Companies move towards greater supply chain visibility
Within many companies, supply chain visibility is currently limited to transport activities: they can see the position of their goods in the supply chain and adapt their own approach accordingly. Companies are increasingly taking new steps in terms of supply chain visibility. And once they have insight into their internal supply chain, they are often turning their attention to their suppliers and customers.
By Marcel te Lindert
Companies are making ever higher demands of their supply chains. Enterprises need to be even more flexible and quicker to react; that can only be achieved if they have insight into the entire chain, and can take rapid action to rectify disrupted processes.
Consultancies and advisors such as Capgemini Consulting have noticed that interest in supply chain visibility is on the up. Improving visibility has featured in the top three of its customer supply chain projects for the past two years. Better insight into costs, more reliable lead times and greater control over manufacturing partners and logistics service suppliers are just some of the reasons given by clients. “At a certain point, companies have optimised all their sub-processes,” says Rob van Doesburg, the consultant at Capgemini who led its 2012 study of supply chain visibility tools.
Changing supply chain visibility
The demand for supply chain visibility is not only increasing, but also changing. “Visibility often starts in the area of supply chain execution and analytics. Organisations want to know where their goods are and which potential delays might occur in flows of goods, as well as gain better insight into the associated costs. Other aspects are added later, such as planning to aid allocation decision-making for instance, performance management for the purpose of monitoring logistics service suppliers, or collaboration by sharing information,” continues Van Doesburg.
The changing demand for visibility is directly linked to the increasing maturity of companies in this respect. “Visibility is often initially restricted to a certain region and part of the supply chain with limited possibilities and a limited degree of integration. It could be focused on just the internal supply chain or on transport only, for example. Companies begin by recording and analysing events rather than planning,” states Van Doesburg. According to Capgemini, the ultimate form of visibility is a ‘control tower’. “A company which is structured around silos will not be able to manage the entire chain based on information from different systems. To do so, you need a central department which collates the information from the various silos,” explains Van Doesburg.
Visibility through VMI
DSM has been working to create more visibility in the supply chain since 2001, when the first steps of vendor managed inventory (VMI) were implemented. The concept has been rolled out further since then, both upstream and downstream. “Customers send us their forecasts and inventory levels so that we can ensure timely replenishment. In turn, we send our forecasts and inventory levels to our suppliers so that they can deliver raw materials to us on time,” explains Marco Jongen, cluster manager of integration at DSM.