Understand how your business objectives set the pace for network design optimization.

Supply Chain Optimization through Visibility

Supply chain optimization depends on your ability to open up the many layers of transportation network visibility.

However, in the wake of a global pandemic where both short- and long-term effects are still emerging across shipping networks, there’s limited value in a rear-view look. This is especially true as North America continues to emerge from a stay-at-home state.

Organizations need a rear-view look, as well as in-depth awareness of current activity and the financial implications. Add contingency scenarios to requirements for companies pursuing supply chain optimization to support the “whack-a-mole” recovery where product demand and service requirements vary widely for customers across different geographies.

In the wake of pandemic, transportation managers determining how to optimize supply chain processes benefit significantly from end-to-end supply chain visibility. Solutions for achieving that visibility are widely available, but not all shipping network optimization solutions are equal. And not all visibility is the same. Your business objectives determine the level of visibility you need to make the best decisions.

What is Supply Chain Visibility?

Supply chain visibility means different things to different people. It covers everything from the physical “Where is my shipment?” to the virtual, like “Which customer/SKU combinations are profitable?” Depending on your role in an organization, you may be more concerned with the operational aspects of visibility or the more strategic. Either way, you need the information you need when you need it.

Beyond physical and virtual visibility separation, there’s the difference between real-time data and real-time access to data. When it comes to data, there is a lot of it, and it is coming from a growing diversity of sources – often separated within your organization by operational and functional silos.

An expanding list of technology-driven solutions offer varying degrees of visibility, and you can gain improved supply chain clarity through internal efforts and external partners. In weighing these options, it is important to consider:

  • Which solution is best for your business objectives?
  • How do you leverage information in business decisions?
  • What investments provides the greatest return?

Supply chain visibility can be complicated. It doesn’t have to be.

Peeling back layers of supply chain visibility, you gain an understanding of the information you need to plan and execute your day-to-day activities as well as adjust your strategy; react to changes that impact performance; and enhance your service to partners and customers.

Visibility and Supply Chain Optimization with Disruption Planning

The U.S. Armed Forces are a role model for logistics and supply chain optimization during crisis. Planning is critical to the military’s risk management focus. To quote General Dwight Eisenhower “Plans are useless, but planning is indispensable.” Companies have to be in a continuous planning mode, as we move through the recovery to account for these shifts in demand.

Effective supply chain planning, like military leadership during crisis, relies on visibility to a single source of information. When you have to go to multiple places to piece a story together, it takes time, and time can be costly.

Organizations that map their end-to-end supply chain create one foundational information source that can support business operations through disruption. As noted by Dr. Yossi Sheffi, director Massachusetts Institute of Technology Center for Transportation and Logistics, this requires supply chain mapping that goes beyond identifying company suppliers. It requires physical locations of supplier plants and warehouses.

A value stream map identifies all supply chain partners and activities to reduce waste, improve network design and optimize transportation cost and service.
Supply Chain Value Stream Map

“For large and complex enterprise with thousands of suppliers around the globe, mapping is a massive exercise that cannot be done on the fly,” Sheffi says.

Likewise, mapping cannot be accomplished without awareness to all activities across your supply chain. Your supply chain network and design optimization depends on your ability gain the visibility required to answer seven important transportation management questions.

Supply Chain Optimization: 7 Questions of Visibility

Peeling into the supply chain visibility layers – the physical (where is my shipment?) and virtual (which customer/SKU combinations are profitable?) – business leaders can uncover data evidence to drive decision-making around optimal supply chain network design.

Where and when?

At its most basic, supply chain visibility gives you physical location of a product in the supply chain. This can include where an inbound shipment is, where you have inventory, or when a shipment will arrive at a customer. When you have this type of visibility, you can make decisions around production scheduling, facility/customer alignment and proactive communication to customers for delivery expectations. Visibility allows the awareness needed to provide the highest level of customer service while maintaining cost control.

Where are the suppliers?

Understanding your suppliers’ geographic location is critical not only to executing a robust network design but also in mitigating risk. Understanding the production and shipping locations of your suppliers during a period of disruption allows you to execute contingency plans developed during modeling exercises.

For instance, when an overseas disruption affects a foreign supplier, maintaining a geographical awareness of primary supply chain partners is vital. Combine location information with advanced understanding of alternative sources and you can facilitate a rapid crisis response that protects customer experience and prevents other breaks in the supply chain.

Where are the customers?

Your customers and their demand drives everything about your supply chain. From the locations of your distribution centers to the shipping options available to meet customer service requirements, having a detailed understanding of the concentration of demand means you can work backwards to develop efficient and reliable options to keep them happy.

Take for example an emerging market in a different region of the country. Customer expectations for delivery are very high. Not providing a high level of service is not an option. Options exist to leverage expedited freight but may make the price point too high or erode the margin on the product. A partner warehouse may be a good option to position inventory to meet service levels without investing in owned brick and mortar.

Where is the inventory?

Your physical assets connect the vendor and customer locations. These assets allow you to position inventory to mitigate risk while providing the service customers expect. Having complete visibility to where and how much inventory you have is critical to making smart sourcing decisions:

  • From which location can I fulfill the order?
    • Is it cheaper to consolidate or split the order?
    • Can I drop ship?

Understanding all of the inventory options available enables you to leverage your vast web of connections throughout your supply and customer base to delight your customers.

Can I access all my data?

Your supply chain generates a tremendous amount of data. Accessing all of it is not easy, especially when you are working across multiple vendors, customer segments, product categories or transportation modes. Consolidating your information across disparate systems and sources is the first step toward gleaning actionable improvement opportunities from your supply chain data. The more access to information you have, the more it can impact your ability to achieve supply chain optimization – and affect your bottom line.

An expert partner with significant technology capabilities can compile disparate data in an accessible repository and provide it in personalized dashboards, as well as apply experience-inspired analysis. Accessing that analysis in the same platform as operational data and tactical execution activities is critical to supporting quick, evidence-based decision-making.

What is Cost to Serve?

For each product and customer, executive leadership needs to understand cost to serve, which reflects all the activities and costs incurred as movement and conversation occurs from vendors through your network out to the customer. Cost to serve metrics provide actionable information by enabling visibility into the profitability of individual customers and products, and finding a fulfillment configuration that balances service and margin.

By utilizing actionable data derived from historical shipment information and running what-if scenarios with regional data and characteristics, you can develop the most responsive and efficient supply chain that meets customer demand for the best cost.

Why is my cost going up/down?

Leveraging robust score cards can provide insight into the factors that are driving your financial performance. Not all drivers are completely controllable. You cannot make your customer order from a different location or change what they want to buy. There is an old adage “you cannot change how other people act, only how you react to them.” The same holds true for the supply chain. Develop plans to react to supplier performance and customer behavior to set up your company for success.

It is absolutely critical to have an unbiased party developing and interpreting the scorecards and information produced. You want objective viewpoints that highlight all options available to contend with dynamics in the marketplace. Not only do you want a view into your data but also what is going on within the market. In the modern environment, it is more critical than ever to leverage every bit of available information across the marketplace.

Combine Layers for Supply Chain Optimization

Physical visibility to shipment, service and costs can be accessed through very basic solutions that exist in the marketplace, some at low or no initial cost. Customization often requires additional investment, and visibility is black and white based on data made available by vendors, clients or carriers. A basic Transportation Management System provides tactical visibility to all of the connections in the supply chain, and it can enable cost savings.

Virtual visibility to all the activities that drive cost, service and reliability allows you to delve into the “what” and “why” around supply chain performance systematically and regularly. This requires investment in people, process and technology. The return on that investment: an enhanced ability to react to supply chain changes that impact performance. You also improve service to partners and customers.

Visibility does not just happen, and it is not free. Corporate alignment from the top down is required to achieve a complete solution. You want knowledgeable resources with broad experience to help guide you.

Open Mastering Your Supply Chain: Layers of Visibility to gain the end-to-end network clarity you need to optimize your supply chain. Read it today and uncover information you need to drive competitive advantage.

5 Tips: Curtailing the Supply Chain Bullwhip Effect

A phenomenon that quickly turns otherwise accurate forecasts into far-reaching supply chain inefficiencies, the bullwhip effect refers to the increasing swings in inventory — in response to shifts in customer demand — as one moves further up the supply chain

Accustomed to seeing ample supplies of diapers, toilet paper, and cleaning products on store shelves, consumers were in for a shock when COVID-19 began to take its toll on the world’s supply chains in early 2020. Although the barest of shelves began to rejuvenate by midyear, there are still some lingering effects (plus the potential for more shortages later in the year and into 2021). 

Blame the bullwhip effect for creating a lot of this chaos and uncertainty. 

“Supply chains allow companies to focus on their specific processes to maintain maximum probability,” Osmond Vitez writes in The Bullwhip Effect in Supply Chain. “Unfortunately, supply chains may stumble when market conditions change and consumer demand shifts.”

Here’s what companies should be doing now to avoid supply chain disruption in the future. 

5 Supply Chain Takeaways for 2021

Under “normal” circumstances, companies invest in extra capacity, inventory, labor and work shifts to minimize the bullwhip effect or to avoid it altogether. The problem this time around is that otherwise routine approaches didn’t work. Demand sensing, forecasting and other forward-looking predictions were equally as ineffective, and mainly due to the unprecedented nature of the global pandemic. 

Here’s the good news: shippers now have boots-on-the-ground experience with a fairly extreme case of the bullwhip effect. Using their 2020 experience as their guide, companies can now prepare for the next potential disruption with a better understanding of the hefty impacts that it could have on their global supply chains. 

Here are five lessons that all companies should apply toward their future supply chain management: 

  1. Communication, data sharing, and visibility trump all when it comes to minimizing the bullwhip effect. One large national retailer, considered to be a leader in supply chain strategy, opened the lines of communication by allowing suppliers to access their inventory data. The result: increased customer satisfaction, a decrease in inventory and warehousing costs, and more stable supply lines.
  2. Third-party logistics experts have proven their worth. Well equipped to handle the logistics, transportation and technology that go into a well-oiled supply chain, experts like Transportation Insight know both sides of the business (i.e., shipper and carrier), and we can demonstrate and articulate how each node in the supply chain will benefit from a specific decision. 
  1. Scenario planning and simulations actually work. Think of them as the “war games” of your own supply chain, use them to run simulations on historical data across different hypothetical scenarios (e.g., if we can’t get raw materials from country A, how will it impact the rest of the supply chain?). Getting the answers to these questions before a disruption occurs will help you be more prepared in the event of a disruption.
  1. Use dashboards and control towers to get big-picture views in real-time. The days when a warehouse manager had to wait until the end of the month for a printed performance report are long gone. Thanks to advancements in technology, the same manager can get that information in real-time and then use it for good decision-making. Being able to drill down into order profits, for instance, will help you better understand what you should actually be charging for shipping. This, in turn, helps support good margin management in any business conditions.
    
  2. Alternate sources of supply are a good thing to have. In surveying 150 senior manufacturing executives, law firm Foley & Lardner found that most expect to make “fairly drastic” changes to their supply chains post-pandemic, including a shift away from just-in-time manufacturing (JIT) and sourcing in China. In Global Supply Chain Disruption and Future Strategies Survey Report, the law firm says that of those companies that were operating in China pre-pandemic, 59% have either already withdrawn operations, are in the process of doing so, or are considering it. Many of those organizations are looking to reshore their operations closer to home in the U.S., Canada, or Mexico.

Depending on how you approach it, transportation can play a major role in avoiding the bullwhip effect in your supply chain. Through good communication and data-sharing across all supply chain partners, you’ll gain an understanding of both real-time and historical information as it relates to all points in the supply chain. The better decisions you can make, the better the odds of avoiding the bullwhip effect.    

Tame the Bullwhip: Manage the Demand Waves

We examine the steps you can take to build a responsive supply chain management system in our latest Supply Chain Masters Series digital event. 

Watch the webinar to learn best practices for collecting, retaining and analyzing supply chain data. We also highlight the business intelligence solutions that drive continuous improvement and proactive strategy adjustment. 

Click the link below to learn supply chain strategies that minimize risk and protect your profitability today and tomorrow.

The Bullwhip Effect: Managing Swings in Demand

The “Bullwhip Effect” is a term often used to describe a phenomenon that quickly turns otherwise accurate forecasts into outdated information, amplifying misinformation along the supply chain. The dust was brushed off this broad concept, and it returned to the shelves not long after COVID-19 began disrupting global supply chains.

“Supply chains allow companies to focus on their specific processes to maintain maximum probability,” Osmond Vitez writes in The Bullwhip Effect in Supply Chain. “Unfortunately, supply chains may stumble when market conditions change and consumer demand shifts.”

That’s exactly what happened when an abrupt change in customer demand plus factory shutdowns put companies in the tight spot of having to forecast demand in the middle of an unprecedented, worldwide pandemic.

With demand for certain items amplified, the tiniest crack of the bullwhip’s handle caused an uncontrolled, snapping motion at the tip of that whip.

Balancing Demand Effects and Available Inventory

“When major swings in inventory occur from panic buying and hoarding, the impact of this sudden demand is magnified as it moves upstream in the supply chain (similar to the way a bullwhip’s thong amplifies in a wave as it moves away from the handle),” Jenny Reese explains in “Preparing for COVID-19 and the bullwhip effect: What happens to the supply chain when you buy 100 rolls of toilet paper?” The customer feels the anxiety of empty aisles, the retailer loses sales, and customer service suffers. “Distributors are left scrambling to determine who should get how much of a given product in a shortage,” Reese continues, “and manufacturers are overwhelmed with sudden, unanticipated spikes in demand.”

With little or no visibility into demand patterns to lean on, many companies wind up flying blind and hoping for the best.

How Does the Bullwhip Effect Work?

Without accurate, accessible, and strong communication across the various partners in the supply chain, the bullwhip effect can occur in any business environment. In a supply chain made up of a factory, a distributor/wholesaler, retailer, and end customer, for example, the retailer and customer tend to be closely aligned. For instance, a customer places an order and a retailer reacts accordingly.

Continue further up that supply chain, however, and that alignment begins to diminish.

Manufacturers don’t always align their forecasts with retailers’ own projections and distributors are, frequently, caught in the middle of two entities that have zero communication with one another.

These gaps widen during events like COVID-19, with even a small variance creating a Bullwhip Effect. In fact, Jay Forrester, who first conceptualized the Bullwhip Effect in these terms, says that even a 10 percent change at either end of the supply chain can result in a 40 percent fluctuation in the middle. That’s when the wheels fall off the cart; all players in the supply chain make quick adjustments to compensate for the problem.

Why Should You Care?

Virtually every organization must address or, at least be aware of, the Bullwhip Effect. Without up-to-date and wide supply chain communication, companies risk having it adversely impact their operations and their customers. Since no organization is an island, even the most vertically-integrated companies should know the signs of the Bullwhip Effect and how to deal with it effectively.

It’s easy to recognize the Bullwhip Effect in retrospect, as customers are cancelling or returning orders that they were clamoring to buy because they bought too much, overestimating their need. In order to meet perceived demands, erratic production, excessive inventory and depletion of resources highlight this effect. During COVID 19, suppliers most at-risk from the Bullwhip Effect included makers and distributors of PPE, hand sanitizer, toilet paper, and other hard-to-find items.

As a Supply chain professional you’ve been exposed to the Bullwhip Effect. The costly consequences materialize quickly and immediately erode your profitability.

Are you able to make informed decisions based on real time data?

Transportation Insight allows your business to make evidence-based decisions. We amass data about your supply chain to give you a comprehensive understanding of your logistics network. Our expertise and tools enable contingency planning through “what if scenarios” that address the Bullwhip Effect before it impacts your bottom line. Transportation Insight monitors multiple key performance indicators that measure your business activity and reveal threats and opportunities to drive continuous optimization of your supply chain.

Tame the Bullwhip: Manage the Demand Waves

We offer more context around the Bullwhip Effect in our Supply Chain Masters Digital Event. Watch the webinar today and learn how you can manage demand fluctuations with a responsive supply chain management system:

  • Best practices for collecting, retaining and analyzing supply chain data.
  • Processes that encourage scalability and readinesss for decline, recovery and even growth.

Learn the supply chain strategies that minimize risk and protect your profitability today and tomorrow.

Plan, Adjust, Communicate with Data Visibility

Shippers with good visibility into all aspects of their supply chain – including suppliers for multiple tiers – can build resilience and agility to lessen the impact of disruptions like global pandemic, natural disaster or political upheaval.

Data visibility, however, is just one piece of the puzzle. Your ability to act on that visibility is the key.

Drive Network Improvement with Data Visibility

Supply chain leaders around the globe are basing immediate action on real-time supply chain information – often captured through emerging supply chain technologies.

According to a recent Oxford Economics survey of 1,000 supply chain leaders, 49 percent – the top 12 percent of respondents – can capture real-time data insights and act on them immediately. Of those surveyed, 51 percent use Artificial Intelligence and predictive analytics to capture information. Although more than 75 percent of respondents recognize the importance of visibility into sustainability practices of their organization and suppliers, few have visibility into either.

While those leaders may realize new efficiencies in tactical execution, truly developing a strategic plan for procuring services and serving customers, requires more than a customized transportation management system.

Visibility End in Mind: Plan, Adjust, Communicate

You can know where to find the load, the inventory or the vendor, but you need technology, tools and talent to execute three steps integral to monetizing that information into cost savings or enterprise growth:

  1. Supply chain visibility is vital to initial network design, as well as contingency planning that may be required during an era of disruption.
  2. Supported by a contingency plan or evidence-based analysis, visibility empowers tactical operators and executive leadership to adjust their strategy to mitigate risk or seize an opportunity.
  3. Close the loop by communicating those adjustments to customers and supply chain partners, and enhance experiences while controlling costs across your supply chain.

Ultimately, visibility into your end-to-end supply chain helps you understand how to pull different levers across your network and increase the return on investment of the whole supply chain.

Real-Time Data vs. Real-Time Access

There’s a big difference in real-time data and real-time access, the latter can be far more valuable because allowing data to solidify can increase accuracy. The most important real-time data is track and trace. Although from the standpoint of being actionable, there is likely limited actions that can be taken to impact it other than communication.

There’s a balancing act between the information you have and the amount of lag time required for the information to be validated and integrated across the reporting. The length of time the data needs to “soak” depends how you intend to use it. You want to be able to correct performance before it gets out of hand, but at the same time you don’t want to make decisions based on incomplete data.

For instance, bidding on an LTL shipment in the TMS, you don’t want your financial reporting to reflect cost until the carrier has invoiced with any additional accessorials applied. Real-time access to your latest data gives you the power to identify trends so you can validate or eliminate services for improved cost control.

Mastering Data Visibility

Deep, multi-layered visibility is a fundamental ingredient in elevating your supply chain to its optimal performance. Solutions for achieving that visibility are widely available, but none deliver greater supply chain mastery than Transportation Insight.

We build personalized solutions that give you visibility to rate savings, optimization opportunities and behavioral changes across the organization that reduce cost and can fund your initial start-up in the process. Executing in those areas, our team leverages transportation technology tools to improve the flow of data to drive ongoing process improvement that generates waste reduction, improves equipment utilization and protects profit margins.

Master visibility across your supply chain with our free resource “Mastering Your Supply Chain: Layers of Visibility.”  Download it today to access the information you need to improve service and achieve monetary savings.

7 FAQs Answered with Supply Chain Visibility

“They have better visibility into the structure of their supply chains. Instead of scrambling at the last minute, they have a lot of information at their fingertips within minutes of a potential disruption. They know exactly which suppliers, sites, parts and products are at risk, which allows them to put themselves first in line to secure constrained inventory and capacity at alternate sites,” concludes Arizona State University professor of supply chain management Thomas Y. Choi.

Peeling into the physical layers (where is my shipment?) and virtual layers (which customer/SKU combinations are profitable?) of supply chain visibility, business leaders can uncover data evidence to drive network decision-making. Combined, information gathered through both layers of visibility answers questions that improve cost control and service to customers.

Where and when?

At its most basic, supply chain visibility gives you physical location of a product in the supply chain. This can include where an inbound shipment is, where you have inventory, or when a shipment will arrive at a customer. When you have this type of visibility, you can make decisions around production scheduling, facility/customer alignment and proactive communication to customers for delivery expectations. Visibility allows the awareness needed to provide the highest level of customer service while maintaining cost control.

Where are the suppliers?

Understanding your suppliers’ geographic location is critical not only to executing a robust network design but also in mitigating risk. Understanding the production and shipping locations of your suppliers during a period of disruption allows you to execute contingency plans developed during modeling exercises.

For instance, when an overseas disruption affects a foreign supplier, maintaining a geographical awareness of primary supply chain partners is vital. Combine location information with advanced understanding of alternative sources and you can facilitate a rapid crisis response that protects customer experience and prevents other breaks in the supply chain.

Where are the customers?

Your customers and their demand drives everything about your supply chain. From the locations of your distribution centers to the shipping options available to meet customer service requirements, having a detailed understanding of the concentration of demand means you can work backwards to develop efficient and reliable options to keep them happy.

Take for example an emerging market in a different region of the country. Customer expectations for delivery are very high. Not providing a high level of service is not an option. Options exist to leverage expedited freight but may make the price point too high or erode the margin on the product. A partner warehouse may be a good option to position inventory to meet service levels without investing in owned brick and mortar.

Where is the inventory?

Your physical assets connect the vendor and customer locations. These assets allow you to position inventory to mitigate risk while providing the service customers expect. Having complete visibility to where and how much inventory you have is critical to making smart sourcing decisions:

  • From which location can I fulfill the order?
  • Is it cheaper to consolidate or split the order?
  • Can I drop ship?

Understanding all of the inventory options available enables you to leverage your vast web of connections throughout your supply and customer base to delight your customers.

Can I access all my data?

Your supply chain generates a tremendous amount of data. Accessing all of it is not easy, especially when you are working across multiple vendors, customer segments, product categories or transportation modes. Consolidating your information across disparate systems and sources is the first step toward gleaning actionable improvement opportunities from your supply chain data. The more access to information you have, the more it can impact your bottom line.

An expert partner with significant technology capabilities can compile disparate data in an accessible repository and provide it in personalized dashboards, as well as apply experience-inspired analysis. Accessing that analysis in the same platform as operational data and tactical execution activities is critical to supporting quick, evidence-based decision-making.

What is cost to serve?

For each product and customer, executive leadership needs to understand cost to serve, which reflects all the activities and costs incurred as movement and conversation occurs from vendors through your network out to the customer. Cost to serve metrics provide actionable information by enabling visibility into the profitability of individual customers and products, and finding a fulfillment configuration that balances service and margin.

By utilizing actionable data derived from historical shipment information and running what-if scenarios with regional data and characteristics, you can develop the most responsive and efficient supply chain that meets customer demand for the best cost.

Why is my cost going up/down?

Leveraging robust score cards can provide insight into the factors that are driving your financial performance. Not all drivers are completely controllable. You cannot make your customer order from a different location or change what they want to buy. There is an old adage “you cannot change how other people act, only how you react to them.” The same holds true for the supply chain.  Develop plans to react to supplier performance and customer behavior to set up your company for success.

It is absolutely critical to have an unbiased party developing and interpreting the scorecards and information produced. You want objective viewpoints that highlight all options available to contend with dynamics in the marketplace. Not only do you want a view into your data but also what is going on within the market. In the new environment, it is more critical than ever to leverage every bit of available information across the marketplace.

Combine Layers for Master Vision

Physical visibility to shipment, service and costs can be accessed through very basic solutions that exist in the marketplace, some at low or no initial cost. Customization often requires additional investment, and visibility is black and white based on data made available by vendors, clients or carriers. A basic Transportation Management System provides tactical visibility to all of the connections in the supply chain, and it can enable cost savings.

Virtual visibility to all the activities that drive cost, service and reliability allows you to delve into the “what” and “why” around supply chain performance systematically and regularly. This requires investment in people, process and technology. The return on that investment: an enhanced ability to react to supply chain changes that impact performance. You also improve service to partners and customers.

Visibility does not just happen, and it is not free. Corporate alignment from the top down is required to achieve a complete solution. You want knowledgeable resources with broad experience to help guide you.

We created Mastering Your Supply Chain: Layers of Visibility to give you greater clarity into your end-to-end network. Read it today and uncover information you need to drive competitive advantage.

The Relativity of the Supply Web


This fundamental truth applies to many aspects of our lives, including how we run our business. It’s a question that logistics managers and technology teams will have to consider when they think about their transformation from a single-direction supply chain to a multi-direction supply web. Does your team have the time to build out a technology suite of value? Or does partnership allow us to save time to focus on what’s best, and drive long-lasting change.

It may come as no surprise that the time you save through partnership may be the most valuable investment of all.

Technology: The Core of Supply Web Change

For manufacturers and distributors, the question on transforming into the supply web comes down to technology. If your current systems don’t provide a deep look into how your supply chain operates, then you could be losing out on data that could provide insight and identify opportunities.

Your team isn’t the only ones struggling with these questions. A recent Gartner survey identified the overwhelming majority of supply chain executives said digital business software and advanced analytics/big data is key to their future business plan, making them a top priority for the remainder of 2020 and beyond.

While this is one of the top priorities for supply chain leaders in the future, the problem lies in building the solution. Creating a custom, in-house solution requires dedicated time and resources from your supply chain, shipping, and technology teams. Taking them away from their tasks means lost man-hours in fulfilling customer demands, which can result in an immediate loss your team cannot recuperate because the time to serve them is gone.

Meanwhile, customers expect their providers to have the technology to identify the most efficient and expedited processes to fulfill orders. If you don’t have that capability, they will go to the next source that does. Can you afford to lose orders because of a lack of supply chain transparency?

Finding Agility and Transparency Through Partnership

Agility in the supply chain is all about being able to react quickly to customer behaviors. Because e-commerce and direct ordering increases are part of our “new normal,” customers demand their packages get to their destinations faster and with full transparency.

There are two ways to achieve this audience demand. The first way is to work with partners who already have the supply chain technology you need to succeed leading to being a better partner to your component and supply chain partners through data sharing and expectation setting.

Your company is already good at providing your core products and services to your audience. Time and money should not be spent building systems that already exist – they should be spent serving your customers and helping them succeed. This is why you need an analytics and business intelligence partner who understands your business, and has both the technology and know-how across supply chains to develop the data and options you need to execute.

This is where a partner like Transportation Insight comes into play. With proven tools that give you the supply chain transparency you need to transition into a supply web, your team can get access to big data analytics and business intelligence tools sooner rather than later. This gives you end-to-end transparency which can help you identify new synergies within your web, including fewer internal touches before shipping, and the potential to drop-ship directly from suppliers.

With this information, your team can be a better partner to your domestic and foreign suppliers. With sales information, time-in-shipping data, and other key performance indicators, you can help predict when you will need to reorder supplies, track trends which can help drive production guidelines, and ultimately create a workflow that keeps your shelves stocked with the right items, and customers happy with the efficiencies of their orders.

Tying It All Together

As the supply chain transforms into the supply web, driving a durable information network will give you the agility and intelligence you need to meet your customer demands. By utilizing a partner to tie it all together, your team can get the insight and transparency you need to make the best decisions for business.

Now and into the future, Transportation Insight is here to help your business grow at the speed of commerce. Schedule a consultation today to learn how we have the tools and skills needed to save time and save money.

Business Objectives Determine Supply Chain Visibility Needs

However, in the wake of a global pandemic where both short- and long-term effects are still emerging, there’s limited value in a rear-view look. This is especially true as North America emerges from a stay-at-home state. Organizations need a rear-view look, as well as in-depth awareness of current activity and the financial implications. Add contingency scenarios to requirements for companies pursuing supply chains that can support the emerging “whack-a-mole” recovery where product demand and service requirements vary widely for customers across different geographies, depending on ebbs and increases in COVID-19 infection and business closure.

COVID-19 brought greater attention to the value of end-to-end supply chain visibility. Solutions for achieving that visibility are widely available, but not all solutions are equal. And not all visibility is the same. Your business objectives determine the level of visibility you need to make the best decisions.

What is Supply Chain Visibility?

Supply chain visibility means different things to different people. It covers everything from the physical “Where is my shipment?” to the virtual, like “Which customer/SKU combinations are profitable?” Depending on your role in an organization, you may be more concerned with the operational aspects of visibility or the more strategic. Either way, you need the information you need when you need it.

Beyond physical and virtual visibility separation, there’s the difference between real-time data and real-time access to data. When it comes to data, there is a lot of it, and it is coming from a growing diversity of sources – often separated within your organization by operational and functional silos.

An expanding list of technology-driven solutions offer varying degrees of visibility, and you can gain improved supply chain clarity through internal efforts and external partners. In weighing these options, it is important to consider:

  • Which solution is best for your business objectives?
  • How do you leverage information in business decisions?
  • What investments provides the greatest return?

Supply chain visibility can be complicated. It doesn’t have to be.

Peeling back layers of visibility, you gain an understanding of the information you need to plan and execute your day-to-day activities as well as adjust your strategy; react to changes that impact performance; and enhance your service to partners and customers.

Visibility, Mapping Key Disruption Planning and Continuity

The U.S. Armed Forces are a role model for logistics, and planning is critical to the military’s risk management focus. To quote General Dwight Eisenhower “Plans are useless, but planning is indispensable.” Companies have to be in a continuous planning mode, as we move through the recovery to account for these shifts in demand.

Effective planning, like military leadership during crisis, relies on visibility to a single source of information. When you have to go to multiple places to piece a story together, it takes time, and time can be costly.

Organizations that map their end-to-end supply chain create one foundational information source that can support business operations through disruption. As noted by Dr. Yossi Sheffi, director Massachusetts Institute of Technology Center for Transportation and Logistics, this requires supply chain mapping that goes beyond identifying company suppliers. It requires physical locations of supplier plants and warehouses. “For large and complex enterprise with thousands of suppliers around the globe, mapping is a massive exercise that cannot be done on the fly,” he says.

Likewise, mapping cannot be accomplished without awareness to all activities across your supply chain.

Mastering Supply Chain Visibility

Deep, multi-layered visibility is a fundamental ingredient in elevating your supply chain to its optimal performance. We created Mastering Your Supply Chain: The Layers of Visibility to help you uncover ways that your supply chain information can have a transformational impact on your bottom-line performance and your customer service.

Inside differentiate visibility options in the marketplace to help you identify solutions that best fit your needs. Read it today to learn more about how individualized technology solutions give you visibility to rate savings, optimization opportunities and behavioral changes across the organization that reduce cost.

Engineering and Analyzing the Supply Web

As an example, sourcing from multiple producers across your web can add inbound shipping costs on all modes: ocean freight, multi-modal inbound delivery and outbound shipping. If your company decides to offer direct fulfillment as a service, can you identify how much additional shipping and handling costs affect your bottom line?

Moving to a supply web model is not an overnight experience. Rather, it is a process that involves understanding how all the pieces work together, how they can drive improved revenue and how to best share information and work hand-in-hand with your partners.

Becoming the Conductor of the Supply Web

When you consider managing the supply web, think of the work an orchestra conductor must do before a symphony performance. At the center, the conductor leads multiple parts that must work together to create art. Although each individual section can create beautiful music on its own, one slip from the brass, strings or percussion and the sound of the entire symphony is broken. Only by building up each part’s strengths as a collective whole can the conductor get everything performing in harmony.

In the context of the supply web, logistics leaders are the conductors, bringing multiple pieces together to create symbiosis across each part. This requires analysis on multiple metrics, including profitability by SKU category, customer types and service levels.

Without a knowledge of how granular cost components affect the supply web, you can’t achieve cost savings in both order and promotion management. Good shippers put multiple pieces together to get their supply webs operating in line, including linking order data with carrier billing data, and tracking SKU-level and order-dimensional profitability. Understanding each metric can help your supply web perform on cost targets and with more efficiency – exactly like a well-tuned orchestra ready to perform.

Engineering for Data-Forward Supply Webs

The transformation from a single-source, lowest-cost supply chain into a supply web presents the prime opportunity to start gathering previously inaccessible data from your supply network. By building in the capability to accurately determine production, storage and shipping costs at granular levels that support cause and effect analysis, your company is prepared to identify cost factors that ultimately affect performance.

This is a two-step procedure, requiring deep insights on both shipment sizes, as well as carrier analysis.

Regular investigation of network costs can help you recognize where increases are occurring, and why they are cutting into SKU-category profit. Gaining visibility and taking a deep look into each cost category gives you a deep understanding of where your costs are, and how to control them.

Furthermore, understanding costs today can help you navigate around operational peaks and valleys. With regular research into your procurement and shipping habits, you can maintain costs and drive additional value.

Bringing the Supply Web Together

Simply put: operating in a supply web model gives you visibility into your operations like never before. Operational redundancies, a deeper understanding of SKU-level profitability, the ability to adapt with changes in consumer behavior and demand, and ultimately managing costs through continued improvement gives you the opportunity to compete at a higher level. When they all operate in harmony, the supply web offers a prime opportunity to drive your business forward and use logistics as an overall competitive advantage.

Transportation Insight can help you evolve from the supply chain into the supply web, using our logistics mapping skill sets and LEAN methodology. Contact us today to start your transformation.

Building Lasting Data Partnerships in the Supply Web

While the term quickly caught on and became a conceptual breakthrough, it contained one inherent flaw. The term suggests components move in sequence from source to destination. Technology and availability have evolved and changed over the last 38 years, presenting options that were never available before.

Oliver expanded on the supply chain idea in 2013, writing “When Will Supply Chain Management Grow Up?” for Strategy + Business. His conclusion is a sound argument for evolving into the supply web: “Constraints continue to be broken by supply chain innovators, but new constraints always emerge, presenting opportunities for the next generation of innovators.”

If your company is still focused on a single lowest-cost supply chain supplier and transport partner, it’s time to broaden your horizons. Understanding why the supply web is a natural evolution of supply chain management can help you become a better partner with suppliers and customers, and ultimately prepare your organization to meet consumer demand.

Harnessing Success Through Partnership

One of the incredible advantages of the supply web is in the data that provides. Utilizing a larger logistics network for sourcing and distributing to customers gives you a much broader view of not only industry trends and demands, but also how your partners’ networks can support your service strategy.

Excellent partners not only have insight into their networks but share the insights with other supply web nodes to the benefit of all. With both incoming and outgoing freight, shippers who lean into the supply web can leverage the appropriate node to fulfill demand with a balance of service, risk and cost.

This is only achieved by collecting data across your supply web, starting with your sourcing partners and sharing your own. By understanding production cycles and setting expectations, and supporting better decisions by your product providers, you can drive topline revenue to new heights.

The Supply Web From the Data Lens

Data collection and information sharing is critical to successfully managing the supply web. Each of your partners possesses data that can help identify patterns, analyze time in transit, and ultimately create workflows that improve efficiency at all stops.

Let’s consider the following scenario: a distributor sends a widget to several customers and end retailers throughout the year. Although it’s in demand throughout the year, most orders for this widget come during the autumn months. The distributor obtains the widget from three sources – two overseas and one in the northern hemisphere.

This is where data understanding is critical to success. With two overseas suppliers and one closer to home, the company always has a reliable source for widgets – especially during peak season – and it can obtain them from at least two partners when one is down due to holidays or planned work stoppages. Keeping lines of communication open with each supplier helps the company plan for inbound transportation and labor needs.

The inbound data can then be shared with customers and strategic partners to set expectations and manage order volume. In turn, customers will be happier because the improved communication of options supports their own planning. This data can also be used to identify efficiencies that aren’t based on fixed nodes. For instance: if a customer receives an order for the widget and is geographically closer to your facility, the data findings can help determine if drop-shipping to the end customer is a better option than shipping to a partner, before going out to that same consumer.

Using Data to Make the Supply Web a Competitive Advantage

At the end of the day, data is your most powerful currency. If you can identify patterns in the supply web and align them with the best logistics network, you can create a better experience for the end customer. The best companies utilize the information from supply web operations to ensure inventory is in the best places to serve customers.

Are you utilizing the supply web to its full potential? Between supply network models, flow mapping and LEAN principles, your company can drive success at all touch points within your network. Our supply web masters can help you drive success and create efficiencies that you never knew existed. Contact us today.

How the Global Supply Web is Taking Over for Supply Chains

Over time, supply chains became more complex. Advancements in technology and navigation allows larger ships to enter ports and transport more goods with each pass. Aviation opened the door for faster trade, with critical items arriving to their destination in hours instead of days. As the internet came online for everyone, computers allowed us to track our freight in motion.

However, what hasn’t changed is our reliance on lowest-cost, single-source supply chain strategies. Although organizations of all sizes have the opportunity to map ideal networks and identify origins that balance cost with service, many companies remain fixated on having one supply chain, instead of sourcing through a supply web.

As technology gives us more tools than ever before, it’s time to break the supply chain. This period of COVID-19 disruption provides the perfect opportunity to make a transformation toward a supply web that will drive sustainable success in the future.

What happens when supply chains get too lean?

Before we turned the clock to 2020, supply chains around the world were very lean. That is: companies would order just enough inventory from overseas and relied on a soft market to get good prices on regular freight shipments.

When the Coronavirus disruption started, some businesses were unaffected. Because of the planned Chinese New Year shutdown, many ordered extra inventory to cover them through the two-week break. As the pandemic spread and disruption expanded, we started discovering the weakness of a lean supply chain: The most in-demand items, like personal protective equipment and cleaning supplies, ran out quickly, forcing new suppliers to ramp up production not out of opportunity, but out of necessity.

Although the global disruption is providing a healthy correction on inventory, it also illustrated why companies need to develop a supply web for critical components. Organizations that relied primarily on Asian sources are experiencing a much slower recovery due to the extended shutdown of Chinese factories , combined with month-long lockdowns declared by other countries in the region.

Today, sourcing must take a multi-region approach. Those companies that took a multi-region approach are able to recover faster because they were not dependent on a single supply chain. While there is no “perfect” model to prevent sourcing disruption, creating an inbound supply web can help reduce challenges. By relying on alternative network strategies mapped during contingency planning, companies can bring in components from multiple continents and experience a faster recovery and return to production and distribution.

Creating and extending the global supply web

Identifying global sourcing opportunities is only the first step in creating a robust supply web. If your previous supplier base was only in China, do you have the infrastructure available to expand beyond Asia?

Take this moment to think about how a physical web works. A web retains its strength because the tension is spread out across several anchor points and supported by internal joists between each key line. The strength of the center hub is all based on the web’s construction and proper tension at the anchor points. Build on a weak anchor, and that corner of the web could be ripped out entirely. If the internal supports aren’t strong, the web will be ineffective at best, creating a liability at the center.

The supply web works in a similar manner. Inbound “anchor” suppliers must be strong enough to support the web as a whole, while the internal “support” comes from robust transportation networks. If you rely on a lowest-cost, single-source for all your components, it can be cut off from one single support. If you only have one mode to move that freight, any industry change or a drop in partnership can cut off component movement, weakening the web as a whole.

Just as you have to think about diversifying the web for strength, distributors also need to build an equally flexible transportation system. The best systems are set up with the ability to assign preferred mode and carrier to any order at any location, ensuring the best possible contract rates.

Managing the supply web beyond your base

What does it take for a distributor to build a robust supply web? It starts with network modeling and mapping. Companies that o create multiple models to react across scenarios have more flexibility in both operations and costs. A mapping exercise allows organizations to identify best-in-class carriers and consolidation strategies that not only improve efficiency, but implement future solutions faster.

Network mapping also allows distributors to identify efficiencies they may not see within their web. As more consumers stay home and rely on e-commerce for their daily needs, a network model can identify cost-saving direct-to-consumer strategies, including distribution center fulfillment and drop-shipping from partners to reduce waste.

Creating the right network builds businesses that can outlast any disruption and continue to serve customers with the best possible solutions. How can we help you create the best network map and evolve into a supply web? Contact us today.