Visibility Blog Post #3 - Closing Visibility Gaps

Secure Your Supply Chain by Closing Critical Visibility Gaps

This post is part 3 of a 3-part series exploring the topic of visibility.

Supply chains never rest and losing sight of freight is a concern that keeps many supply chain managers up at night. And, yet despite the increased need for 100 percent visibility, many supply chains are still plagued by preventable gaps where their freight might fall into a blind spot. In fact, only 6 percent of companies say they have full visibility of their supply chains today, according to the Geodis 2017 Supply Chain Worldwide Survey.

Blind spots are where risk of damage, delays, and cargo loss are most likely to happen. Each piece of a company’s supply chain is reliant on what happens upstream, and lack of visibility can cause chaos in downstream activities. Just a single gap can cause the entire supply chain to suffer.

It’s time to shine a light on inefficiencies and gaps in your supply chain, connect the disconnected, and create a plan to reduce or eliminate those gaps altogether. Greater visibility can improve inventory management, reduce costs, boost customer satisfaction, lower risks, improve compliance, and streamline transportation operations as a whole. In short, every key performance indicator gets better as visibility increases.

WHERE ARE THE MOST COMMON GAPS?

Supply chains are large and complex networks, and visibility gaps can occur at any of the many connection points. Within the larger network, there are key areas that supply chain managers need to keep a closer eye on based on recent industry research.

The top-five most common blind spots, according to the 2016 American Shipper Visibility Benchmark Study, are:

1. Inside origin container terminals
2. Inside destination container terminals
3. Port-to-port legs
4. Drayage at destination
5. Less-than-truckload (LTL) legs

For 3PLs, rail legs and final mile are also listed as top blind spots.

In the American Shipper visibility study, LTL and less-than-container loads (LCL) were listed as the worst modes for visibility among shippers. The study’s authors explain that anytime cargo is being consolidated that shippers lose considerable visibility. The authors write that “…in practice, nearly every company with visibility has one or more blind spots—areas where it loses sight of in-transit shipments, or where data accuracy is inconsistent.”

In discussing the visibility issue recently with a logistics service provider (LSP) that handles US-Mexico cross-border shipments, the company’s president explained how if you are a broker and you aren’t paying attention and don’t know the nuances, you could have freight that just sits at the border if you don’t have a carrier and you’re not pushing, checking, and validating. A Transportation Management System (TMS) can help put a flag on those shipments and alert the broker when a shipment gets to the border, so the broker knows when to follow up. Technology is indispensable in closing visibility gaps.

FOCUS ON THE BIGGEST GAP – TECHNOLOGY

In today’s always-on, interconnected world, it’s surprising that we can still have so many weak spots where manual processes take over. The key to closing visibility gaps begins with a focused effort to digitize every phase and link of the supply chain. With a fully connected supply chain, where systems are passing information from one system to another, freight is less likely to fall into one of these dark zones.

When it’s set up and operating correctly, technology can pass data in real time, reducing latency, breaking down siloes, and removing manual data processing. But let’s face it, even in the age of the internet of things (IOT), machine learning, and big data, dark spots still happen. So how do we close down these remaining, and sometimes elusive, gaps?

Digitization of the supply chain is still evolving. As recently as 2016, most shippers were still using Enterprise Resource Planning (ERP) systems as the predominant source to feed visibility tools. Less than half of shippers are using a modern TMS, which would provide the right set of tools to address visibility. To learn more about how a TMS with an ERP can help you keep up with the speed of modern commerce, read this white paper, The Case for ERP and TMS Integration.

A dedicated TMS can put you in control of your business by providing:

• A one-stop shop for real-time visibility of shipments across trading partners.
• Complete visibility of the supply chain both at the control tower and site levels.
• System integrations and carrier connectivity to actively monitor deliveries, pick-ups, and points between.
• The ability to see the real-time data for freight movements.

Eventually, as more systems are integrated, and freight can be can tracked at more points along the most-used lanes, it will create a more fully connected supply chain. Latency of data will fall closer to zero, so that we can act on any variances sooner. It starts with tracking real-time information from hundreds of checkpoints across the supply chain. This data can be used to alert supply chain managers when freight veers off track or is delayed.

THE FUTURE OF VISIBILITY – BLOCKCHAIN

We are hearing more and more about the promise of blockchain and the distributed, digital ledger. A key area where blockchain could potentially impact the supply chain is in providing improved visibility. But how?

In the 2018 Third-Party Logistics Study from Infosys Consulting, the authors explain that “data generated through blockchain technology could provide more opportunity to analyze information…” and “… blockchain closely tracks and transmits timely data and creates transparency upstream and downstream, retailers can closely monitor inventory levels, which could lead to dynamic supply chains…”

The promise of blockchain is that every transaction is verified and distributed over multiple computers in real time, meaning increased security and accuracy. This digitized, verifiable flow of information means lower risk of human error and better overall visibility. It also will drive a new level of analytics that can be derived from the data. It could give shippers the reliability they need to make faster decisions about their supply chain.

Whether the promise of blockchain comes to fruition is yet to be seen. In the meantime, supply chain leaders will need to continue to evolve their approaches to increase overall freight visibility. This will require a bigger shift from manual to automated process and adopting new technology tools to find and close critical gaps across the supply chain.

This blog post is the third in a three-part series on Supply Chain Visibility. The first post focused on understanding the concept of visibility. The second post discussed the use of predictive analytics.