Abstract
The concept of visibility is often associated with seeing everything that is going on across an entire supply chain. The following chapter takes a close look at the current understanding and practice of supply chain visibility to establish what it means and how the concept is applied in organizations today. It investigates current problems and introduces an innovative approach to supply chain collaboration that allows all participants in a process to work together, eliminate manual communication and coordination, and achieve higher efficiencies than any one company could reach on their own. The chapter includes several practical examples and illustrates the benefits of collaboration through a real-life business case.
TopIntroduction
In this chapter, we investigate several topics to ultimately address one question: How can companies dramatically increase the effectiveness and efficiency of transportation and supply chain processes? The past few decades have seen great increases in technological maturity. Today nearly all aspects of our lives have either been digitized and automated or are about to be. These capabilities range from controlling the air conditioning in our home to monitoring our well-being in real time. We have digital access to more knowledge than any previous generation in history, and yet, supply chain execution has not reaped many of the same benefits stemming from these technological advances.
In essence, we still ship things from one place to another as we have for millennia. The parties that have the most to lose—recipients, shippers, and 3PLs—are often least in control. Once freight leaves their dock, they become vulnerable to any disruption, error, or exception that may occur. Many are constrained and blinded by outdated systems, a lack of data sharing and control during the execution of supply chain processes, and a lack of accountability. Today, 95% of all transportation processes are still handled to a large degree through interpersonal calls, emails, and conversations, and are often accompanied by redundant data inputs. Many of the systems we use cannot connect different organizations quickly or efficiently. When APIs are used, they are typically expensive and time-consuming to build and as such are only implemented for the largest payloads.
A solution that addresses these issues effectively must rely on supply chain collaboration. It allows for higher levels of process control and can instill trust through the use of new technologies such as blockchain. Other important aspects include the motivation of operators to actively share vital information that would otherwise be lost. Collaborative supply chain systems need to augment and enhance rather than replace existing ERP and TMS systems or GPS and ELD devices, or even iPaaS platforms. Any solution must fit perfectly in-between planning and execution feedback systems in order to dramatically improve performance as a whole. In the end, everybody engaged in the execution of a supply chain process needs to reduce risk and save time and money while providing higher levels of customer service to ultimately grow revenues. The objective is that everybody wins.
Why the Current Understanding of Visibility is Flawed
Throughout history, knowing one’s location has always been of strategic importance. Military campaigns and commerce have always depended on it. Without knowledge of where you are, you are hardly in a position to reach your destination. In fact, it was important enough that in 1711 the British Parliament offered the then astronomical sum of £20,000 to the first person to invent a method of establishing one’s position. The challenge was to find a practical solution for sailors who routinely got lost at sea. A gentleman by the name of John Harrison, who was a clockmaker rather than an astronomer, ultimately created a chronometer that won the prize.
Things have obviously progressed since the days of traditional seamanship. We have even come a long way from the early 1970s, when Navistar launched its first satellite for a global positioning system.We rely on location more than ever, be it on our phones, in autonomous vehicles, or on commercial trucks. Leveraging highly accurate latitudinal and longitudinal data is a requirement for many applications. GPS systems for example allow us to not only provide guidance to drivers but also establish the location of products being transported on trucks, railroads, ships, or planes. By knowing the location of a transportation asset, we can deduce when freight will arrive. This information is of vital importance in many subsequent processes ranging from manufacturing runs that depend on just-in-time materials to retailers who may need additional stock while running promotions or selling prized items such as iPhones or game consoles.
However, a long-standing issue has been falsely equating location with visibility. A whole industry has sprung up over the past 20 years that sells GPS receivers to solve problems such as knowing when a truck is stuck in traffic or how many hours a driver can spend on the road. Yet, these receivers do not address many other issues such as knowing the condition of freight, sharing of freight documents, or planning information. Nor do they eliminate the myriad of emails, conversations, calls and redundant data inputs that all occur when a shipper transports freight. In essence, the where and when of a thing only captures a fraction of the required data that is needed to attain efficiencies that are possible today.
Key Terms in this Chapter
Radio-Frequency Identification: (RFID): Electronic identifiers that can be attached to assets and objects so that they can be uniquely identified when scanned by an antenna connected to a system that reports the scan to backend systems.
AI-based Route Optimization: The dynamic optimization of truck routes along multiple stops, often referred to as milk-runs, for several parallel vehicles based on a wide range of variables.
Internet of Things: An approach to data collection that often leverages sensors wirelessly connected to backend systems to obtain information about the state of assets and objects.
Supply Chain Visibility: An approach to notify parties involved in the execution of a supply chain process to when exceptions occur, or corrective action needs to be taken.
Organizational Silos: The isolation of individual companies and organizations from others because they are not connected to one another. Each organization runs its own systems, has its processes, procedures and policies, and maintains its own resources, which leads to manual interfaces between different organizations.
Supply Chain Collaboration: An approach for all parties involved in the execution of a supply chain process to work together, share data and updates without the need for application programming interfaces (APIs) or electronic data interchange (EDI).
Blockchain: A technology that enables an immutable ledger for the documentation of supply chain data that is accessible to many different parties and provides a shared data store for all.
Collaborative Dashboards: A technology that allows more than one party involved in the execution of a supply chain process to share data on a dashboard. Each party has their own dashboard and the data that is shared is displayed to all parties in the same way.