Media Coverage
I Can’t See
Robert Malone, 30 August, 2006, 11:00 AM ET
There are many issues on the radar screen for supply-chain managers—probably too many. The ones that are most important according to an in-depth report by the Aberdeen Group are not necessarily those that would come to mind first. According to the report, the most important is supply-chain visibility—chosen by nearly 80% of the respondents.
The report was sponsored by IBM, TradeBeam, Sockeye Solutions and Management Dynamics and reflected responses from over 150 enterprises.
“It is a bit shocking that things are not as automated out there as they could be,” says Beth Enslow, senior vice president of enterprise research at Aberdeen, a veteran of supply-chain research and strategy development and author of the report. “Good visibility translates into faster cycle time. It frees up cash and can create inventory buffers.”
The most heavily used software in manufacturing companies has been Enterprise Resource Planning—traditionally directed at internal processes and not at external or global trade processes that involve an extended supply chain. The result is blind sides to the supply chain. It is, for the most part, a result of the lack of electronic technology application. Despite the fact that visibility is less than well practiced within the supply chain now, Enslow says, “There is good news. There are now opportunities to solve the visibility problem with products like those from TradeBeam and other on-demand suppliers like SAP that have their own versions of a visibility application.”
If ranked by the level of pain, the Aberdeen Group report suggests that the No. 1 concern of companies is the lack of critical supply-chain-process visibility due to their processes being manually and not automatically driven. Some 51% of their respondents chose this as one of their top three concerns. The second most important issue was the uncoordinated multitier supply-chain process that leads to an imbalance between supply and demand. The third concern was trade compliance—to ensure flow of goods across borders and gaining preferential trade agreements. The No. 4 issue was risk management in order to establish a form of resiliency when confronting supply-chain disruptions.
The report differentiates levels of visibility as to what companies actually track. In the first level of basic tracking events, the report lists in order of actual tracking:
- Order acknowledgement matches the purchase order
- Advance shipment notice created
- Projected production plans
- Customs clearance
- In-transit status events at shipment level
While among tracking events of an advanced nature the most frequently tracked were:
- Advance shipment notice matches purchase order
- Supplier production process events
- Electronic proof of delivery
- Carrier pickup of goods
- Raw material arrival at supplier
- In-transit status events at order line level
In time, all visibility-related tracking events will be a core part of the enterprise that trades. They all affect each other, and omission of one can mean late or no delivery, lack of competitive advantage, added cost and an inability to have sufficient data to take the next step. It really comes down to as Enslow says, “A matter of keeping your customers or not keeping your customers.”
