Mitigate Risk Through Improved Visibility

Mitigate Risk Through Improved Visibility by Wendy Buxton

Production planners and operations managers across industries face a common frustration: They often find themselves chasing down item-level details and putting out production fires instead of proactively optimizing operations. What’s the primary cause? Visibility in their inbound and upstream supply chains is cloudy, incomplete, or missing altogether.

Even when internal processes are optimized, many managers feel they don’t have any control over what happens outside their four walls. For many companies, supply chain visibility effectively disappears in the time between purchase order generation and delivery of goods at the receiving location.

When supplier shipments and schedules are unpredictable, there is a high degree of risk. The typical tactic to reduce that risk is to overstock inventory to avoid shortfalls. This approach is obviously expensive and risky in its own right. So how do an organization’s decision-makers gain control and visibility of their supply chain?

The answer lies in technology

Business leaders need IT solutions that provide insight into supplier activity at a very specific level — down to the individual parts in an order. This technology creates control and predictability, thereby reducing risk and high-cost inventory stocking while forging a stronger relationship with suppliers.

IT-enabled transparency provides numerous benefits:

• Improved business-to-business (B2B) collaboration
• Reduction of supply chain uncertainty
• Prevention of lead-time fluctuations, disruptions, reduction, and prevention
• End-to-end inventory visibility positioning — in motion, at rest, and at expected waypoints

How would this type of solution work at the operational level? Organization leaders implement internal IT tools that include portal interfaces. Through those portals, suppliers can create highly detailed order fulfillment records. Company employees log all purchase orders, and suppliers can reference those orders, record their fulfillment of every part number and item on the list, and include details about the shipment.

This interface allows both parties a central location for confirming what was ordered, what was fulfilled, when it shipped, and when it arrived.

Drilling down into the details

At a more detailed level, organizations and suppliers gain global visibility through continuous technology touch points.

• Order acknowledgement matched to purchase order
• In-transit status events at order-line and shipment levels
• Customs clearance
• Carrier pickup of goods
• Advance shipment notice created and matched to purchase order
• Supplier production process events
• Projected production plans
• Raw material arrival at supplier
• Electronic proof of delivery

This level of visibility allows both parties to agree upon and implement best practices, establish an escalation policy workflow, and coordinate supply chain resiliency and disruption reduction efforts. Supply chain partners can then:

• Monitor logistics bottlenecks and adjust plans and routes to avoid congestion.
• Have suppliers drop-ship orders directly to customers.
• Treat in-transit inventory as available inventory for safety stock calculations.
• Redirect in-transit orders to higher points of demand.
• Change routing instructions to ensure goods arrive on time.
• Change pricing or promotion activity based on actual landed cost.
• Keep the supply chain moving.

The benefits of such a detailed IT solution are obvious, but it is not without challenges. The main hurdle is that the solution requires collaboration and cooperation from all parties. However, this requirement for cooperation doesn’t have to be a drawback: It also fosters stronger relationships. 

The ordering company gains better control over inventory and greater predictability while the supplier gets the ability to clearly demonstrate fulfillment. The shared portal provides a record for both parties and encourages easier and better collaboration, making it a win-win for all parties involved.

Does it exist? Yes.

Where can you find an IT solution that provides this granular level of visibility? LynnCo’s SuiteEdgeTM includes the SuiteOrder module, a comprehensive supplier accountability tool that’s purpose built for exactly this need. This module organizes and tracks data to ensure maximum visibility. Members of your organization and your suppliers can easily view all initiated shipments and bills of lading. And you can review the status of shipments as they move through the transportation cycle.

This approach improves visibility of supplier activity, reduces paper-intensive processes, increases supply chain flexibility to reduce risk, and ensures that you have the agility to implement alternate sourcing strategies when necessary.

The right technology solution gives you control over what goes on within your four walls — and wherever your supply chain reaches.

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