Visibility the cornerstone of any supply chain improvement
Speakers from across the line-up of the recent Reuters Events Supply Chain Europe Virtual 2020 Summit were adamant that progress in supply chains is being built on the back of wide-ranging visibility
“Even before COVID, I think visibility is a key requirement to becoming more flexible and resilient,” said Sebastian Rudolph, Head of Country Supply Chain Management Europe for Panasonic Business Support Europe at the Supply Chain Europe Virtual 2020 Summit.
He sees a real need for end-to-end, real-time visibility across “a fragmented landscape of service providers and suppliers that we work with and to get that to a high level because one of the things that we struggle with is to get the full visibility to a level where it is stable and high enough to really rely on that information. For example, if I only have 80% visibility it is a bit like having a traffic light that only shows the right colour 80% of the time. Would you trust that traffic light to cross the street?”
The more complex your supply chain is, the more complex the points you have to connect
Knut Alicke, Partner at McKinsey & Co, agreed that it is a matter of urgency “To push digital. Everyone says this has pushed us between six months to five years ahead from where we were before”.
Even so, there are plenty who aren’t there yet and have a huge amount of work yet to do, even at the highest level. As Rudolph states: “The more complex your supply chain is, the more complex the points you have to connect.”
One very important way to restart was to have the digital tools, to have a control tower over all the suppliers
Jean-François Salles, Global VP, Supply Chain Management at Renault-Nissan-Mitsubishi Alliance, found complexity in supplier networks to be the issue when they began to piece together production after the most severe lockdowns had been lifted. “The challenge for these networks of stakeholders was to restart and then resynchronise all the activities. Frankly speaking, not everyone was ready to do that. One very important way to restart was to have the digital tools, to have a control tower over all the suppliers,” he said.
Oscar de Bok, CEO of DHL Supply Chain, emphasised that they too are working on tools to address the gap: “We also have ‘My Supply Chain’, which is our one-stop-shop for integrated warehouse and transportation insights and that actually enables our customers to take instant decisions on supply chain adjustments. It gives customers a view on warehouse positions at a warehouse level or their statuses across the whole network.”
These tools will become increasingly critical, but it is also important to put in place management and leadership structures that can utilise this kind of visibility properly, otherwise it is a wasted endeavour. “During the crisis we reinvented ourselves in the way supply chain planning was conducted,” noted Salles. “It was probably going from a monthly basis to a weekly basis and to develop new tools to improve the visibility of goods in all the networks.”
Data determines action
In an age of risk, data is a critical component in reacting to crises and getting ahead of the curve. “If you look at what is going on around the world there are port strikes, there are typhoons, there are hurricanes and all of that has an impact on our customers’ cargo. So, what we sought to do is to ensure that all of our teams had the most up-to-date information that we can give them to the minute on business resilience and, in turn, it would allow them to proactively make decisions for customer cargo that had an efficiency,” explained Saskia Groen-in’t-Woud, CEO of Maersk subsidiary Damco.
Fast decision making is absolutely crucial
“Fast decision making is absolutely crucial,” agrees Carsten Rasmussen, COO of global toy brand Lego, but that can only really happen with data underpinning. “We need much more analytics in that field and predictability from a big data perspective … You simply cannot do it manually anymore.”
Josephine Coombe, UK Managing Director of Nulogy, also sees manual data processes slowing things down and hampering a response to an extreme event, such as COVID-19. “What has happened since then is that the co-packers who have agility built into their operations…. Have been able to accommodate the disruption more efficiently than those hampered by manual processes or spreadsheet-based systems.”
Rudolph has found that “in Europe a lot of the logistics activities are still quite paper-based. I would say 60% to 70% still carry papers around with them that get signed.” This, and the reliance on partners to input data creates issues, as do legacy systems. Legacy systems were noted by 53% of the audience polled at the summit as the biggest barrier to digital transformation.
The link-up between Nissan and Renault could have created difficulties due to legacy systems said Rudolph, but these were overcome, he says, “simply through the sharing of data, the use of data and the exploitation of data.”
We are going to be seeing a lot more investment into the cloud, and a focus on digital supply chains and digital networks to build that flexibility, that adaptability into those future supply chain and IT infrastructures
“When you are moving production or sourcing from different locations you need that flexibility in your accompanying IT infrastructure,” agreed Mark Morley, Director Product Marketing for OpenText.
“We are going to be seeing a lot more investment into the cloud, and a focus on digital supply chains and digital networks to build that flexibility, that adaptability into those future supply chain and IT infrastructures,” he thinks.
This is especially so due to the “tsunami of data that is appearing in both the enterprise and also across the external ecosystem. That importance of having an integration platform that links the internal enterprise and the external supply chain is paramount to be able to give you that control-tower view.”
He suggests taking a stepping-stone approach by “working out what could a company do internally to build that infrastructure themselves but also, more importantly, think about how they can work with third parties to build and augment their existing IT infrastructure,” so that focus can remain on core activities and implementations.
This is part of our reporting from the Summit. To be notified when we release the complete post-Summit report,sign up to our newsletter here!
Upcoming virtual roundtables & webinars to sign up for
Join this webinar from the cutting edge of the supply chain industry, get an insight into the future of asset management, and:
- Discuss the key benefits of maximising visibility and real-time status management of high value goods in transit, with a focus on IoT-enabled, data-rich asset monitoring to assist across inventory control, installation & recovery.
- Explore how to minimise supply chain complexity in your operations and identify which steps must be taken by your business to manage and execute a comprehensive reduction in these processes.
- Understand the specific details pertaining to new regulations and compliance requirements of critical asset monitoring that your business must adhere to.
Nov 10, 2020 10:00 AM in Eastern Time (US and Canada).
Join this webinar to learn about:
- The cost of quality data: Audit existing data and evaluate missing data points and determine the ROI of developing a fully standardised and digitized process across suppliers.
- the race to the consumer: As retailers battle on who gets to the consumer the fastest, they first need to understand the bottlenecks in the business strategy and use data to identify the causes, be they related to tech, labour or process.
- End-to-end visibility: Legacy systems, resistance to change and heavy bureaucracy - with all the data we have available, there’s crucial basic data supply chains are lacking. Learn how to achieve full visibility and efficiency across the value chain by rethinking outdated processes.
Nov 12, 2020 11:00 AM Eastern Time (US and Canada)