated.

In an ideal world, there would be both a proactive alert and a pre-set workflow to address any potential problems. For example:

Visibility solutions are great with steps one and two, but the capabilities for steps three through six are severely lacking or totally nonexistent. As a result, companies only realize a small portion of the potential benefits. By and large, they are more aware of their problems, and some problems are getting addressed proactively, but their KPIs are not improving as much as they should be. Problems are still slipping through the cracks – especially the ones that have multiple touchpoints or handoffs – and customers are still being impacted. 

To truly make visibility effective, supply chains must also have a means to ensure standard operating procedures are always followed. Enter service management.

 

The Unspoken Hero: Service Management
Think of service management as workflows on steroids. There’s all the standardization and reliability of workflows with the added benefits of modern SaaS platforms: analytics, dashboards, notifications, APIs, and more, all packaged in a sleak, intuitive user interface. 

Every other function in the enterprise has already figured out the value of service management. Sales has CRM, HR has HCM, IT has ITSM, and customer service has CSM. Supply chain has spreadsheets and emails. 

Today, when visibility solutions identify a problem, the next steps are almost always managed and tracked through spreadsheets and email. As a result, supply chain leaders effectively lose visibility to the problem. Spreadsheets and emails are decentralized, non-standardized, unsecure, and unauditable. With a service management platform, all of that changes.

The Optimal Supply Chain Visibility Tech Stack

Putting the Pieces Together

Visibility has come a long way in the last 20 years. With the latest innovations in technology and the ecosystem primed to be supportive, it’s just about putting the right pieces together. Fortunately, there’s a proven playbook for combining visibility with service management. Look for Part 2 of this blog where I’ll go into best practices and company success stories.

David Blonski

David Blonski

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