The simple fact is that in today’s longer global supply chains, product moves over greater distances and across more multinational borders than in the more localized supply chains of the past. This distance-based supply chain, whose links are forged by many supplier tiers in various low-cost countries, carries a risk in that the longer and more diverse it becomes, the more it is susceptible to unforeseen circumstances as well as fluctuations in the price of oil, increased risks of logistical disruption, and global weather disturbances. By consequence, the supply chain is rendered delicate, extended, and bloated in some way which has greatly added to the complexity of controlling the inbound flow of goods from supplier to buyer. We live in what both the U.S. military and Proctor & Gamble describe as, “VUCA times.” Volatility, Uncertainty, Complexity and Ambiguity, plus risk, are the ‘jinx’ of 21st Century supply chains.
The role of the supply chain has changed dramatically; consequently, organizations are focusing on the supply chain to help transform their businesses by:
• Altering the way they think, organize. and execute
• Looking at logistics processes horizontally or end-to-end
• Integrating information and processes within and beyond the enterprise
Supply chain celerity - rapidity of motion or action - is a necessity as today’s supply chains move at a higher velocity than in the past and extensive supply chain communications require suppliers to be more agile and responsive to your business’s needs. The timely and accurate exchange of information among trading partners is more important than ever. There is little or no tolerance for errors or bottlenecks - and anything that is not immediately corrected can result in costly delays, penalties, or potential cessation of activities for transportation providers and your organization’s trading partners.
Your supply chain is no longer bound by geography. The need to find economies of scale and lower costs will drive a further need for supply chain synchronization. Clearly, data needs to be captured and classified in a consistent manner. The key for supply chain master data management (and analysis) is the use of automation to accurately and repeatedly extract, cleanse, and classify supply chain data at a detailed, actionable level. Unfortunately, there has been little attention given to metadata design such as supplier, product and customer taxonomy.
Focusing on global pipeline visibility, which requires supply chain integration with both internal constituents (allied functions) and external trading partners (contract manufacturers, suppliers, transportation carriers, and logistics providers) is now becoming a critical competency. “But before a company can collaborate or partner with others to reduce pipeline inventory or landed cost or improve lead times, it needs to have visibility into them.” as stated in Aberdeen’s Supply Chain Visibility Excellence report.
Most of the data that organizations need to run their supply chains resides with trading partners, and typically in the systems of those partners. Companies struggle to get a unified picture of their supply chains because the information systems they have were most likely designed to operate within a single company, not across a network of companies. Today, the best companies manage business across their broader networks, not just inside their own companies. According to the whitepaper “Missing Link to SC Success” published by GT Nexus, “80% of the data a company needs resides beyond its four walls, in the systems of global partners.”
The IBM report “Supply Chain of the Future” adds in conclusion: “Globalization and growing supply chain interdependence have introduced a heightened level of volatility and vulnerability that is unlikely to subside. Uncertainty has become the norm. This new environment demands a different kind of supply chain - a much smarter one.” Therefore, adaptive responses to a VUCA environment include gaining insight, a sense of perspective, and an expanded range of options for how to respond instead of react to challenging situations through supply chain celerity.
This article part of the monthly series authored by ISM’s Logistics & Transportation Group Board Members, who are current practitioners, consultants and educators. In future columns they will continue sharing their views on a number of Supply Chain topics.
Thomas L. Tanel, CTL, C.P.M., CISCM, is the President and CEO of CATTAN Services Group, Inc., specializing in Logistics and Supply Chain issues. He is also the Chair of ISM’s Logistics & Transportation Group and can be reached at tanel@cattan.com or (979) 212-8200. Membership in the Group is open to all ISM members who are responsible for or have an interest in the Logistics & Transportation fields.
The role of the supply chain has changed dramatically; consequently, organizations are focusing on the supply chain to help transform their businesses by:
• Altering the way they think, organize. and execute
• Looking at logistics processes horizontally or end-to-end
• Integrating information and processes within and beyond the enterprise
Supply chain celerity - rapidity of motion or action - is a necessity as today’s supply chains move at a higher velocity than in the past and extensive supply chain communications require suppliers to be more agile and responsive to your business’s needs. The timely and accurate exchange of information among trading partners is more important than ever. There is little or no tolerance for errors or bottlenecks - and anything that is not immediately corrected can result in costly delays, penalties, or potential cessation of activities for transportation providers and your organization’s trading partners.
Your supply chain is no longer bound by geography. The need to find economies of scale and lower costs will drive a further need for supply chain synchronization. Clearly, data needs to be captured and classified in a consistent manner. The key for supply chain master data management (and analysis) is the use of automation to accurately and repeatedly extract, cleanse, and classify supply chain data at a detailed, actionable level. Unfortunately, there has been little attention given to metadata design such as supplier, product and customer taxonomy.
Focusing on global pipeline visibility, which requires supply chain integration with both internal constituents (allied functions) and external trading partners (contract manufacturers, suppliers, transportation carriers, and logistics providers) is now becoming a critical competency. “But before a company can collaborate or partner with others to reduce pipeline inventory or landed cost or improve lead times, it needs to have visibility into them.” as stated in Aberdeen’s Supply Chain Visibility Excellence report.
Most of the data that organizations need to run their supply chains resides with trading partners, and typically in the systems of those partners. Companies struggle to get a unified picture of their supply chains because the information systems they have were most likely designed to operate within a single company, not across a network of companies. Today, the best companies manage business across their broader networks, not just inside their own companies. According to the whitepaper “Missing Link to SC Success” published by GT Nexus, “80% of the data a company needs resides beyond its four walls, in the systems of global partners.”
The IBM report “Supply Chain of the Future” adds in conclusion: “Globalization and growing supply chain interdependence have introduced a heightened level of volatility and vulnerability that is unlikely to subside. Uncertainty has become the norm. This new environment demands a different kind of supply chain - a much smarter one.” Therefore, adaptive responses to a VUCA environment include gaining insight, a sense of perspective, and an expanded range of options for how to respond instead of react to challenging situations through supply chain celerity.
This article part of the monthly series authored by ISM’s Logistics & Transportation Group Board Members, who are current practitioners, consultants and educators. In future columns they will continue sharing their views on a number of Supply Chain topics.
Thomas L. Tanel, CTL, C.P.M., CISCM, is the President and CEO of CATTAN Services Group, Inc., specializing in Logistics and Supply Chain issues. He is also the Chair of ISM’s Logistics & Transportation Group and can be reached at tanel@cattan.com or (979) 212-8200. Membership in the Group is open to all ISM members who are responsible for or have an interest in the Logistics & Transportation fields.
