Semiconductors. Plastics. Coffee. Copper. Building Supplies. Motors. The list goes on and on. Supply chain shortages abound.
Today, more than 1% of the world’s container ships are stuck off major ports. Unloading times are double and costs are triple. Warehouses are full–often with the wrong stuff resulting in the slowing of the forty million shipping containers around the world. The supply chain impact is unprecedented. Conventional approaches are not sufficient. The unraveling of the multitude of issues will take years.
Let me paraphrase the situation. Importers are trying to push 30 percent more thru a system that is running at 70 percent throughput aainst the old level. So we are actually at 40 percent of the throughput we need to be at so there is no backup…ok, so sounds like we have an infrastructure and shipping network problem. Also insufficient pay to attract truckers, longshoremen, etc.Linkedin Comment
Data Warehousing Consultant at Ohio State University Comprehensive Cancer Center-James Cancer Hospital & Solove Research Institute
The word of the day is visibility, yet this is the nut–that companies implementing many projects, — cannot seem to crack. The reason? All technologists today tout a visibility solution, but visibility is not visibility.
The solution remains elusive. There are many flavors and variants on the need state, yet most projects attempt to solve the problem with a generic visibility approach. As a result, most projects are not clear in scope, with the implementation of visibility as a “functional extension to existing process” lacking a holistic outside-in approach/strategy to sense, respond, and act.
To illustrate the point, let me share a story. In 2004, I joined AMR Research, a Boston Analyst firm. I volunteered to write a report on supply visibility. I thought it would be easy. My thought was to combine my experience working on visibility solutions with Descartes Systems Group and Manugistics with recent research data. I asked Greg Aimi, currently at Gartner to help.
We ordered pizza and started working on a visibility maturity model. Over the course of the five months, we iterated on the model over seven sessions. In the process, we each had great insights. My personal learning? I thought I knew what supply visibility was, but I was not thinking about it holistically enough. We never published the report. The reason? We did not think that there was a need for more advanced thinking. At the time, a functionally encased view of visibility was sufficient. As I read today’s news, I often think of the sessions with Greg and laugh. What we built on the whiteboard is the solution that we need today.
What Is Visibility?
In our recent survey on analytics, today 74% of companies are attempting to improve supply chain visibility (as shown in Figure 1).
Figure 1. Projects Being Implemented as Part of a Digital Supply Chain Transformation Project
Visibility means many things to different people. As shown in Figure 2, despite major investments, the gaps are large. We are making slow progress on transportation visibility, but not supplier visibility. Too few companies have a holistic approach to embrace the plan, make, source, and deliver together.
Figure 2. Current State of Visibility
The problem with supplier visibility is bookended into procurement processes that have gone back, not forward over the last decade. Procurement processes–encumbered by a focus on paperless processing, RFPs/RFQs, and efficient procurement–do not embrace the capabilities and requirements of direct material sourcing. The secondary problem is the lack of definition of process requirements and a buying team that cannot see past simple MRP/MRP II/DDMRP requirements. There are no value network solutions in the market to enable plan/source/make and deliver visibility holistically. All are self-serving operating on an island lacking interoperability with other network solutions.
What To Do?
The goal for all should start with a clear definition of the term “visibility” and the process definition of what capabilities are required to drive success. Stop deploying “visibility solutions” for “visibility sake” and build a comprehensive plan.
- Adopt Authoritative Identifiers. Cars have VIN numbers, and a candy bar has a UPC. Your wallet has a social security or a passport number. These are authoritative identiers. Today, there are no authoritative identifiers to track and trace for containers, warehouse locations, trucks or manufacturing plants. Close this gap. Actively adopt the GS-1 and ISO-8000 standards and move aggressively on building authoritative identfiers in visibility programs.
- Maximize the Use of Existing Trading Partner Solutions. Survey existing suppliers, third-party logistics providers and customers. Build a map of required interoperability requirements. To move forward educate the team on the differences between integration and interoperability. Use noSQL to build a unified data model across disparate data systems using a rules-based ontology. To accomplish this goal, partner with companies like Aera Technology, Enterra Solutions or UCBOS.
- Embrace Disparate Data. Map the gaps in performance and identify all of the potential data that can help you close the gap. Build solutions to embrace unstructured, streaming and image data. Combine these new forms of data with transactional capabilities to drive new outcomes.
- Build a Digital Twin Using Planning Master Data. Drive plans based on actual leadtimes, conversion rates and cycle times. Actively design the network and measure performance to design capabilities. Constantly tweak and change the design based on network shifts.
- Design an Over-Arching Strategy and Building Blocks. Don’t make the mistake that I did and assume that you know the definition and requirements of visibility. Build a multi-year visibility strategy. Use it to educate your organization.
Figure 3. Visibility Maturity Model
Use of a cross-functional team, build a multi-year holistic plan to drive a strategy to close the gaps for your organization. As leaders, be patient. What sounds simple is not.
Each year, we ask attendees to rate the event based on a 1-5 score (with five being the best). This is our ninth year of the event and achieving an overall rating between 4.7-4.9 from attendees. We archive past events on the Supply Chain Insights Global Summit archives. We make these available for all to share with their teams. We remain committed to open content research and firmly believe that content should never be behind a paywall.
In the program, we challenge functional mindsets and drive discussion on how to improve conventional thinking. Currently, 32% of process-based supply chain organizations report through a manufacturing organization, and there is a need to change functional thinking dramatically. Driving manufacturing excellence without a clear definition of supply chain excellence throws the supply chain out of balance, decreasing customer service and increasing inventory and overall cost.
Visual Artist Representation of the First Day of the Program
In drive value, supply chains must be balanced and aligned to a clear strategy. This is the genesis of the Supply Chains to Admire Methodology. Each year, in the countdown to the summit, we analyze the industry trends and celebrate the winners. This year, the program included presentations from Dollar General, Sleep Number, and Western Digital. Each story represents at least three consecutive years of winning performance on the Supply Chains to Admire Ranking System. Still, none of these companies make the list of popular and conventional rating schemes like the Gartner Top 25.
Figure 2. Leadership Insights
We feel that research, hand-picked speakers, and fun are a winning combination. The event is designed to keep energy high. The program design includes fun runs, yoga, dancing, unique entertainment, and tours. The goal is to build long-lasting relationships. The online presence, hosted by Supply Chain Now, was just as fun as the in-person. This is our goal.
Learning environments for business leaders are rare. Our goal is to deliver an event like no other to challenge the past, spark creativity and drive innovation. We hope to see you at the event next year. Until then, join us for our monthly networking calls, books/reports, podcasts, and blog posts.
See You There?
The 2022 event is in Washington. Land at Dulles Airport and take the shuttle to the Westin Hotel. Save the date for September 6th-8th. We hope to see you there.