Technology has made great strives in the last decade to improve supply chain visibility and to reduce risk in the supply chain. Supply chain technology such as EDI, managed file transfer, web portals, cloud computing, RFID, scanners, wireless, logistics systems, and so on are great enablers, but maybe we have just touched the “tip of the iceberg” when it comes to supply chain visibility. To date, most supply chain visibility projects are focused inwardly on how a single node (the project sponsor) in the supply chain can increase supply chain visibility. What if every node in the supply chain focused on how it could provide better visibility to all of its trading partners?
What if every node in your supply chain network offered supply chain visibility? |
Transparent Supply Chain. In a transparent supply network every node provides visibility of its operations to its trading partners. This type of visibility provides near and real-time supply chain visibility to trading partners versus just relying on forecasts and purchasing trends. A transparent supply chain is about providing answers to questions now. Questions like: What is your supplier’s inventory levels? Where is a product warehoused? Where is my stuff? What is the financial status of your suppliers? What is the status of your supplier’s suppliers? Many of these same questions also apply to a supply chain’s customers as well. Some of this information may be known by forecasts and assumptions, but is this information available to you real-time or on-demand? This type of information transparency makes real-time decision-making almost perfect. With perfect information, supply chain risk is minimized or even non-existent.
Example of Supply Chain Transparency. An article from EDF Innovation Exchange, I’ve Seen the Future…and it’s Transparent referenced a trading company in southern China that is very successful because it practices transparency in the supply chain. This company, PHC International “is responsible for sourcing many of the electronics (and other goods) common on US store shelves. The article describes Liam Casey, the CEO of PHC, approach to providing a transparent supply chain that greatly reduces risk for everyone in the supply chain.
“His premise is simple: cut through the chaos and provide clear information about where the product is sourced (down to specific GPS coordinates), where all components come from, who the factory owners are, what other products they manufacture, their histories, the type of equipment they use, and where final assembly and packaging take place. Oh, and did I forget to mention he can track every order all the way to your doorstep? With the software he and his company have created, he can.
Stating the obvious, this model of complete transparency holds tremendous business value for global manufacturers and retailers. With the kind of information PCH provides, supply chain risk is reduced, inefficiencies are exposed and driven out, environmental impacts can be identified and improved and customers ultimately gain peace of mind and lower prices.”
Providing Transparency Versus Getting Visibility. Having a transparent supply chain is definitely a fresh approach to providing supply chain visibility and reducing supply chain risk. Many times when you think about visibility, it is about how OUR company can get visibility over the supply chain, transportation networks, and assets. PHC takes an opposite approach of seeing what their company can do to make their portion of the supply chain visible to their customers and suppliers.
Enabling an Transparent Supply Chain. I see making supply chains transparent as an excellent approach to taking supply chain visibility to another level and how a company can make themselves most value to their supply chain partners. As the article states, advanced software and systems are needed to make a company’s supply chain visible to its supply chain partners. I would expect that key technologies would include EDI, managed file transfer, web portals, cloud computing, RFID, scanners, wireless, integrated logistics systems, and so on come into play to make near-real-time visibility available to multiple trading partners.
