Estimated reading time: 2 minutes, 15 seconds
Moving the Supply Chain
I've read quite a bit lately about changes in the way the supply chain is (or will be) connected. A lot of that conversation is centered around visibility - or more precisely the lack of visibility. What's stunning to me is that this is not a new problem. With all the technology and money being devoted to lowering costs in the supply chain, why is this still a problem?
We recently posted a link in our Buzz column about some research on supply chain disruption referencing a recent report from the Zurich Insurance Group. Here's a slice of what the report uncovered:
"In a survey of over 500 business continuity professionals from 71 countries, 75% of respondents reported that they did not have full visibility of their supply chain and that 30% did not know where they fit into any of their suppliers’ priorities. Only 12% knew where they fit into all of their suppliers’ priorities."
Really!? 75% of the surveyed companies don't have visibility of their supply chain. And those respondents covered the globe, not just the USA or even North America. Something is very wrong here. And the fact that the study was commissioned by an insurance company is telling in itself. Of the disruptions reported in the survey, 42% came from problems originating further down the supply chain than the first level connection.
So, it's obviously not enough to have visibility of traffic between the ordering company and its direct supplier. Problems start further downstream and ripple upward. They only show up when orders are impacted at the time delivery is expected.
Is there some consistent reason this continues to be an issue around the globe? I see 2 main reasons for this. The first is that top management is not aware of the specifics of the issue. They know that something is wrong, but don't have the insight down the line to be able to see the disconnects that cause the problems.
The second issue is the lack of consistent connectivity among the suppliers along the chain. Of course there are multiple reasons ranging from lack of viable technology to unwillingness to commit resources to change the problem at each step. And the normal pressure to comply with standards comes from the top of the supply chain and pushes downward - from the retailer to the supplier.
While it may be an impossible task, the reality is that the pressure to implement viable visibility technology needs to originate from the bottom of the supply chain - the various suppliers and manufacturers. The technology needs to be easier to implement than to ignore and deliver financial benefits that are otherwise unavailable. Is there any such offering available? One can only hope. Last modified on Friday, 15 November 2013