When Bill Wappler thinks about the current state of supply chain visibility, he envisions nodes in the supply chain as islands in an archipelago, with nothing but blue water in between. A lot of information is being captured by IoT devices on each island—but a bridge is still needed in order to connect them.
The chairman and CEO of Surgere, a provider of IoT-based visibility tools, gets animated talking about advances in cloud computing and technologies to collect and analyze data. The tools to share that data and bridge the gaps? So far, sizzle but not much steak.
“I think we have a lot of good news, we’re on our way, but we have a lot of challenges,” Wappler said. “I’m a little exasperated about all the people talking about how they are providing end-to-end supply chain visibility. That’s the dream state, but the dream state isn’t quite here yet.”
But change is coming. The pandemic and the social and economic dislocations it spawned drove lasting changes and a reordering of priorities—none as profound, perhaps, as the urgent quest for greater visibility into and control over what’s happening throughout a company’s supply chain.
End-to-end supply chain visibility is fast becoming seen as a master key that can unlock the doors to achieving multiple mission-critical business imperatives:
- Resiliency: Companies learned the importance of resilience from the pandemic, and a better understanding of supply chain risks will be key to weathering future disruptions.
- Transparency: Environmental, social and governance (ESG) programs are putting companies on the hot seat to demonstrate they meet human rights, labor, diversity and other standards.
- Sustainability: Growing pressure to measure and mitigate the climate impact of your operations throughout the value chain makes visibility a must-have tool for reducing your carbon footprint.
- Customer satisfaction: Pandemicera shipping delays, stockouts and the unhappy customers they produced have more retailers and brands wanting to own the product journey end-to-end.
- Profitability: Lower costs and improved efficiencies and margins may be the ultimate appeal of greater visibility as new tools allow managers to adjust and optimize operations in real time.
Just getting started
Few companies claim to have a clear line-of-sight into supplier operations. A recent survey of nearly 500 supply chain executives by Deloitte and the Chartered Institute of Procurement & Supply (CIPS) found that only 13% of privatesector companies said they could map their entire supplier network, and 12% said they had no visibility beyond their Tier 1 suppliers.
Supply chain mapping is part of what consultancy Accenture defines as “structural visibility”—a static snapshot of a company’s supply chain created through activities such as classic risk management, assessment of locationbased risk and other risks inherent in the design of the supplier network and computer modeling to stress-test the network.
While many companies are struggling to achieve structural visibility, “dynamic visibility”—the ability to monitor and respond to supply chain events in real time and the holy grail promised by new technology—is out of reach for all but a very few, according to an Accenture survey of top supply chain executives.
Rob Handfield, founder and executive director of the Supply Chain Resource Cooperative at North Carolina State University, questions whether the picture might be bleaker than some estimates suggest. Here’s how he assesses the current state of supply chain visibility:
“How many companies have visibility into their current inventory within their own four walls? Probably a pretty large number, probably more than half. How many of them have visibility to inventory in their supply base? That’s a much smaller number, probably less than 10%. How many have visibility to their Tier 2 suppliers? Zero. A lot of them don’t have visibility to their distributors’ inventory, either. So, I think the further out you go from the four walls of your own enterprise, the numbers drop significantly.”
But recognition of the value of visibility is rising, and so is interest in investing in the technology to achieve it—tools leveraging advancements in communications infrastructure, blockchain, artificial intelligence, machine learning and cloud computing that make it possible to collect, analyze and share massive amounts of data in real time.
John Dwinell is president of Siena Analytics, a provider of technology that helps high-volume logistics providers and big-box retailers keep packages moving efficiently through warehouses and distribution centers. For Dwinell, packed show halls at ProMat 2023 confirmed what he already knew from conversations with customers.
“COVID made supply chain a household name, not necessarily in the best ways, but what happened was that a lot of companies had these multiyear plans, and then they realized with COVID they had to implement them now,” Dwinell said. “What we’re seeing when we talk to customers is an even greater acceleration. They survived the supply chain challenges of COVID and the projects they really wanted to get to but hadn’t been able to—now they are.”
The market for automatic identification and data capture (AIDC) technology—Siena Analytics’ niche—is expanding at a healthy clip, part of the overall surge in the global supply chain analytics market, which is growing 17.8% annually and is projected to hit $22.5 billion by 2030, according to Grandview Research.
From Booth S3791 at ProMat, Chelsea Mori, VP of marketing for MHI member Osa Commerce, saw one of the trends driving demand for visibility tools in real time—a new urgency among retailers and brands to gain control of their supply chains and sweat details once left to their 3PLs.
With the explosion of ecommerce, the rise of microfulfillment and the complexities of omnichannel supply chains, retailers are more interested than ever in finding answers to a question Mori heard frequently at the show in March: “How do I track my package from beginning to end?”
Osa was showcasing its Unified Commerce Platform, a cloud-based, software-as-a-service tool companies can use to integrate data from their existing warehouse management system and other point solutions into a single platform and share it internally through a control tower and across their network.
“At ProMat, we received more interest from retailers where in the past it had been 3PLs,” Mori said. “Retailers are trying to own the product journey and now cannot be reliant on their 3PL partners to ensure they are getting everything they need.”
Collaboration across the chain
Mori calls Osa Commerce’s new product offering a tool for “collaborative visibility management,” and collaboration is indeed the engine that will drive true end-to-end supply chain visibility. Without supply chain partners working together to share data and technology, increased resilience and all of the other potential benefits of visibility will go unfulfilled.
Siena Analytics, a unit of MHI member Peak Technologies, has been working with its 3PL and big-box retail customers to improve operational efficiencies in their warehouses and distribution centers using its Peak Analytics visibility tool that integrates scanned package data, photos and AI-generated insights that can be shared with vendors to help them identify and fix vendor compliance issues.
“The big emphasis now is taking that technology and bringing it out to all the suppliers so that they can improve on the outbound side,” Dwinell said. “That way, it’s more getting it back to the source.”
An ambitious collaborative effort to enhance supply chain visibility is happening at the Port of Long Beach (POLB), which is spearheading an effort to bring ports, shipping lines, beneficial cargo owners, shippers, trucking lines and rail partners together to share data on container movement.
The Supply Chain Information Highway initiative launched in December 2021 and now has eight ports and 15-20 stakeholders involved, according to Noel Hacegaba, POLB’s deputy executive director. Starting with just one container terminal, the project is now tracking boxes in and out of all six container terminals at Long Beach.
The ultimate vision is a national digital “highway” that liberates the data to help reduce congestion at ports and enables partners across the supply chain to deploy resources more efficiently. The project already has allowed participants to more accurately track their cargo, and the benefits are expected to multiply as more ports and other stakeholders join the platform and start sharing their data.
“Shippers that are already participating and have access to the Supply Chain Information Highway are already seeing results and are energized by this newfound ability to track their containers across the supply chain,” Hacegaba said. “As we continue to educate the supply chain community about what we’re doing and how the supply chain information is designed and how it works, it’s helping to get more people comfortable with sharing data. It’s bringing people to us, and they’re asking, how do I sign up?”