6 minute read
I recently had the opportunity to join Jake Barr, principal and chief executive officer of BlueWorld Supply Chain Consulting, on a special episode of the SupplyChainBrain podcast, hosted by editor-in-chief Bob Bowman. The focus of the episode was discussing an oft-neglected element of brand manufacturer external supply chains: multi-enterprise data visibility and process collaboration.
Near real-time visibility of order, quality, material and capacity data is essential to the efficient operation of multi-enterprise supply chains. Unfortunately, many supply chains are running blind due to a startling lack of visibility beyond their own internal operations. The COVID-19 pandemic, in particular, exposed this lack of data visibility and partner collaboration at all stages, from raw materials acquisition through manufacturing and final delivery to the end customer.
The issue of supply chain visibility and collaboration becomes even more critical as brand manufacturers rely more heavily on outside partners for manufacturing and packaging. Did you know that on average 25% of a brand manufacturer’s product output is outsourced to contract suppliers? That’s a great chunk of business of which brands have poor visibility, leading to excess inventory, product waste, supply chain inefficiencies, poor customer service and other costly issues.
What’s needed to establish near real-time visibility and process collaboration across multi-enterprise supply chains? Let’s dig into that.
Acknowledge the business risk of data blindness
As I alluded to earlier, not knowing what’s going on in your outsourced operations can lead to business risks that are quite avoidable. When you lack visibility into your partners’ production, you lose the ability to accurately gauge capacity and materials availability, which snowballs into inefficient order planning and execution for both sides of the relationship. This problem is compounded further in networks consisting of many suppliers: when several nodes of the network “go dark”, the risks and performance issues associated with guesswork and lack of data are greatly amplified.
"The supply chain data gap has been magnified by the impacts of the most recent pandemic to a level of absurdity." Jake Barr, Principal and CEO, BlueWorld Supply Chain Consulting
In truth, this problem has always existed, but COVID has magnified the problem for ALL to see.
Extend digitization beyond the four walls
In this day and age, when supplier networks are so large and business moves so fast, it is mind-boggling that communications are still being managed by spreadsheets and phone calls.
"The core outages most companies have been dealing with is an inability to get beyond an elementary-school level of connectivity to pass vital information around an ecosystem." Jake Barr, Principal and CEO, BlueWorld Supply Chain Consulting
Brand manufacturers have mostly focused their digital transformation efforts within their own operations, which may be satisfactory for internal processes but leave themselves and their supplier networks outdated and outgunned. Worse still, as brand manufacturers continue to grow their external networks and increase the percentage of their business to suppliers, they mostly have continued to maintain an “internally focused” mentality when managing their supplier network.
Course correction begins with redefining the concepts of digitization, data visibility and partner collaboration. True network visibility means real-time operational data flow between a brand manufacturer and its suppliers.
Digitally connecting the entire external supply chain offers operational and financial gains that add up to more than the sum of its parts—and the first step is to take off the blinders and start gaining true visibility over the supply chain network.
Begin the journey to enable end-to-end data visibility
The true journey to digitization begins with a focus on increasing process maturity and data granularity to production data that originates outside the brand manufacturer’s own operations. The result is a digitized supplier network that enables real-time data capture at the shop floor level, as well as capabilities that connect that data to multiple trading partners. Similarly, real-time data flow is necessary to committing to customer orders produced by partners, raising overall supply chain performance levels and driving continuous improvement efforts.
"Real-time visibility provides trust between supply chain partners, but also the verification and information needed to make sure you're driving continuous improvement." Henry Canitz, VP Industry Solutions, Nulogy
The end-game is a digitally transformed multi-enterprise supply network that offers value not just for the brand manufacturer, but for its suppliers as well. Through shared business goals and commitment to success, everyone can win—but only if supply chain partners take off the blinders and begin the journey to true multi-enterprise data visibility and partner collaboration.
Click here to listen to the full podcast episode.