Defining “End-to-End” Supply Chain Visibility
Nulogy VP Hank Canitz defines “end-to-end” supply chain visibility: What Does it Mean, Are We There Yet, What’s the Value and How Do We get It?
A topic discussed frequently today by supply chain practitioners and experts is the need for improving supply chain visibility, and for good reason. Increasing visibility into supply chain operations—and the data generated by those operations—can be used to significantly reduce costs and improve customer service. Supply chain visibility provides the means to speed up response times, improving the ability to react to change and recover from disruptions. It is said that “Speed is the New Black” in supply chain management. Visibility enables speed: to sense change, to analyze options, to respond, and to adapt and improve.
In conjunction with visibility, the nebulous term “end-to-end” is often used. The other day I was talking to a supply chain executive from a large Fast Moving Consumer Goods (FMCG) manufacturer. He was quite pleased that his company had attained what he referred to as “end-to-end” supply chain visibility. When I asked him for details, he explained that they now can see transactions happening in their plants, warehouses and the transportation lanes among these facilities. He went on to explain how his company is using that data to build and update a supply chain digital twin. In my opinion, this is a great accomplishment. However, is that truly “end-to-end” supply chain visibility?
Council of Supply Chain Management Professionals (CSCMP) Definition of Supply Chain Management: Supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies. -CSCMP Glossary
If you agree with the CSCMP definition of what supply chain management is, then “end-to-end” visibility not only includes what is happening within but also across partners and customers. End-to-end thus includes a supplier’s supplier through to a customer’s customer in most of today’s supply chains. This end-to-end definition of supply chain is often referred to as multi-echelon, consisting of multiple layers or echelons of partners. Thus “end-to-end” supply chain visibility is significantly more expansive and complex than the definition being used by the supply chain executive.
Due to the complexity of true “end-to-end” supply chain visibility, even the largest and most mature supply chain organizations struggle to achieve this state of nirvana. Most large and medium-sized FMCG companies are at some point on a continuum from limited internal visibility to full “end-to-end” visibility. Some more mature organizations have achieved “downstream” visibility into customer demand through customer distribution center data, customer Point of Sale (POS) data, or some other downstream demand sensing data. Some companies have even started augmenting their internal digital twin with near real-time and granular downstream data. Very few companies have the necessary “upstream” supplier ecosystem data to augment their digital twin to encompass upstream operations.
As stated earlier, enterprises gain real value through supply chain visibility. Research conducted by PwC in 2021 uncovered that investments in supply chain visibility generate 8% additional revenue and reduce costs by 7%. In this study, Judith Schneider, Principal at PwC Germany and one of the main authors of the research, states “that in recent years, the frontrunners in supply chain digitization have invested in ecosystems in which all supply chain partners are digitally connected.” Digitization enables frontrunners to work together with their contract suppliers. The report goes on to state that “these ecosystems are built on a foundation of a data network in which every partner has access to all the information they need.” Sounds like “end-to-end” data visibility and digitized collaboration to me.
Investing in supply chain visibility and building digital twins enable partners to visualize what is happening in the supply chain in real time, providing valuable information about the flow of goods which enables improvements in On-Time-In-Full (OTIF) performance. Visibility allows supply chain partners to trace the origin of finished goods and which raw materials and/or components have been used to make them, improving regulation compliance and safety. Supply chain visibility provides insight into stock availability, production capacity and schedules to identify areas for operational efficiency improvements. Supply chain visibility provides the foundation for partner collaboration to optimize the end-to-end supply chain.
Supply chain visibility is something that most supply chain organizations should want. But how do we move along that continuum of visibility maturity to get to true end-to-end visibility? Unfortunately, no software solution provider offers a solution to enable complete end-to-end supply chain visibility today. Most enterprise 4.0 initiatives involving ERP and APS solutions have focused on gaining “within the four walls” visibility. Some software solution providers have focused on enabling downstream visibility while a few others have focused on upstream visibility.
Also unfortunately, there are no technology standards for how to achieve end-to-end supply chain visibility. Some companies try to build supply chain visibility through EDI or portal connections between legacy ERP systems and partners. However, EDI and portals were not designed to provide the near real-time operational supply chain data visibility needed to meet the needs of today’s highly variable, constantly changing fast-paced markets.
A relatively new supply chain software category, Multi-Enterprise Supply Chain Business Networks (MESCBN), provides the most promise for supporting end-to-end supply chain visibility. Gartner, in its 2020 MESCBN Magic Quadrant Report, defines Multi-Enterprise Supply Chain Business Networks as cohesive technology platforms that support a community of trading partners that need to coordinate and execute on business processes that extend across multiple enterprises. MESCBN software platforms support a community of trading partners that need to work, share data, communicate and collaborate on business processes that extend across multiple enterprises, with an end-to-end/shared focus. In other words, MESCBN platforms are purpose-built to support “end-to-end” supply chain visibility.
The reality today is that competition is evolving away from company versus company and toward supply chain versus supply chain. Leading supply chain organizations are adopting MESCBN platforms to enable near real-time data visibility and process collaboration driving powerful financial and customer service benefits for their companies. Every supply chain professional should be asking the question, “Are we putting the processes, organization and solutions in place to enable end-to-end supply chain visibility?”
If not, why not?
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