Supply chain visibility was all the rage at one time. The trade publications were chock full of articles and interviews. Conferences were held and keynote addresses spoke to "visibility" to no end. Experts sprang up overnight, and consultants mined the hot new topic for all it was worth.
What it was worth to them, perhaps, was plenty. What it was worth to others was questionable. The furor seems to have died down. Why? What happened?
We think that one reason the furor died down is that visibility is here—a commonplace that we often take for granted. As recently as a dozen years ago, a leading apparel retailer, with genuinely global sourcing and very dense national distribution, conceived a vision for a "glass pipeline" that would provide total supply chain visibility. It knew what it wanted, but it did not have the tools and resources to achieve it. That's no longer an issue. We submit that visibility—at least at the data level—has become table stakes for software providers in all facets of the supply chain business. Maybe this development was a natural evolution, maybe it gained momentum from the visibility craze, or maybe it got a big push from the parcel carriers.
We were suitably impressed a few years ago when FedEx and UPS made what was once a dream—the ability to inform customers of a package's precise location and status at any stage of its journey—a reality. Of course, nowadays you can track it yourself, online, using their systems.
Then, it became "normal" for third-party logistics service providers (3PLs) in the fulfillment business to be able to provide up-to-the-minute information on the status of any order, at any processing stage, to their customers. As you might expect, the customers can now look for themselves, using the 3PLs' Internet-enabled systems.
So, some level of visibility is just about everywhere today. Visibility has become an integral component of all of the big application areas: customer relationship management (CRM); collaborative planning, forecasting and replenishment (CPFR); warehouse management and yard management systems (WMS/YMS); transportation management systems (TMS); product life cycle management (PLM), and so on and so forth. For a long time, the sole holdout was Reverse Logistics (RL). But that bastion has also fallen, with recent announcements of visibility enhancements to RL software, most recently by Newgistics.
Visibility's not the issue
Still, seeking visibility for its own sake would be to miss the point, warns Dr. Lawrence Lapide. Lapide, who is research director at the Massachusetts Institute of Technology's Center for Transportation and Logistics and head of its Supply Chain 2020 project, contends that visibility is not, and never was, the real issue. What matters is what one does about things—conditions, events, trends—that have become visible. At the end of the day, informed action trumps information alone.
Mere visibility—the presentation of data—doesn't have much meaning. It takes some work and planning to construct systems that transform and translate data into information. And it is visible information, not visible data, that can be acted upon to correct or even prevent problems.
Furthermore, there's another component to the equation, and that is that information itself really needs to contribute to intelligence if resulting actions are to be on-target and effective. Sometimes enough context and logic can be built into systems—think decision trees—to permit the leap from data/information to intelligence, and sometimes analysis by the comparatively weak and inefficient human brain is still needed. Information without context is a messy, tricky thing, and related actions can have unintended consequences. Think of trying to eat a fully loaded hamburger without the bun.
For example, it's not helpful to know an onhand inventory quantity. But it's vital to know that there are only three days' worth on hand. But that, in itself, is not useful—it could even be misleading—if a three-month supply is scheduled to arrive tomorrow. That, in turn, is not completely useful unless there is evidence—OK, visibility—that the truck carrying the new shipment is on time and is within 100 miles of its destination.
If more is not on the way, or if the expected delivery is not sufficient, or if the demand has increased, automatic preparation—and presentation for approval—of an electronic purchase order (for expedited delivery, if necessary) is the right way for a system to both provide visibility and promote informed action.
In the opposite case, if the on-hand quantity represents a three-year supply, the system should stimulate disposition and/or support cancellation of any open orders.
Not all visibility is limited to the world of traditional information systems. The kanban system popularized in manufacturing relies on a card—a visible signal for replenishment action. A modern application of the principle developed by Visible Inventory Inc. provides visibility to inventory status at the SKU/bin level. Beyond that, it relies on built-in sensors to determine whether quantities are at reorder points, or at critical levels, and triggers replenishment orders.
The China syndrome
The rapid expansion of international sourcing adds major complexity to the visibility/information/intelligence puzzle. The idea that an international shipment can involve 20 or so physical and informational touch points, along with performance variability of perhaps as much as 40 percent, migrates from the category of frightening to terrifying when some of the operating partners in a global supply chain don't offer integrated visibility in the systems they use. As a consequence, we've regressed (not all, but most of us) to some extent in the age of globalization, stimulating a renaissance of management by hope and other dangerous tactics. That problem is being addressed with new generations of trade management tools that ought to provide long-distance visibility across a global supply chain, and the necessary levels of actionable intelligence on such issues as trade rule compliance. As on the domestic front, visibility merely opens the door to good management—it does not provide it.
Now that we've got more visibility than ever before, it may be time to get introspective about whether we're doing more problem solving—and problem prevention— than before. Keys to success in this arena begin with individual intellectual curiosity—yours. But it requires institutional initiative as well.
Cultures that emphasize, and reward, pro-action and flexibility are, we suspect, found within the companies that are taking advantage of information visibility. They are probably also those who are best at moving up to the level of intelligence— that's G-2 intelligence (military-type intelligence), not IQ intelligence—for the most effective use of what visibility now brings us on a regular and routine basis.