Today's post is courtesy of Nathan at GTMBestPractices.org. Enjoy!
"Improving visibility" is often one of the top three priorities of supply chain executives to improve the performance of global operations. Here are ten tips to capture the benefit:
1. Accommodate Multiple Fulfillment Models. Visibility solutions need to be highly configurable to accommodate all of the various fulfillment models in operation across the enterprise. Domestic supply chains with three handoffs and a cycle time of less than a week are much different than an international supply chain that involves 12 – 15 handoffs and two border crossings. Supply chain visibility solutions that are flexible enough to accommodate multiple fulfillment models allow benefits to accrue across the enterprise and not within a specific product line or operational model.
2. Create an ‘Information Hub’. Visibility solutions not only extend processes outside the four walls, but must integrate and aggregate key information from within the four walls of the enterprise. The ‘Information Hub’ creates a one-stop-shop for key order, shipment, and inventory information from all internal ERP, TMS, WMS and other inventory planning systems. This expands the number of supply chain processes that can be managed by Visibility and ultimately improves productivity by eliminating ‘sneaker nets’ and re-keying of information..
3. Don’t Assume Data Quality. Aberdeen Research recently conducted a survey and discovered that only 16% of Visibility implementations have data quality above 91%. The other 84% of companies surveyed must clearly be challenged by user adoption. To achieve the value from a visibility solution, users must have confidence that the information is both timely and accurate. State-of-the-art Data Quality Management is comprised of complex rule-based systems to cleanse and standardize information and analytical tools to monitor, troubleshoot and resolve data quality issues using Six Sigma principles.
4. Use a Proven On-boarding Process. Data quality starts at the source and successful Visibility implementations often use an on-boarding service that is based on a careful assessment of information requirements and leverages existing integrations from an established network of transportation, logistics and brokers to certify new connections.
5. Postpone Inventory Allocation Decisions. Many leading companies are using Visibility to track shipments to an SKU level. This allows them to treat the container as a ‘floating warehouse’ to implement inventory diversions through a transload facility or to and to postpone all inventory allocation decisions to just prior to Entry. Given long order-to-deliver cycles, this ability to manage in-transit inventory can reduce days inventory on hand and stock-outs.
6. Push Visibility Back to Origin. Many initial Visibility implementations are based on ‘where’s my stuff’ shipment tracking at a container level. Savvy companies, however, are expanding their Visibility systems by linking orders to shipments and managing in-transit inventory. New CBP regulations such as 10+2 create much more accountability for the importer and kicking off a new wave of investment to push visibility back to the origin. Many of the “10” data elements are related to the supplier, the seller and where goods were loaded – all information that can be collected from origin operations.
7. Finally Manage Trading Partners with Scorecards. The by-product of operational Visibility is a rich repository of supply chain data that can be aggregated across the enterprise and with all trading partners year after year after year. Using leading Business Intelligence tools, scorecards to manage supplier compliance, or transportation booking performance can be easily developed. Since Visibility reduces tactical firefighting, the purchasing, logistics and customer service teams can redirect their efforts to continuously improve global operations.
8. Track Landed Costs Along the Chain. Aberdeen reports that companies that implement visibility are twice as likely to reduce total landed costs over the past two years. Many companies use Visibility to track product, freight and insurance costs as well as integrate trade compliance information such as duties, tax, VAT and other governmental charges. By seeing how costs build and monitoring variances to budget, companies can focus efforts to target cost overruns
9. Use Triggers to Automate Handoffs. Visibility solutions today are evolving from monitoring tools to execution systems. Leading companies are using ‘triggers’ based on supply chain events to plan warehouse receipts, to schedule a pickup, or to alert that the free-time will expire on a container. These triggers create tremendous value by compressing cycle time or helping to reduce the costs associated with demurrage and detention fines
10. Become Your Own 4PL. Visibility is now considered to be a critical and strategic information asset. Leading companies are implementing the infrastructure and deploying new value-added services to their business units and ‘plugging in’ logistics provider partners; in short, they are becoming their own 4PL. The advantage of this model is that all trading partners integrate to one standard and are managed at both a tactical and strategic level. In this way the central logistics team controls all information assets and the delivery of value-add services to their constituents. Perhaps “I am here from Corporate and ready to help” can take on a totally new meaning in your business.
This post was published on August 13, 2010 and updated on February 21, 2014.