Synchronizing supply chain partners. Slashing inventory carrying costs. Improving customer service. Speeding cash flow. Expediting customs. Optimizing manufacturing schedules. All are enabled by � and require � 20/20 supply chain visibility. Trying to run a supply chain without real visibility into the process is a lot like trying to hit a major league fastball with both eyes closed.
IT investments leading to improved information visibility and adoption of just-in-time processes have spurred significant supply chain enhancements. Over the past decade, the result has been a 34% reduction in the ratio of inventory to sales, a $4.6 trillion reduction in total business inventories and a 10% improvement in cash cycle times (Source: U.S. Statistical Abstracts; U.S. Dept. of Commerce; Cass and ProLogics �State of Logistics Report � 2002�).
A lean, efficient supply chain requires precise management of the three flows of commerce � goods, information and funds. Today, information about a shipment is nearly as important as the shipment itself.
Supply chain visibility � the ability to capture and leverage that information � has come a very long way in a very short time. Today, drivers carry sophisticated wireless clipboards that scan computer-generated �smart labels� on packages and beam information to massive digital databases. As a package speeds through a delivery network, it�s scanned dozens of times by wireless optical scanners, some perched on the wrists of workers helping to guide its journey from trucks to cargo jets to high-speed conveyor belts and back to trucks � until the recipient signs the electronic clipboard carried by another driver in another city, and even more information, including that digitally captured signature, is beamed to the database.
The result is a tidal wave of digital information regarding goods moving around the world. That information is powerful, but it isn�t helping you manage your supply chain by sitting on a computer server somewhere. The challenge is accessing the information that�s most important to you and your customers, in the way it can offer the maximum benefit.
Fortunately, a broad range of Internet-enabled visibility tools is available to help you do just that. There likely is one or more that suits your company�s particular needs very well, whether you manage your own fleet of trucks or contract your entire supply chain to a 3PL. What�s more, some are available at no charge, as value-added services.
Visibility tools range from simple to complex, from those that require you to access them on a delivery company�s Web site to those that proactively sift out information that�s most critical to you and deliver it to your inbox � or import it directly into a desktop spreadsheet or database application. The most basic visibility tool is tracking. Based on �smart labels� and optical scanner technology, tracking � of packages, pallets or freight containers � is the building block of visibility services, and is offered by most shipping companies.
For an idea of how quickly the demand for visibility has grown � and how the process has shifted to the Net � consider the explosive growth in online package tracking requests. In December of 1995, during the height of the holiday �peak season,� we first received more than 100,000 online package tracking requests in a month. The following year we surpassed 1 million requests in a month, in December of 1997 we reached a million requests in a week, and in December of 1998 we surpassed one million requests a day.
Many of these requests are generated by people who go to our Web site to track their packages. But increasingly, they�re coming directly from the Web sites of the hundreds of thousands of companies who now offer package tracking on their own sites as a service to their customers � and to generate more site traffic.
Other visibility solutions are more advanced and more specialized. A finance department can use a confirmed delivery notice to automatically trigger invoices and can customize its view to see all outstanding C.O.D.s. A customer service department can elect to receive � and have its customers receive � proactive e-mail notification when a package is shipped, when it arrives or if it�s delayed.
When Hard Rock Cafe ships a Jimi Hendrix guitar, Beatles memorabilia or a computer server to one of its 113 locations worldwide, e-Commerce Fulfillment Manager, Paul Farah, uses an Internet-enabled visibility application to closely monitor when an item is ordered, when it is sent, when it arrives and why a delivery might be interrupted � by weather or customs, for instance.
Farah can set a default so he�ll be alerted by e-mail if a problem occurs, rather than having to review every entry. That allows him to address the issue and provide customer service proactively. He estimates the feature saves him �three hours a day... and time is money.�
Most shipping companies offer supply chain visibility solutions; it�s worth your while to ensure those you deal with offer the solutions that are right for you. If not, don�t be afraid to shop around.
Jordan Colletta is vice president of e-commerce marketing for UPS. For more information visit ups.com or call 800-PICK-UPS.
Tips For Improving Supply Chain Visibility
1. If you use a delivery company to move your goods, request a meeting with your account manager to ensure you�re taking advantage of the visibility services that best fit your business. Many of these solutions are available as value-added services.
2. If you�re considering a software application to help run your business, look for one with visibility tools built in. Many prominent software companies work with major shippers and 3PLs to strengthen their applications by integrating tracking and other shipping tools.
3. Don�t limit visibility information to the shipping department. For example, the finance department can use a confirmed delivery notice to automatically trigger invoices, cutting days off payment cycle times. And it can use electronically generated information about who initiated a shipment to easily assign billing charges to clients or internal departments at the end of the month. The customer service department can proactively contact customers when it receives information that a shipment is in route, or that it�s been delayed, enhancing customer relationships.
4. Integrate visibility tools into your own Web site, or other customer-facing components of your operation. Not only does it allow you to improve service to your customers and cut down on �where�s my order� phone calls, but it also drives additional site traffic as customers return to check on the status of their orders.
