Estimated reading time: 3 minutes, 47 seconds

What is my Supply Chain

supply-chainquestionOver the years we've been discussing automating a Retailer or Grocer's supply chain. To many, this means working with suppliers or vendors that sell finished goods for resale. However there are supply chains within supply chains. So you may be wondering is "What is my supply chain?"

A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. Players in the Automotive industries like General Motors, Chrysler and Ford have succeeded over the years by requiring the providers of the parts that go into automobiles be delivered directly to the work station of a specified step on the assembly line. Companies like John Deere and Caterpillar too have been pushing their suppliers do duplicate what the auto industry has done.

Retail and Grocery have been leaders in automating their supply chain through getting their suppliers to use EDI technology. This tends to be only as good as the automated supply chain of their partners. Let's go through an example supply chain using Kroger's and Campbell Soup.

Kroger's has likely already automated processes with their supplier, Campbell Soup so that orders are sent to Campbell's for replenishment to one of Kroger's stores or to a distribution center. Perhaps there's a PO change, and when the shipments are made Campbell's is expected to return shipping information prior to the delivery and Kroger's is invoiced for that shipment. This is all done electronically. As you can image, Campbell's has their own supply chain to get to the point of being able to fill that order to Kroger's; I'd envision it looking something like this using an example of cans of chunky soup -

  •  Campbell's may have outsourced the production of process with another company branded for them so that supply chain looks like Kroger's process from order through shipping to invoicing
  •  Campbell's may be manufacturing the brand on their own so they'll need -
    •  The supplier that creates the can for the soup to deliver the cans timely
    •  The supplier that prints the labels to get those labels delivered timely. If they print the labels themselves then the supplier becomes the ink and paper vendor
    •  The ingredients that go into the soup; the meats, vegetables salts, sugars (other things on the can that we can't even pronounce)
  • Being a global company Campbell's may be doing either of the above based on what's available in various parts of the world.

Each part of the above has its own supply chain, and there is no reason why automation of these processes could not be improved as well. Don't accept the excuse that your partners can't support the technology needed, or its too hard, or I have not been asked to this before so why now. Like finished goods processes, the same tools that are used for those supply chains can be used for others. Some of your partners may need to purchase EDI translation software, so there is work to be done there. But for the other, tools such as SaaS based systems can be used so they can participate. Companies like General Mills or Land-o-Lakes are already using these tools with their partners to automate their supply chain with great success.

If you're in agreement with what I've shared and will be pursuing this further I'll caution you on a couple of things; if you're a company that is already doing EDI with as a Kroger's or Loblaw's and exchanging EDI with them, you're ikely getting orders via 875 and invoicing via 880. However these are not the same EDI transactions that you'd be using with your raw material suppliers. Make sure that you are using the transaction sets and EDI standards that are relevant to these partners

* If you are ordering finished goods from a 3PL or another manufacturer the orders may be a 940 or an 850.

* If your partner provides raw materials, then the transactions may be an 850 or an 830 - order/release.

Collaborate with your partners and use the industries standard that will give you higher adoption/compliance with more of your partners. If you or your partners are unsure go to the experts or your peers that have done this before; it's better to "measure twice and cut once"!

It's time for you processes to evolve to the next step; automating the rest of your suppliers and helping your partners downstream do the same thing. As always, if I can help in anyway, do not hesitate to ask for my assistance.

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