It’s often said that “seeing is believing,” and as supply chains become more complex due to such external factors as security, free trade agreements, and new regulatory and legislative requirements, a need for visibility is created. However, being able to respond to what is visible in the supply chain may be more important.
The necessity for customers to “see” where goods are located is driving software companies and logistics providers to create visibility tools that provide the most comprehensive picture possible. And while software companies work toward creating these tools, the logistics providers are doing the same with an added benefit.
Logistics providers have the ability to tie their visibility tools directly to supply chain management capabilities. Where software companies act solely as facilitators, logistics providers are doers. It’s this picture that offers customers a more efficient, responsive and competitive business environment that adds true value to the bottom line.
The combination of visibility tools and supply chain management from a single source benefits the company by providing the information they need to help lower costs, enable higher productivity and increase inventory management capabilities like planning, forecasting and event management. The availability of information, along with the ability to perform actions based on it, helps companies maximize the effectiveness of their supply chains and execute vital business practices. It also goes a long way in increasing customer satisfaction indices because of the reliability of a company’s communications to its customers.
Currently, software developers are tripping over each other to provide visibility tools that they believe highlight their supply chain expertise. However, true supply chain expertise and complete visibility into an integrated end-to-end supply chain are the most important benefits to customers provided by logistics providers today. Companies are benefited when they see shipment details and movements from the manufacturer’s dock door to package delivery to the end-consumer, and all points in between, from one source -- the same source that is managing the goods movement as well.
Even with the effectiveness of logistics providers to offer visibility information and supply chain management, supply chain software spending will increase in the coming years. By 2006, according to research firm Gartner, spending on supply chain software will increase to $2.18 billion per year globally.
But despite all of this IT frenzy, it should be remembered that the focus on visibility should be about giving companies what they want, what they need and what will be useful. This means tools that allow a company’s supply chains to be optimized and streamlined for greater benefits. Logistics providers’ visibility tools, connected to supply chain functionality, provides information that allows tighter control of inventory levels, and better communications with manufacturers, vendors, suppliers and, ultimately, end-consumers.
Software, however, is not the be all and end all. Operational change must be part of the plan for improvement.
With visibility connectivity and supply chain management, companies have the ability to hold their logistics providers to a new standard for operational efficiency and know-how. The expertise that these logistics providers bring to the table is out there for companies to see and judge everyday. While software companies may offer a visibility tool, logistics providers are the only ones that provide the tools as well as the information and supply chain functionality that allows cohesive, well-informed business decisions.
These direct links of visibility, information, supply chain functionality and responsiveness also offer companies the flexibility to adapt to extraordinary circumstances.
But even with the great strides that have occurred with visibility, the time will come when providing the most comprehensive picture possible isn’t good enough. It’ll be necessary to provide the most detailed end-to-end real-time motion picture that displays the location of goods precisely as they move in the supply chain, while being continuously managed and monitored with decisions being made along the way. This type of capability pushes information to a new era that allows for pre-alerts, early activation of contingency plans and changing the movements of goods midstream to avoid delays.
It’s true, seeing is believing. But being able to respond is the key.
About the Author
Laurie Johnson brings 28 years of UPS management experience in finance and accounting, customer service and information technology positions. As vice president and CIO of UPS Supply Chain Solutions, she is responsible for establishing global enterprise systems architecture, focusing on the integration of legacy systems and people acquired during the purchase of about two dozen companies.
Johnson earned a bachelor degree in business management (cum laude), with a minor in leadership studies, from Shorter College.
