Journey to real-time visibility in the supply chain is a marathon, not sprint

Social media has often been quicker to track whether customers are happy with a shipment than with a shipper’s visibility system, said Jim Hendrickson, professor of supply chain at The Ohio State University.

People are more apt to post something on social media before letting the company know about the issue, said Clay Cowdery, global business performance strategist for Axway.

Cowdery and Hendrickson recently discussed visibility in the supply chain and the customer experience in a webinar on predictive analytics hosted by the Council of Supply Chain Management Professionals, an organization that includes the supply chain management and logistics industries.

Understanding what makes a perfect customer experience should be captured from the customers’ point-of-view, not whether a shipper met all its internal expectations, Cowdery said. Customers want their products shipped to the right place, on time, and in perfect condition. And, a shippers’ ability to track a perfect customer experience will allow the shipper to know whether the customer has received the shipment, and why a customer might be calling the shipper in the event of an issue.

Cowdery explained companies need operational intelligence to understand the flows of the business. Operational intelligence provides a more immediate focus on the business, including how a customer’s needs are fulfilled and how they will be fulfilled; however, business intelligence is used to drive broader, strategic decisions. Throughout the supply chain, systems are in place to monitor shipments, and information on these shipments increases the visibility in the supply chain. Some of the monitoring systems include operational intelligence monitoring, application performance monitoring and infrastructure monitoring. Monitoring operational intelligence would allow a company to determine whether one is missing work from another. Monitors for infrastructure and application performance would show whether computer systems are active.

Companies that share visibility data do so via electronic data interchange (EDI). Sometimes when the information is shared it has to go through multiple systems before it reaches the customer, Cowdery said. This can cause delays and impact the usefulness of the information. A core management system for companies has become the enterprise resource planning (ERP) system.

“It really is that final version of the truth,” Hendrickson said.

But one tool doesn’t fit all. The biggest gap has been how it manages systems between the various business enterprises. But the joke was that companies had to change their business to match the system. A business would adapt to what the system can do, Hendrickson said.

Now, the system serves as the cornerstone for order management, warehouse management and transportation management systems, Cowdery said. The ability to glean data from each system in the supply chain allows for greater end-to-end visibility. Companies need this ability to view all the systems and the relationships they represent, said Toby Gooley, editor for CSCMP’s Supply Chain Quarterly.

But movement throughout the supply chain isn’t linear, Cowdery said. For every order that takes place, more than 100 interactions and transactions happen, Hendrickson said.

“It’s really beyond a customer’s walls and applications,” Cowdery said.

Visibility in the supply chain is only as strong as its weakest link, and the supply chain is made up of multiple order management systems and multiple warehouse management systems and multiple transportation management systems. Between 15% and 20% of the largest companies “are starting to get their heads around” end-to-end visibility, Hendrickson said.

“This is a marathon, not a sprint. We are still in the early stages frankly.”

Whether service providers offer real-time data, might lead one to select another provider. But the operational intelligence will show the data, he said. Data such as this can also be used to improve customer loyalty. With the data, companies can start to analyze it to improve processes. This might include order processing and to know the average time it takes to complete.

“Operational intelligence gives us that ability to baseline performance,” Cowdery said.

Some businesses almost get paralyzed trying to determine what’s good enough, Hendrickson said. “Create a baseline to build from.” Gooley said she’s come across companies with managers who’ve had a hard time buying into top managements’ seemingly random or arbitrary goals, but operational intelligence might demonstrate why improvement is needed.

Cowdery said customer loyalty is not about loyalty programs but the customer relationship. Often, customer loyalty is confused with customer satisfaction.

“Business today is struggling with defining customer loyalty,” Hendrickson said. “I think we need to reimagine it.”