Most operational supply chain issues fall into a few clear categories that, when approached in an orderly way, do not require drastic measures to solve. Our Supply Chain Issues series explores each of these categories and provides hands-on solutions for key decision-makers. To read the entire series please click here.
Supply chain and logistics networks are complex systems spanning the globe that consist of partners and equipment connected by people and technologies designed to function seamlessly. Small disconnects in communications or lost connections create a ripple effect that impacts this ecosystem. Harnessing this ‘symphony’ digitally and translating events from data to actionable business analytics represents an enormous business opportunity. Whether a family-owned business or a publicly traded enterprise, digitizing the supply chain and transitioning from reactive firefighting to proactive strategy and problem anticipation will drive consumer loyalty, increase profitability, and ultimately fortify a company’s sustainability.
Disconnected data weakens visibility and oversight
Accounting for the daily activities of a supply chain manager – from coordinating logistics and executing warehouse operations, to managing staff and maintaining external partnerships – there are several demands on their time that require substantial attention to detail to ensure the supply chain runs seamlessly. If a company does not have a smooth process for collecting and analyzing their data, the numbers would serve more as a hinderance to productivity rather than as a tool to enable rapid growth, based on the time and effort required to find the true reference point.
In the instance where methods for tracking operations of planned, active, and actual events are dispersed among several platforms, such as spreadsheets, emails, or hard copy purchase orders and invoices, a supply chain manager can only make decisions based on an incomplete data story through a paper trail or rickety spreadsheets.
Incorrect or missing information leads to poor or wrong decisions
Due to a lack of a single source of truth and convoluted spreadsheets, supply chains are misfiring. However, the margin for error is narrow, as businesses operate in just-in-time models with minimal inventory reserves and must transport important shipments in the most efficient and cost-effective way. In this, businesses must rely on accurate managerial input to coordinate a product’s lifecycle from inception to final delivery.
To consider data management from a different angle, customer relationship management (CRM) systems, such as Salesforce and Microsoft Dynamics, have grown in popularity as they provide large corporations with oversight of their employees’ revenue generating actions and collect quantifiable data on a client’s buying behaviors.
Similarly, supply chain managers coordinate with external partners and warehouse and delivery vehicle operators to build relationships to maintain supply chain workflow. These activities and events should equally be tracked and monitored diligently so that leaders can assess positive outcomes in the distribution footprint or in negative trends, like unexpected costs in detention and demurrage charges, to better inform a planned course of action.
Unmitigated corporate vulnerability
Without a digital platform, important events and developments may not accurately be monitored to ensure compliance of a flawless execution. Further, a company without modern technology may not have complete foresight of potential errors to avoid risks, such as lost shipments or missed payments. In a more public sphere, companies face a growing pressure to account for their environmental impact. In the case of publicly traded enterprises, both quantitative and qualitative data should demonstrate a company’s carbon offset program and the direct effects of the industrial footprint on the planet.
Mastering supply chain effectiveness is a competitive advantage
Understanding the areas in which your company compares amongst competitors can be assessed through published annual stakeholder reports. Such reports serve also as a tool to measure broader industry trends. Internally, data should convey an accurate scorecard of which lines of business require review, or alternatively, are poised for considerable growth. Efforts can be focused to scale one area of the business at a time to isolate potential impacts to the overall supply chain and to improve the speed to market in delivering goods to the end-customer.
How to close the supply chain data gap
Operations can be streamlined to increase efficiency of daily tasks, thereby reducing labor hours that are lost while searching for information through paper trails, emails, and phone calls. Internal and external corporate risks can be mitigated or avoided altogether by way of reliable data sets curated within ERP systems. Finally, a business cannot successfully scale if analysts are not guided by precise data.
Companies that have yet to advance to an enterprise resource planning (ERP) system may perceive the combination of time and resources required to upgrade as a barrier. In this instance, the vast improvements of a technologically advanced system far outweigh the initial investment. To ease this transition in the early phases of upgrading to a data management system, clearly map data through logical and physical data flow diagrams. Creating this system architecture builds the structure in which data can be properly mapped to digital workflows and accurately analyzed.
With a practical and logical data map in place, companies can begin to visualize their supply chains in pragmatic steps and ultimately move towards a visibility platform that will provide a cockpit of live supply chain activity. This effort and investment will pay off tenfold and prepare your business to effectively compete and win.