Enhancing Visibility to Ensure Supply Chain Success
By Lisa Anderson
As manufacturing rebounds amid continued geopolitical uncertainty, real-time supply chain visibility has become essential to operational resilience. According to the Business Continuity Institute, 72 percent of suppliers who dealt with a breakdown in their supply chain lacked the full, real-time visibility needed to come up with a fast and simple solution. On the other hand, companies that improve visibility can respond quickly to changing conditions and gain insights into what’s coming down the pike so that they can provide superior customer service while growing revenue and EBITDA simultaneously.
Disruptions, Evolutions and Opportunities
Manufacturers are reshaping supply chains to stay in front of changing business conditions. For example, companies are expanding their manufacturing presence in the U.S. to better control their end-to-end supply chain, mitigate the impact of tariffs and position themselves for Amazon-like service without uncontrollable costs and inventories. Other companies are moving towards regional supply chains and/or to Asian countries more closely tied to mutual goals. In addition, geopolitical risks remain heightened, and so companies must stay alert to impacts such as disruptions in the Suez Canal. As supply chains evolve, historical patterns become less relevant and enhanced visibility becomes essential.
Supply Chain Visibility
Gaining visibility into customer demand and incoming supply enables companies to stay ahead of disruptions and changes. By understanding what is on the horizon from a sales point-of-view, companies can better plan to deliver to customers on time and with shorter lead times. Tracking progress from opportunities to quotes to orders and related statuses through the manufacturing and distribution cycles allows planners, buyers and logistics resources to more effectively plan and deliver success. As sales forecasts are incorporated into SIOP processes, demand and supply align to support customer growth and improve operational performance.
Gaining visibility on the supply chain is equally important. Since you are only as strong as your weakest link in the supply chain, you must ensure each supplier remains intact. Our best clients are improving their visibility within the supply chain. There are advanced tools that utilize artificial intelligence, GPS, GIS and geofencing to create predictive estimated time of arrivals (ETA). Beyond advanced tools, progress can also be made by better utilizing ERP system functionality, keeping promise dates updated, and connecting with portals and receiving status from carriers and other supply chain partners. In many cases, improving communication and gaining visibility into suppliers’ bottleneck scan significantly strengthen overall supply chain planning.
Case Study: Enhancing Supply Chain Visibility
A building products manufacturer struggled with on-time delivery to customers after a cyber attack, which happened simultaneously with a significant increase in customer volume due to changing business conditions in the marketplace. Enhancing supply chain visibility was the key to resolving the bottleneck as supplier deliveries, manufacturing schedules and distribution plans were misaligned. For example, production was waiting for critical raw material deliveries and so lost time and wasted materials with extra changeovers. Trucks were either delayed as they waited for products to ship full as production ran behind or were sent non-optimized to the sales branches to meet critical customer needs.
To restore performance, the team implemented a series of supply chain visibility initiatives that increased service levels from the 60 percent range into the 90 percent range, while improving operational efficiency and reducing freight costs. The first step was developing business intelligence reports that highlighted potential past-due orders at each manufacturing site, allowing production planners to adjust schedules before service was impacted. Purchasing was included in the SIOP process and offered visibility to sales forecasts by production facility, which they could translate into commodity forecasts. Customer Service reviewed customer due dates proactively, communicated with customers and provided highlights and exceptions to the planners. The distribution planners utilized the sales branch forecasts and worked closely with the production planners and related groups. A cross-functional team met weekly to discuss visibility, and the SIOP process was integrated into the weekly and monthly routines to review sales forecasts and capacity plans, visibility improved and results followed.
The Bottom Line
As supply chains evolve, successful companies will focus on improving supply chain visibility. The greater the visibility, the more resilient and proactive they’ll become. Since the only constant is change, gaining visibility into changing conditions ahead of time will be essential to serving customers. Companies that plan ahead will pivot faster than competitors — protecting revenue, strengthening operational performance and positioning themselves for sustained profitability.
Lisa Anderson is the founder and president of LMA Consulting Group, Inc., a consulting firm that specializes in manufacturing strategy and end-to-end supply chain transformation that maximizes the customer experience and enables profitable, scalable, dramatic business growth. She recently released “SIOP (Sales Inventory Operations Planning): Creating Predictable Revenue and EBITDA Growth,” an e-book on how to better navigate supply chain chaos and ensure profitable, scalable business growth. A complimentary download can be found at
www.lma-consultinggroup.com/siop-book/.
