Most of the supply chain leaders would agree – a highly effective supply chain comes from comprehensive transformation of a broad set of business practices, with some help from information technology. To identify the right strategies and implement lasting changes, however, you’ve got to get your arms around your problems and the problems of your supply chain partners. How? By increasing visibility throughout the supply chain and tackling theexternal processes with your partners.

Visibility = Turn the Lights On and Look at the Processes – How many units will your customers order over the next three months, and in what configuration of features? Have your suppliers shipped what you ordered last week and are the orders complete? If you don’t know what’s coming around the corner, your production and logistics people can only react to events as they happen, forcing plant disruptions, emergency transportation costs, and unhappy customers. If you can shine a bright light on the recent and current actions of your customers and suppliers, you can anticipate change and make better decisions.

“Visibility” information takes many forms, and is most useful when it can be consolidated into a handy measurement tool. One useful form, SupplySolution’s
i-Supply Service, has been adopted as part of Covisint’s fulfillment application. On one page, the user can see the current inventory on hand and in transit, status of each item, customers’ past and future usage rates, and the latest shipments received. Automatic alerts are sent via e-mail, pager, or fax when inventory falls below minimum or above maximum levels.
In the future, capturing supply chain “events” in real time will be much more automated.

Using combinations of 2-D and 3-D bar codes, radio frequency tags, cell-based communications, and GPS, companies like Qualcomm, Savi Technology, and WhereNet are filling out the “physical layer” of data collection needed to provide more frequent and more accurate information about materials and conveyances at rest and in motion.

Collaboration = Getting to Know You, Much Better – All trading partners have a transactional relationship, and some even share lots of information about their businesses. Collaboration goes much further to take the uncertainty out of future product supply/demand through joint planning and action.

By following a specified methodology – known as Collaborative Planning, Forecasting and Replenishment (CPFR) – companies can dramatically improve supply chain effectiveness with new product and package design, demand planning, synchronized production scheduling, and logistics planning. According to the CGE&Y survey mentioned earlier, this practice is catching on: 25% of respondents indicated that CPFR has been implemented in their firms.
CPFR’s popularity is spreading beyond company-to-company initiatives to include industry consortia as well.

In July, CPFR made a key breakthrough in the consumer packaged good industry. Transora, a global B2B emarketplace, introduced the CPFR-compliant Data Catalogue. Manufacturers will enter product-specific data (package size, nutritional information, pictures of the product) into the Catalogue, and that information will be searchable by retailers who have never had access to this amount of data before. The Catalogue is a first step for global standards of data exchange within this industry.

In August, CPFR was introduced to the top five hardware stores in North America (Ace Hardware, Do It Best Corp., Home Hardware Stores Ltd., Rona Inc. and True Value Hardware) by E3 Corporation. These companies are using the CPFR approach to maintain and initiate collaborative relationships with vendors.

Supply chain visibility and collaboration capabilities are evolving rapidly, and, not surprisingly, logistics experts often disagree on where this whole effort is headed.