The world today is ever changing and complex. Companies which do business globally understand that their supply chains are vulnerable to many factors. These range from socio-economic uncertainties, political turmoil and natural disasters. Often, natural disasters cut off critical raw material suppliers, sources of manufactured goods, major transportation facilities or essential transportation modes, resulting in major disruptions in supply chains.
Enterprise risk from supply chain complexity spikes daily to new heights in a global supply chain. With globalization comes lengthened supply lines, increased competition, volatile environments and expanded regulations. This global complexity is causing more risk within supply chains than ever before. Companies can limit the impact of supply chain disruptions on their business by identifying risks and developing ways to mitigate them.
The growth of the omni-channel market is also putting pressure on manufacturing operations to bring products to market quickly and to deliver to end-customers more frequently and much faster. To create a competitive advantage, manufacturers need enterprise-wide communications and collaboration with trading partners via a global business network that provides visibility to all activities involved in every operation. All parties connected to the network will know if a disruption occurs or event happens that can delay shipments or production.
The backbone of visibility is a cloud-based collaboration portal that can be shared by the customer, the supplier and carrier partners. This single platform will be used as a dynamic record of truth for the changes that need to occur across the supply chain to keep the delivery of goods moving efficiently. Visibility and collaboration go hand-in-hand and result in improved efficiencies across the supply chain.
The key to mitigating risk in the supply chain is end-to-end visibility, tracking products from raw materials through delivery to the end customers. Knowing the rate of consumption of raw materials, modes of transportation and order lead times helps businesses know when and how to respond to external disruptions, such as a delay in shipment due to a part shortage. Tracking shipments in real-time means businesses can be proactive if there is an issue or delay.
If suppliers’ shipments and schedules are unpredictable there is a risk of trucks backing up in the yard. The lack of control can lead to dock appointments being missed or products lost or assets missing. Food, pharmaceuticals and other temperature-controlled products can become ruined from over-exposure while trucks sit idling, which leads to customer dissatisfaction and higher levels of pollution in the dock area. Implementing a cloud-based platform to act as the “record of truth” encourages efficiencies when planning labor and deliveries while simultaneously improving customer satisfaction.
Technology is the answer to holistic visibility
Businesses need technology that provides insight into supply chain activity down to the SKU level. This technology creates control and predictability, thereby reducing risk and the need for high-cost inventory stocking while building stronger relationships with suppliers.
Using a Transportation Management System (TMS), shippers can plan their deliveries to arrive at the right place at the right time while monitoring movement of shipments in real-time to make sure that carriers comply with shipping requirements. Carriers are dependent on their drivers to move goods effectively and efficiently. But the drivers can be delayed for a variety of reasons, such as the driver suddenly encounters heavy traffic, the truck breaks down, a sudden weather event occurs, or a highway is unexpectedly closed. A wide variety of uncontrollable events can happen to delay any truck. Any time freight doesn’t move precisely as expected, shippers will be looking to their carriers for an explanation and a quick resolution.
Using a TMS to gain visibility up and down the supply chain can help to uncover bottlenecks and to diminish risks. Shippers can look for clues to where weaknesses appear in current operations with reports and analytics. Carriers should create strategies to mitigate risks by having backup drivers and trucks that can pick up and deliver orders on a dime. If backup drivers or trucks aren’t available, shippers can reach out to the spot market to secure truckload capacity.
The right TMS will use APIs to connect carriers and their negotiated rates into the software. APIs eliminate the middleman and creates a direct connection that delivers critical information —such as tracking info on shipments – to both parties in the transaction. The right TMS can integrate and manage different data types from multiple systems, providing a single point of visibility into all data and transactions and allowing the business to proactively notify customers if an issue arises or to quickly resolve problems.
To keep pace with the exponential growth of supply chain risks both inside and outside the organization, supply chain managers must have visibility from end-to-end across all operations to uncover vulnerabilities. Being proactive by creating robust risk management strategies that obliterate vulnerabilities at critical areas within the enterprise leads to a resilient supply chain and sustainable business.
Dan Clark is founder and president of Kuebix.