Polly Mitchell-Guthrie, the VP of Industry Outreach and Thought Leadership at KinaxisKinaxis
Do you want visibility or transparency? Polly Mitchell-Guthrie, posed that provocative question to supply chain professionals on her LinkedIn feed. Ms. Mitchell-Guthrie is the VP of Industry Outreach and Thought Leadership at Kinaxis. Kinaxis is a top supplier of supply chain planning software.
She went on to say, “visibility is widely considered a new supply chain imperative. But visibility means different things to different people. Do you want to know who your tier 2, 3, and 4 suppliers are? Or are you asking where your truck is? Or the impact of a tier 3 supplier delay on the part you need getting on a truck to your plant in time for you to meet the production schedule so you can deliver on time in full to meet your customer's newest requirements?”
“Different vendors mean different things when they use the same term. It reminds me of what I like to say about descriptive analytics and the dashboards people love. Mere visibility might just help you ‘admire’ a problem – ‘gee, those parts are going to be late.’ You need full transparency to be able to understand the impact of that delay across your supply chain, so you can decide what to do about it. It's not enough to see, you have to be able to understand the impact. And have the AGILITY to be able to respond quickly.”
Let’s dig into these concepts. There are two dimensions to visibility: breadth and time. On the time dimension spectrum we move from visibility to bad things that happened at some point in the last few days or weeks, to real-time alerts, to the best situation where predictive alerts tell you something bad will happen unless you do something.
On the breadth dimension, we have a spectrum that includes point solutions out to alerts over a much broader range of events. One example is an alert that a truck will be late based on a GPS feed. Four Kites and Descartes are examples of software companies whose solution provides this type of alert. These are real-time alerts but these suppliers are working to make an increasing percentage of the alerts predictive.
The pandemic has raised the attention that risk notification and visualization solutions are getting. Suppliers here include riskmethods and Resilinc. These solutions have a graphical view of a company’s supply chain across multiple supplier tiers. If a supplier’s continued material flow becomes questionable for a wide range of reasons, the way that supplier’s components flow to various factories and nodes in the supply chain is graphically illustrated and the appropriate commodity managers are automatically notified. These real-time solutions work by continuously monitoring a wide variety of risks, identified based on monitoring hundreds of thousand online and social media sources, and then elevating risks in heat bubble maps.
There are supply chain visibility solutions for Risk, Source, Make, Deliver, and Returns/Recalls. To work effectively, these solutions often must be network-based solutions. This class of software is known as Supply Chain Collaboration Network solutions. There are point solutions in each area, but Infor – with their Nexus network - and E2open, have broad supply chain visibility solutions that cross most of the supply chain silos – Source, Make, etc. - mentioned above. Many Supply Chain Collaboration Network (SCCN) solutions generate visibility based upon EDI, which is not real-time. EDI messages that a shipment will be late, for example, not uncommonly arrive after the shipment has already arrived. But there is a trend for SCCN solution suppliers to provide both broader solutions, and have more alerts based upon real-time feeds or even be predictive. For the most part, providers are still early in this journey to predictive alerting.
Then there is the question of what you can do with that visibility. Is it just a situation where you get bad news and your day has been ruined because there is nothing you can do? Or do you have applications and a playbook that allow you to mitigate, or even better, solve the problem?
In some cases, a point application – like a warehouse management system - will provide an alert and the solution can be executed in that application. A warehouse management system solution from a supplier like Manhattan Associates MANH , HighJump (now Körber), or Blue Yonder have dashboards that indicate whether order selection is proceeding on schedule and whether it is likely that the day’s orders can be picked on time. If things are not going to plan, a manager might make some calls and see if he can get some more employees to come in and work.
But there are many alert situations where the impact is broader, and the necessary mitigation needs to include several departments or even supply chain partners. In those situations, supply chain planning solutions with concurrent planning capabilities are often the proper solution. While some SCCN solutions will argue that SCCN allows a company to “orchestrate” the proper response, a company really wants an “optimal” solution. An optimal solution is based on understanding the supply chain constraints across the end-to-end supply chain and then applying sophisticated math navigate those constraints in a way that maximizes service at the lowest total cost. Suppliers of concurrent planning include Blue Yonder, Kinaxis, Sovoyo, and others.
In short, companies need the right kind of visibility, they need to understand what they will do with that visibility, and then they need to be able to effectively execute the mitigation playbook. This set of capabilities is beginning to be called “Sales & Operations Execution.”