Still Rising: The Need for Visibility in the Supply Chain

In 1997, I gave a presentation at a logistics conference in Dubai about the need for global inventory visibility as supply chains became more and more internationally focused. This September, I attended the CSCMP Edge 2020 conference (held virtually for the first time), and I watched several presentations on visibility in the supply chain, which shows that the industry is still talking about the same or similar problems.

Also, and perhaps unsurprisingly, almost every presentation or panel discussion focused significantly on the impacts of COVID-19 and whether this was the “new normal”. The conclusion was that the pandemic exacerbated these long-existing problems as we saw the supply chain stretched to breakage point. This naturally led to discussions on the need for increased automation and visibility within the supply chain.

A recent poll asking respondents from the supply chain industry to rank the most important technology areas confirmed that the same problems are now top of mind for these industry leaders. It is fascinating to see that supply chain visibility came out on top, pushing predictive analytics to second place. Furthermore, electronic bill of lading (and I would add all documentary processes in the quote-to-cash cycle) appeared from nowhere at rank 5

81% of respondents indicated that their means of competing in the future will rely on a robust digital platform that supports the delivery of shipment information, including both tracking and content information.

So, how does this study relate to the visibility topics discussed at the CSCMP conference, and how can we break the cycle of having to solve the same problem from decades ago?

Advancements in Visibility

One of the discussion points at CSCMP was the value of information internally vs. externally. We need to think more in terms of the value the information brings to the customer, whose needs are often different from those of internal parties. Dynamic, frictionless routing where online updates are immediately relayed to couriers was unthinkable 20 years ago.

Some will remember the paper airway bills with multiple carbon copies, which were used to key into different distributed systems but lacked any real track-and-trace capability. It was only with the advent of the internet that transaction speed began to allow immediacy of information.

This has progressed even further today, where not only the package status is known, but the content and content status (temperature, etc.) become available through IoT technology, for example FedEx’s new device called SenseAware®. In a recent press release announcing the device, Rob Carter, EVP/CIO of FedEx Corporation said, “Package tracking and visibility are more important now than ever, as businesses have become increasingly reliant on timely deliveries.”

Uncovering New Visibility Opportunities

Every presentation at CSCMP naturally drifted to the impacts of COVID-19. There was a feeling that it brought about visibility opportunities. Shipment data was always there! It was just badly utilised. The pandemic created a need to accelerate the development of a better information exchange. We used to think about the “black hole” and “where’s the rest of my order” that no one was able to provide a status on. Today, systems provide that information in real time. Delivering this information via dashboards and push emails/texts to customers waiting for updates will become commonplace in the next two years. The first step will be to identify what you need to measure; then you can map the systems to that and develop reports to publish to either internal or external parties.

Consolidation, Middleware, and APIs

There was a great deal of discussion about the paperless quote-to-cash cycle and how it could improve visibility. This has been an issue for years, driven partly by regulatory requirements of international shipping and paper manifests for trucking, for instance. The information was too siloed and carried in multiple systems. In fact, when early automation was put in place, often a separate paper trail was maintained in parallel, and often out of sync. Getting all parties involved to agree to dispense with paper, move data electronically, and reduce friction has been a pipedream at best. Trust (or a lack thereof) between trading partners has hindered progress.

Despite this need, the fastest-growing transportation and logistics companies still use more than 40 different technologies to power their businesses. Consolidating these applications, creating APIs and middleware solutions, and adding machine learning/AI tools will not only save cost but will be more efficient and less prone to errors.

Uncertainty Around Blockchain

Over the last few years, some people believed that blockchain would be the panacea for this exchange of information, but, as I wrote in a blog last year, the benefits are not completely clear. This was validated by several of the speakers at the conference (and confirmed in the table above): People still don’t completely believe in the need for blockchain on the DLT side. As an example, perhaps locking down PO information is important to protect the validity of the quote-to-cash cycle when it comes to the 3-way match. However, is it really needed in all of the steps along the way? Once the critical elements are locked down, then all related information and updates are not critical to the security of the transaction.

The Last Mile & Reverse Logistics

We know that 53% of the logistics cost for an e-tailer occurs in the last mile. Shipping companies are spending significant amounts to look at new ways for shipping product to consumers that can avoid that last mile. At the conference, the question was posed if establishing proximity-based pickup points in supermarkets, pharmacy chains, and direct pickup in stores (BOPIS) will limit the service and visibility expected by the end customer. My opinion is that consumers are getting used to the concept of local pickup, lockers, etc. and view it as a trade-off for lower costs.

Interestingly, though, there was little focus on reverse logistics and the first-mile costs of product returns. However, with a 74% increase in online sales since February 2020, there has been an equivalent increase in product returns, creating huge issues for e-tailers. There are warehouses full of returned product that e-tailers and manufacturers need to triage and find resell channels for.

Remote Workforce Aiding Visibility

A significant portion of customer service operations have migrated to the home office. Systems that support remote working have been developed, and many supply chain and logistics companies who never believed that remote work was a viable alternative are now realising that this can actually work, and in some cases even be more productive. They have developed internal agent performance tools that allow measurement of KPIs and metrics.

Building relationships online vs. face to face is a whole different world and has required enhanced systems and content in CRM tools, which therefore also need to be connected to the tracking systems to provide visibility. Traditional CRM tools used by customer service did not always contain detailed shipment information, instead requiring a hand-off to another department. However, consumers hate being transferred to multiple departments and want a one-stop shop agent who can see the shipment visibility and respond to all questions immediately.

Conclusion

In summary, not being able to see an accurate, up-to-the-minute shipment snapshot across segments, silos, or channels is more than just an inconvenience. It impacts how your customers perceive you. In an era of quick social media reactions, saying “no” can have a ripple effect. Saying “yes”, on the other hand, is also key to grow top-line revenue and even greater customer satisfaction.