Just as COVID-19 vaccine distribution efforts began helping the global economy emerge from the economic impact of the pandemic, the Suez Canal disruption hit. Now that the Canal is open again, the global supply chain is adjusting to yet another “black swan” event – and recognizing the need for end-to-end supply chain visibility.
Those suppliers not yet utilizing supply chain visibility are facing a common scenario: If your goods were stuck at a port, in transit due to pile-ups, or faced unavailability of carrier space, knowing where your shipment is, whether it is being maintained in the right condition and whether all your goods are intact would have made all the difference to minimizing your disruption and allowing you to plan better in the weeks following the disruption.
Even on a perfectly sunny, smooth-running logistics day, however, supply chain professionals continually face thousands of “mini-disruptions” that may not make the headlines. They include delays, missed connections, condition excursions, tamper, counterfeiting, or packages left behind.
The combined impact of these mini-disruptions can add up quickly and generate the same detrimental business impact in a month or a year, that the Suez Canal blockage event created in a day. Think of these mini-disruptions as you would look at hypertension, diabetes, or atherosclerosis - it gets to you one day if you do not address it today.
Lloyd’s List estimated that more than $9 billion worth of goods pass through the 120-mile Suez Canal waterway each day, translating to around $400 million per hour. Even if your goods were worth 1000th of that volume, and just 1% of that faced disruption, that would translate to an impacted portion of inventory (working capital) close to $96,000 a day or about $35 million a year.
And that’s where end-to-end supply chain visibility becomes your solution, to mini-disruptions and black swan events alike.
What is End-to-End Supply Chain Visibility?
The term “end-to-end” is often used to describe coverage. It is often referenced as visibility from node to node, door to door, origin to destination, or from the manufacturer to the end customer. However, I believe this is a myopic definition!
True end-to-end supply chain visibility has a second dimension that is not often spoken of.
This second dimension is the completeness in value that you receive by knowing what is happening from origin to destination in your supply chain network. It is about whether the visibility you receive is readily actionable. Is it easy to consume and make critical decisions on the go? Do you trust it enough to trigger business workflows and guide frontline response to automate your logistics?
Bill Gates famously said, “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.”
This thinking applies well to end-to-end visibility technology.
Thus, end-to-end visibility is one that is reliable, actionable, and covers you from origin to destination. This can only be achieved through a combination of sensor-driven signals, analytics, and smart intervention.
Why is End-to-End Visibility a Must on a Sunny Logistics Day?
If you are able to achieve this kind of visibility, here’s how you can leverage it toward transforming your business operations and reducing response time, even for the day-to-day mini disruptions that antagonize efficiencies, customer satisfaction, and predictability in your supply chain.
1. On-Route Dynamic Logistics Planning & Monitoring
Planning needn’t be a week or month-ahead exercise. You can plan and re-plan dynamically if you have precise visibility of demand signals at each of your receiving nodes and ETA on your inventory in transit.
Land shipments typically take anywhere from 1-10 days to reach their destination. Shipment through air mode is widely considered to be quick, but with the first mile and last mile in consideration, it takes anywhere from 3 to 15 days.
Many shipments are miles away from their destination when a disruption occurs.
Sensors that create a single visibility thread across a multi-touch chain of custody are used by many Global 500 companies to make real-time, data-driven decisions on replenishment dispatches, storage, and nodal re-distributions.
Visibility and data analytics drive decisions on which lanes to use based on the type of material shipped, which airports/ports are open, and where the choke points are to plan the least path of resistance.
2. In-Transit Cold Chain Monitoring & Excursion Management
Temperature-sensitive products (think chocolates or vaccines) face two problems related to condition:
- Whether the product is still stored in the right conditions in transit, at a port, airport, or warehouse when a disruption occurs.
- Whether the containers have enough power-backup or fuel to keep the goods refrigerated till things normalize.
Healthcare and consumer goods companies are using first-hand visibility from IoT sensors and recommendations from control towers to either wait, re-route, or backhaul the goods, saving valuable product cost and maintaining brand quality promise.
3. Protecting High-Value Inventory In-Transit
How much would a Porsche 911, Mercedes CLK, or Audi A8 cost you?
Now imagine 15 of these stacked in a container, and hundreds of these containers parked on the side of a freeway or rest area for weeks due to a disruption, either on the way to a port or on the way to their final destination.
It takes just one major incident for insurance premiums to rise for the entire following year.
Therefore, companies in the luxury automotive space are leveraging real-time data and analytics about their trucks and goods safety via listening to risk signals that could impact the safety of their goods. Purpose-built sensors offer additional perspective into when and where a container door is opened or closed in real-time.
When this is combined with current location awareness, chain of custody information, route history, past risk trends, a dependable safety alarm can be sounded to mobilize field teams to avert risk, just like your phone GPS tells you when you will reach work.
Check if Your Supply Chain Visibility Solution is End to End
The ultimate objective is to thrive despite uncertainty!
Wolfgang Lehmacher, former head of supply chain at the World Economic Forum, explains it well in a book we co-authored called Smart Supply Chain Decisions in the New Normal: “Those who are unprepared to make these decisions based on data will be challenged to even survive; those armed with critical visibility and insight to make fact-based real-time decisions will thrive in this new environment.”
There are a multitude of “tracking” solutions on the market – but as detailed above, simply knowing where your shipment or asset is located isn’t enough, not when so much more data is available. When considering a supply chain visibility solution, look for these functionalities:
- Reliability of visibility data
- Ease of access to visibility
- Visibility coverage: door to door, indoor, outdoors, and at third party locations
- Maturity of events portrayed (is it just a location pin or is it an actionable signal?)
- Analytics depth
- Ease of automating incident management & planning
If the past year has taught us anything, it’s to prepare for the unexpected – and the more you know about every step of your supply chain in multiple dimensions, the greater the likelihood you’ll weather both day-to-day and black swan events successfully.
Article originally posted on www.mhlnews.com
