Spreadsheets Out: Supply Chain Visibility In
In his recent WMS Guide blog “More Visibility, Fewer Silos”, ERP Analyst Michael Koploy argues that supply chain visibility is being hindered by a lack of transparency, inadequate data, and antiquated methods of ‘management by spreadsheet’. Koploy cites a May 2011 Capgemini study that found a significant 45% of polled supply chain executives consider supply chain visibility as their top initiative for 2011.
From the perspective of a fulfillment services company, Koploy’s view of the criticality of supply chain visibility is spot-on. He highlights three specific examples:
Better inventory management. More granular and real-time supply chain data enables tighter inventory control and an opportunity to reduce on-hand inventory and its associated cost.- Better procurement practices. Historical data and supplier performance data can help purchasers identify trends to optimize future buying decisions and supplier selection.
- Better logistic operations. System and data integration between a company, its suppliers, clients, and transportation partners is critical to allow all aspects of the supply chain to work smoothly together.
A good fulfillment company will track all aspects of its supply chain, from manufacturer to end customer. A great fulfillment company will identify potential problems in advance and have a quick and effective mitigation plan to address such problems as they occur.
Let’s consider the scenario of a production job requiring input materials from multiple suppliers. A single shipment of materials required to complete the production job is running late due to unforeseen circumstances not communicated to the fulfillment company. Whether this late shipment delays the entire production process or causes it to be paused mid-way due to inadequate inventory, not having material to complete a scheduled job is undoubtedly one of the worst scenarios for any fulfillment company. A stalled production job affects labor staffing, impacts other production schedules and, most importantly, may lead to missed client commitments.
Having accurate and real-time supply chain visibility would minimize the negative effect this late shipment in the following ways:
- An electronic data interchange (EDI) interface with the supplier allows visibility into the supplier’s delivery schedules so the fulfillment company can help monitor crucial shipments and ensure their schedules are met via proactive follow-up.
- Accurate supplier shipment manifests, provided via an Advance Shipment Notice (ASN) can ensure that incoming shipments contain the adequate quantities required to complete a production job. Pre-loading this ASN data into the warehouse management system (WMS) will also streamline the inventory receipt process and eliminate manual data input errors.
- Real-time inventory of packaging materials, quantities and sizes, will ensure that the post-production shipment process is smooth and timely.
- Especially during any delay in operational processes, overall visibility and real-time reporting capabilities are vital to assist customer service and management teams in their communication with the client.
In today’s competitive market, the fulfillment services company that can minimize disruptions to its supply chain will ultimately succeed. Supply Chain visibility is a key factor for this success but one that cannot be found in spreadsheet forms, filters and formulas.