The power of end-to-end supply-chain management software, and where it can go from here
There continues to be a buzz in executive circles about end-to-end supply-chain management, supply-chain control towers and supply-chain visibility. Although everyone seems to have slightly differing opinions about what these concepts mean, fundamentally it boils down to complete visibility and control of orders and shipments.
That doesn’t mean complete visibility and control for just the shipper; it means complete visibility and coordination by every member of the extended supply chain. That includes manufacturers, third-party logistics providers, carriers, distributors, customers, consumers, brokers—anyone who has a stake or a hand in buying, selling or transporting a product from point A to B.
A complete view of an order—from the time it is placed by the end consumer, retailer or distributor to its journey along the supplier’s manufacturing floor, to warehousing, to shipment, to arrival at the customer’s door—has long been the dream of supply-chain management professionals and senior executives alike.
Until recently, that dream has been unachievable. With the advent of cloud-based and collaborative technologies, however, it’s becoming a reality for many companies. Cloud-based supply-chain visibility solutions, for example, are allowing extended supply-chain partners to share detailed information about items, orders and shipments like never before.
Importers can now communicate orders and order changes to foreign suppliers. The two companies can then have a rich and documented information exchange about the orders, including line-item manufacturing and fulfillment status. Third-party logistics providers can receive product and shipment information from suppliers to help them arrange logistics and prepare documentation well in advance of the goods actually shipping. Truck, ocean, air and rail carriers can provide status updates at many points along the journey. Consumers can go online to see exactly where their order is and when it is expected to arrive.
Any of these constituents can also receive alerts notifying them when something is trending out of tolerance. Consequently, global supply chains can be managed by exception, allowing professionals to focus their attention on the items or shipments that need it most.
It truly is an exciting time to be involved with global trade and supply-chain management. As good as all this is, however, it promises to get better.
A byproduct of collaborative, cloud-based supply-chain execution is rich data: What is the actual average order-to-fulfillment cycle time for a specific supplier/trade lane combination? Which carriers are meeting contracted service-level commitments? What are the average customs clearance times and average duties paid for any given country?
Applying analytics to these rich data sets is already allowing companies to make better sourcing decisions and negotiate better contracts with carriers, for example. What happens when you integrate these supply-chain execution metrics with planning and optimization algorithms? Rather than making better strategic decisions on a weekly or monthly basis, you can start making optimal decisions—based on true lead times, performance levels and costs—closer to real-time. Faster, more predictable global cycle times at lower costs—now that’s exciting!