Thinking Beyond Supply Chain Visibility Technology
Supply chain visibility has recently emerged as one of the most important foundational capabilities for supply chain excellence. This is also very much evident in the survey responses we have received for our upcoming research, Supply Chain Planning in The Cloud. SAPinsiders have clearly highlighted end-to-end visibility as a key aspect in many of their responses. While technical requirements for building supply chain visibility are obviously critical, there are many non-technology aspects that SAPinsiders need to be aware of. In a recent
SAPinsiders article, we discussed some of the foundational elements of building supply chain visibility, from a technology perspective. However, like every other technology, the foundational aspects of building these capabilities go beyond technology, percolating into people and processes. In this article, we briefly share some of the non-technology aspects:
- Build trust with supply chain partners. While the need to extend visibility by integrating with visibility platforms of supply chain partners has already been emphasized, this is easier said than done. Organizations' key bottleneck is a lack of trust between supply chain partners. Hence, it is extremely important that organizations work on building trust with all their key supply chain partners. This can be done by elevating the interactions from transactional to strategic partnerships. The benefits of building deep trust with key supply chain partners extend beyond supply chain visibility.
- Redefine your key metrics. While metrics like OTIF are critical to track, it is important to develop a hierarchy of KPIs and metrics to understand the drivers of performance and identify which area needs more attention than the other. For example, a low OTIF number can occur due to late logistics deliveries or inventory unavailability. Hence, it is important to create a metrics hierarchy to pinpoint the bottleneck. This also allows you to identify areas where your visibility initiative needs to focus as you embark on building these capabilities. Having this hierarchical view also allows you to strategize action items and levers that you need to use to manage your operations based on KPIs. As Richard Den Ouden, co-founder of angels highlighted in a recent conversation: "KPIs by themselves are not very useful unless we understand what actions need to be taken to impact those KPIs."
- Connect customer segmentation with supply chain segmentation. It is evident that customer satisfaction is a key goal for building the foundational capability of visibility. However, the expectations of customers may vary widely across segments. Therefore, it is critical that your supply chain segments align with your customer segments. This will then extrapolate into your digital tracking strategy roadmap as well. For complex supply chains, there are typically many sub-supply chain segments embedded within a broader supply chain. Based on the customer segment, not every supply chain segment may be a priority initially for modernizing tracking, but eventually, you would want the entire end-to-end supply chain to have similar visibility capabilities.
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