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Report on the Past or Control the Future? What Would You Choose?

Posted on: 05-09-2016 14:46:151030


The world of supply chain is changing rapidly. Customer’s delivery expectations are becoming more demanding, the explosion in mobile and e-commerce ordering has dramatically increased the number of channels and the order frequency and volume, and in order to cope supply networks are becoming more complex as companies rely on external partners and 3PL’s.

All this activity creates pressure for ever increasing levels of agility and responsiveness, and in order to orchestrate all of this activity, supply chain teams need transparency and detailed insight into their end-to-end processes in a timeframe that allows them to take action.

Are companies able to cope with this new world and provide the required level of visibility and insight? Generally, the answer is no.

Time and again supply chain leaders cite ‘lack of cross-process visibility’ as an issue, which is unusual given the amount of organizations that are running wall-to-wall ERP systems like SAP. However, when you take a closer look at what information is available to managers and executives, nearly all of it is contained in BI tools that report on lag based measures of past performance. It triggered me to start asking several people ‘Why do you need these reports and dashboards?’. They all came back to me with the same answer; “because we need to know what is happening in our supply chain”. If the information they use focuses on what’s happened rather than what’s happening, this answer left me questioning whether they were really in control.

To be honest, I have my doubts. Traditional BI tools provide plenty of information, but on events that have already happened. How can you understand and control your supply chain’s direction if your only method of control is the rearview mirror? To really understand and have control of what is happening in your value chain, you need insight in what is happening now or what’s going to happen in the near future.

The proof of this issue is plain to see. You only have to look at how many production schedulers, customer service operatives, warehouse managers and shipment planners resort to using some form of self-built analysis tool – usually via a download into Excel - to see this. They simply don’t have the tools needed to truly understand what actions to take, so they develop their own. These self-made solutions simply compound the problem however, creating numerous silos of information and multiple versions of the truth.

To be clear I’m not preaching that you only need to report on things which are happening now, reporting on the past performance is still important as you can always learn from the past. “What went well and what did not?” and “what can we learn from this?” are always valid questions to ask. However how can you be in control of events that have already happened? Likewise, how can a fully integrated supply chain be improved through the execution of independent silo activities?

These are all questions that are addressed in a recent webinar I hosted; ‘Beyond Reporting: Empowering the Agile Supply Chain Through Cross-Process Control Towers'. An analogy I like to use explains that hat we not only need information on the past, but also insight into the near future. The analogy is that of a control tower. To ensure planes land safely requires understanding of criticality - which planes have enough fuel to circle the airport and which need to land now, and impact – what effect do delays have on scheduled take offs and connecting flights. All of which requires air traffic controllers to have visibility of current events – the planes in the air – not a report of the planes that have already landed.

So surely we need the same level of visibility and control in our supply chain to ensure our customer orders arrive safely as well. Don’t we also need insight which enables us to understand any upcoming issues or bottlenecks and take action before, not after, they have happened?

Watch the above webcast I recently hosted for Every Angle for more detail. I hope you find the content useful.

Sean Culey
Value Chain Thought Leader

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