Becoming a High Performing Sense and Respond Enterprise: End-to-End Supply Chain Visibility is Key
End-to-end supply chain visibility is a key to becoming a demand-driven enterprise. Enterprises gain significant benefits by collaborating with their supply chain trading partners through supply chain operating networks. According to industry analyst group Gartner, end-to-end supply chain visibility will increase by 50 percent by 2018.
Here are some tips on how to enable end-to-end visibility across your enterprise:
Sense and respond are critical processes for supply chain visibility and can only be achieved through a collaborative network that is coupled with robust business process orchestration and advanced analytics.
Visibility encompasses not only sensing data, but also how to analyze it and take appropriate action across the extended enterprise. Next-generation business networks, where commerce is digitized and flows across buyers, suppliers and logistics providers, is key to enabling future looking capabilities.
Use predictive and prescriptive analytics to support your visibility goals.
- Predictive analytics gives supply chains the ability to respond to actual market conditions, predict consumer behavior, and identify possible delivery constraints. In business, predictive models exploit patterns found in historical and transactional data to identify risks and opportunities.
- Prescriptive analytics envision many different scenarios using intelligence gathered in real-time, and presents an optimal solution. Prescriptive analytics helps companies decide the best course of action to take given certain business objectives, requirements and constraints. It seeks to find the optimal solution given a variety of choices, alternatives and influences that might affect the outcome.
Eliminate silos within your organization to take full advantage of end-to-end visibility. Typically companies operated in silos, but according to a recent Global Supply Chain Institute at the University of Tennessee survey, while some lines between business functions have blurred, silos still exist, especially between purchasing and logistics. Best-in-class companies tend to have end-to-end supply chain integration.
Create an outside-in culture within your organization by focusing on customers and trading partners. When companies can operate their supply chains to respond directly to external market drivers this is known as the outside-in supply chain. This enables companies to focus more on sensing, shaping and driving an intelligent response to the environment happening outside their internal control.
Utilize cloud-based shared process and information layers within your information architecture to sit above physical assets, supply chain, and operational applications. The cloud can be a real game changer for supply chain applications, allowing greater connectivity, which leads to greater collaboration. The cloud allows for connections to be made rapidly and at a lower cost, opening the door for richer connections to be made – and to be made faster.
Make it easy for trading partners to connect by eliminating barriers to onboarding. A recipe for unmet expectations occurs when businesses attempt to force trading partners to collectively adopt a single process or technology standard. While internal needs can be forced through by corporate mandate, external supply chain partners are not necessarily accepting of their demands. A supply chain operating network truly integrates the extended, varied, distributed, and complex needs of thousands of individual trading partners and their respective enterprises, without requiring any of them to change the way they do business.
Gaining end-to-end supply chain visibility provides significant benefits, such as higher order fulfillment rates, improved customer service levels, higher profitability, increased operational efficiency, and higher revenue growth. Using a supply chain operating network that offers collaboration and visibility capabilities, your company will experience better on-time performance, reduce variability in lead times, and free up working capital.
Per Gartner the quantitative benefits include:
- Inventory savings of 20% of value
- Increased forecast accuracy of about 25%
- Improved SLAs to consistent 98% levels
- Freight charge reductions from 5% to 3.5% of volume
- Decrease of inventory on stock from just over 10 days to fewer than seven days
- Reduction in workforce by 10%
- And also of interest, calculating the ROI of the implementation is only one year
With end-to-end supply chain visibility, your business will be able to respond more quickly to demand changes and will be better positioned to beat the competition. It has been suggested that demand-driven companies can sense market changes five times faster, which enables better customer service, lower inventory and better bottom line profits.