August 12, 2020
Avoiding breakdowns in the sharing of supply chain information
The incredible disruption impacting supply chains this year has intensified the need for digital visibility and collaboration. Without end-to-end supply chain visibility, there’s no easy way to mitigate risk from facilities to suppliers, to suppliers’ suppliers.
Supply chains are complex networks that can break if any part becomes disconnected from consumer demand. Companies relying on spreadsheets, phone calls, and email for supplier communication and inventory management are likely to endure greater disruption due to a reliance on outdated data. As people become overwhelmed with update requests, companies have no clue as to the magnitude of problems. Without a shared digital platform for exchanging data, strategic decision-making capabilities are lost.
Other risks for companies involve single threaded sourcing, which is a bigger issue when faced with unprecedented events like a pandemic. As major events unfold, the first area of focus is visibility and collaboration with the key Tier-1 suppliers. Retailers or brands must be able to verify a supplier’s production existing stock at a supplier’s primary fulfillment center to determine if they need to move orders or production to other locations.
As shortages and capacity issues arise, one should collaborate with suppliers on allocation ranking to further understand where in the pecking order your company fits within the greater direct-to-consumer (DTC) market. Once inventory is available, downstream nodes become potential breaking points. If the product originates overseas, the ocean carriers must be capable of delivering the goods. Retailers need information to questions like “Are shipping lanes open? Does the port of entry have capacity? Are trucks available to take the load to the distribution center?” Each step in the product’s journey requires well designed alternative plans to minimize disruption.
As product arrives to the warehouse, visibility into the capacity of receiving, put-away, storage, picking, becomes even more crucial. If demand for an essential product is high and the warehouse is open, but the retail warehouse lacks capacity to receive all the trucks, or not enough labor to fulfill orders, this creates additional delay to stores.
The same need for visibility and collaboration holds true for trying to get inventory into various countries. For example, exports to Chinese stores may be delayed at first as they work through newly established protocols, but as countries reopen and consumers are ready to shop, supply chain issues may arise in the same way around carriers, warehouses, and stores. The timing and magnitude of supply chain difficulties will vary by region, country, state and city, making the need for a digital platform with artificial intelligence a critical need.
Enable decision-making with real-time supply chain visibility
Companies poised to survive have invested in a digital platform where all supply chain activity can be monitored in real-time with control center technology pushing problems to the top for resolution. Initially, retailers and brands can collaborate with suppliers on future orders to determine if any capacity concerns exist. When a platform is utilized by all parties, suppliers can collaborate on quantities and order dates—even providing a peek upstream into production.
Once confirmed, production is tracked versus commitments. When orders are in-transit, a visual dashboard displays global shipments, in real-time, across various transport modes as vast amounts of transactional data from carriers and GPS across multi-legs, modes, and hand-offs populate the control center.
Machine learning models dynamically assess the routes to update the estimated time of arrivals into interim points and the destination. With geo-fencing, exceptions are triggered in real time, allowing for a proactive resolution.
The innovative digital supply chain platforms of today provide the real-time visibility across a single view of inventory movement whereby the retailer, supplier, and their suppliers can collaborate on supply and demand. When exceptions arise, partners can work together to orchestrate the best response.
The keys to a resilient supply chain are risk management, relationship building with suppliers, and an ability to react and recover as quickly as possible when unforeseen problems arise. With today’s technology, retailers can easily adopt a foundation of machine learning and AI for visibility and problem resolution. Without a centralized platform for communication, retailers result to putting out individual fires instead of modeling global scenarios to create a strategic business continuity plan.
For additional strategies for building the resilient supply chain needed for the Retail Revolution, download the complete Supply Chain Resiliency Best Practices Guide.