MHI Solutions Improving Supply Chain Performance
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One of the key takeaways for companies operating disrupted supply chains during the height of the COVID-19 pandemic (and its aftermath) was how imperative it had become to gain visibility throughout multiple tiers of suppliers—specifically their inbound deliveries. By gaining a more precise view of where a product was enroute, not to mention its component parts and the raw materials used to make them, organizations could react more quickly to receiving delays and coordinate a response to help ultimately deliver orders to the end customer.
To achieve any degree of visibility, however, requires the synchronization and connection of a broad variety of data sources. That means bridging silos of delivery-related information held in discrete software systems that don’t inherently communicate or connect. It’s a challenge found up and down supply chains, said Keith Moore, co-founder and CEO of AutoScheduler, whether a company owns the entire process or not.
Moore notes that internally an organization probably has at least four major supply chain software systems in place for management of various processes including transportation, warehousing, procurement, planning and inventory management.
“The master database is in the enterprise resource planning (ERP) system, every distribution center (DC) has its own warehouse management system (WMS), there’s a transportation management system (TMS) for tendering carriers, and there’s typically a different appointment booking solution,” he explained. “Yet rarely is the data from these individual systems integrated end-to-end—even if the organization owns the DCs, the transportation and the deployment strategy.”
Attempting to get data from vendors and suppliers—particularly surrounding transportation and freight movement—can be particularly challenging. “If a company does not book their own transportation, it’s going to be more difficult to get the right electronic logging device (ELD) data for trailers to attain real-time updates that deliveries can be optimized around,” Moore continued, noting that when looking even further down the supply chain, from third tier and beyond, the variety of platforms used grows exponentially.
The multiple numbers of handoffs upstream, and the third-party logistics (3PL) service providers who are often involved in managing freight contribute to delivery data connectivity challenges, said Monica Truelsch, senior director of supply chain management solutions at Infor. She notes that transportation decisions are rarely owned by the company that runs or manages the warehouses or DCs, and that many of the service providers are chosen based only on cost savings reasons over enhanced visibility service offerings.
“COVID taught us that you’re not going to be able to ship anything to your customers if you can’t guarantee that you’ve got product coming into your warehouse,” she said. “If the warehouse knew when the vendor supplier was going to ship, that would be helpful, but often it is really hard to get advanced shipping notices (ASNs) from certain suppliers. Sometimes you don’t get that kind of information so you can’t plan to properly receive goods in the warehouse until the truck had already come and unloaded at your dock and left again!”
Without visibility or connectivity with suppliers, and without receiving ASNs in a timely manner, it’s difficult to plan labor, putaway and receiving, continued Truelsch. “Further, that makes it hard for your sales organization to know what they have available to promise customers to fulfill orders.”
That’s why supply chain planners and managers have long relied on spreadsheets that they populate with information gleaned from multiple daily phone calls and emails, she added.
“With a globalized supply chain, regardless of where you are in it, chances are you’re waiting for stuff to come in on a container from overseas to replenish your sales stock,” Truelsch noted. “That’s why gaining visibility to cross ocean transport and shipping decisions from overseas suppliers and contract manufacturers has become top-of-mind for companies trying to get a more reliable, consistent projection of how long it’s going to take their order to actually arrive.”
Ryan Closser, Director of Program Management and Network Collaboration at MHI member FourKites, agreed.
“One consistent blind spot in supply chain data is the segment of your supply chain that you don’t control. Whether it’s a vendor managing the delivery of critical components to your production line or a manufacturer who may deliver important inventory to your store, these network segments are often obscured,” he said.
Overarching Solutions Connect Data for Increased Visibility
To overcome these challenges, more supply chain organizations are seeking central visibility platforms that connect and consolidate data from multiple, different parties automatically—that is, with minimal human intervention (and no spreadsheets).
Most solutions aim to bring all parties in the supply chain together on one network platform. For example, that allows procurement to transfr purchase orders to suppliers, and suppliers can send a booking order directly to the freight forwarder when they’re ready to ship the order, explains Truelsch. All the handoffs and other milestones are automatically captured by the central platform, which also communicates with a facility’s WMS. That enables companies to have a better idea of when deliveries will actually arrive.
“Event-based milestones—such as a shipment was picked up by the supplier, it was loaded on a ship at the port of origin, or it’s arrived and been discharged—those are key stages in the movements of goods,” she continued. “You don’t need to necessarily track a ship for every mile of its journey. But if you know with certainty and reliability when these key movements are taking place, your ability to plan receiving and labor is much improved at the DC.”
One way visibility platforms work is through increased use of application programming interfaces (APIs). These enable different softwares to communicate and exchange data. Historically, providers of the big ERP, WMS and TMS solutions haven’t made their software especially accessible in terms of pulling necessary data for greater visibility into deliveries, or much else, explained Moore.
“Supply chain companies are starting to realize there’s more value in working with flexible providers whose platforms are designed to be open, interface with other systems, and make their data more easily accessible,” he said.
“You’re seeing more of a decentralized, service-oriented software approach,” Moore continued. “That enables operations to take the transportation and warehousing systems that already exist and gain visibility without engaging in a five-year project to build out functionality or replace existing software. Layering another solution over existing software can yield the highest impact for the lowest amount of time and cost.”
Another way to gain more immediate access to delivery-related data is through Internet of Things (IoT) devices, with more systems that automatically track vehicle or item movement being deployed. For example, electronic logging device (ELD) mandates in the U.S. are intended to ensure truck drivers do not surpass a given number of hours they can safely drive. Simultaneously, however, ELDs utilize global positioning systems (GPS) for tracking that can be tied to the shipments they haul. Pulling that data contributes to increased visibility.