CLN Exclusive Whitepaper Knowledge for Innovation - Combined Logistics … · 2019-02-07 · For their report ‘Enabling Supply Chain Visibility and Collaboration in the Cloud’,

CLN Exclusive Whitepaper

Knowledge for Innovationwww.combinedlogisticsnetworks.com

MARK MILLARSupply Chain ViSibility2

Seeing through the CloudS? leVeraging teChnology to improVe Supply Chain ViSibility ApRIL 2013

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Supply chains have developed, evolved and morphed into complex ecosystems with multi-layered inter-dependencies, frequently spanning the globe, crossing time zones, cultures and languages.

At the same time, the traditional growth consumer markets in Europe and North America are experiencing varying degrees of economic, social and political uncertainties, which intensify the continual challenge of forecasting demand and result in high degrees of variability in our supply chains.

Challenges with forecasting are consistently quoted as one of the biggest headaches for supply chain executives. However when probing further, it transpires that Visibility – or lack thereof – is one of the biggest inhibitors to accurate forecasting.

EXECUTIVE SUMMARY

MARK MILLAR Supply Chain ViSibility 3

Seeing through the CloudS? leVeraging teChnology to improVe Supply Chain ViSibilityApRIL 2013

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MARK MILLAR4


Supply Chain ViSibility

In order to sense a problem it must be visible. Developing visibility is a process combining technology and partnership. Technology is at such an advanced stage that we can see and measure virtually every aspect of the supply chain. However, to be used effectively, the available technology needs to be deployed with openness and trust amongst and across all partners throughout the supply chain ecosystem.

Providing Visibility can - and will - provide compa-nies with early warning systems that alert the rel-evant participants when events are deviating from

the plan, enabling adjustments to be promptly imple-mented, thus empowering the supply chain ecosystem to achieve increased performance levels.

However, as our businesses have become increasingly global, they inevitably involve multiple different organisa-tions configured together by the principal into a unique supply chain ecosystem, within which the principal en-courages and expects collaborative behaviour amongst the participants – easier said than done!

Hence, successful multi party collaboration becomes critical for success.

Collaboration includes the open and cooperative sharing of information on a needs-to-know basis with constitu-ent partners throughout the ecosystem - for the overall efficiency and performance of the supply chain, without compromising proprietary data. For successful collabo-ration, over and above technology integration, it is impor-tant to have managers representing the partners to work

VISIbIlITY - ESSEnTIAl bUT ElUSIVE

diligently in building and nurturing organisational rela-tionships, such that the managers are individually and collectively responsible and accountable for collabora-tive projects. These relationships need to be maintained throughout downturns so that when the upturn does ar-rive there remains a strong bond between companies.

However, as modern supply chains resemble complex ecosystems rather than linear chains, the suppliers, manufacturers and service providers that work together to service one client’s supply chain, are often fiercely competing against each other to win business to service a different client’s supply chain. Indeed, whilst each com-pany has their own supply chain ecosystem over which they have control, that same company will most likely be a participant in several other supply chain ecosystems, for example for its customers and suppliers. These struc-tural aspects are the root cause of some of the inherent difficulties in achieving successful collaboration.





Amongst all the complexity, let’s remind ourselves of the fundamental objectives of supply chain management – to manage the efficient and effective flow of four critical elements throughout the ecosystem: Goods, Services, Funds and Information.

And whilst managing these flows of goods, ser-vices, funds and information, we are continually striving to balance the optimisation of three key

performance metrics: Speed, Cost and Quality.

All sounds rather straight-forward. However in reality the combination of complexity and volatility make global sup-ply chain management both exciting and challenging, but never boring.

As we continually try to juggle speed, cost and quality we realise that all three elements cannot be optimised simul-taneously!

One of the three will always have to be compromised to some extent - in order to optimise the other two elements. For example, if the solution is fast and cheap, then we will likely have to compromise on the quality. Likewise, if we

bACk To bASICS

require top quality and high speed, then it is unlikely to be the lowest cost solution.

As we know, our demanding customers typically expect everything to be perfect, they want it now - and they want it for free!

Hence the perpetual challenge of supply chain optimisation – finding the right balance between speed, cost and quality that is appropriate for the circumstances of any particular supply chain scenario, which of course will be situational, varying frequently but on an irregular basis.

However, if we can’t see what is happening, then how can we determine and manage the appropriate balance of levers-to-pull, knobs-to-turn and partners-to-persuade - within, across and throughout the supply chain ecosystem?





Globalization continues to accelerate and introduces additional strains on supply chain performance. The increase in complexity is further expanded as dynamic supply chains involve multiple stakeholders and this is further driving the essential need for a collaborative approach. Most significantly, it is demanding new mind-sets to shift beyond our traditional comfort zones and deploy more trust amongst supply chain partners and extended stakeholders, in order to improve visibility and thence optimise performance.

IBM’s Global Chief Supply Chain Officer (CSCO) Study identified Visibility as the biggest single challenge impacting their supply chains, with 70% of over 400 CSCOs from 25 countries saying that their inability to ‘see’ information was inhibit-ing their ability to act. They reported struggling with overwhelming and fragmented data as well as lacking the ability to

make sense out of the information.

ThE ChAllEngE AhEAd

55%

70%60%

55%43%

CostContainment

Supply Chain Vis-ibility

RiskManagement

Increasing Customer Demands

Globalization



The threat of information blind spots is understood by supply chain leaders, but they were not confident or optimistic that they are leveraging their valuable information for meaningful competitive advantage. Only 16 per cent of respondents reported being ef-fective at integration and enabling visibility of infor-mation across the supply chain with their external partners.

To make matters worse, whilst visibility was the top challenge, it was by no means the top priority. There was little evidence that organisations have programs and activities in place to remedy the lack of visibility. Even successful deployment of technology does not

necessarily help the situation - frequently resulting in an explosion of data, without generating much addi-tional information. The issue is often not about hav-ing too little information, but rather too much.

Whilst technology can provide the conduit for in-creased information visibility, the bigger challenge is that organisations need the courage to step out-side of their comfort zones to truly collaborate and openly share information, adopting a more trusting approach amongst customers, suppliers and even competitors.



So let’s consider the role of technology as a key enabler of supply chain visibility, but we cannot overlook the fact that the multiple participants within the ecosystem are likely using different technology systems.

TEChnologY TYRAnnY?

Visibility in the Cloud, or Cloudy Visibility.

In striving for end-to-end visibility, companies are seeking to deploy a single platform through which the participants can all view All the data – including through to their suppliers’ suppliers – and then convert the masses of data into meaningful information. Inevitably, we experience integration challenges when seeking to connect multiple disparate systems together.



However, when undertaking information technology projects, multiple roadblocks will be encountered, testing even the strongest fortitude. Large doses of commitment and determination are required to successfully drive these projects to successful completion.

In the Aberdeen study, they reported that the best-in-class adopters achieved material supply chain benefits, including

• Perfectorderrateof88%• Cashtocashconversioncycleof22days• Ordertodeliverycycleoftime4days• On-boardnewB2Btradingpartnerswithin14

days

In order to achieve such best-in-class performance, amongst other recommendations, Aberdeen argues that companies must:

• implementtheabilitytocollaboratewithcustomers

• implementtheabilitytoon-boardtradingpartners quickly

For their report ‘Enabling Supply Chain Visibility and Collaboration in the Cloud’, Aberdeen Group benchmarked the supply chain application priorities and strategies of 150 organisations.

Their findings were that the role of cloud based solutions, such as Software as a Service (SaaS), in enabling visibility

and promoting collaboration are proven to provide businesses with competitive advantage in areas that require multi-enterprise collaboration - which effectively includes the vast majority of all commercial businesses operating in the B2B or B2C environments.

21%

42%

37%

Aborted / Stopped Time / Budget Exceeded Successful

Source: Chaos Report 2011, Standish Group

IT Project Success Rates



Even when we have the technology engines seamlessly integrated and synchronised, there will still be challenges in providing ‘clean fuel’ - in order for the technology to be effective, it must be fed with high quality data.

GT Nexus advocate three critical steps for getting quality supply chain data to feed your applications: 1. Connecting with your partners2. Normalizing the data they provide3. Managing data quality

To successfully extract information upon which decisions can be made, it is essential to focus on maintain-ing high levels of integrity across all three key attributes of high quality data:

1. Accuracy: the data must be accurate in order to provide any sense of meaningfulness; recall the budget review meetings where different parties have different numbers!

2. Completeness: missing data can and will distort the information derived and can therefore impact supply chain decisions as badly as incorrect data.

3. Timeliness: data that arrives too late may as well be data that is missing; in the world of high veloc-ity supply chains, the need-for-speed applies to bits and bytes, as much as it applies to cartons and pallets.

RElIAnCE on QUAlITY dATA





We are proud to announce that We have signed a memorandum of understanding With industry thought leader mark millar. the purpose of White papers is to provide cln members insights for innovative business development.

industry thought leader mark millar has been engaged by clients as speaker, mc, moderator or conference chairman at more than 250 events in 20 countries and is recognized by the global institute of logistics as “one of the most progressive people in World logistics”

www.combinedlogisticsnetworks.com

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CLN Exclusive Whitepaper Knowledge for Innovation - Combined Logistics … · 2019-02-07 · For their report ‘Enabling Supply Chain Visibility and Collaboration in the Cloud’,