Melissa Clow, Social Media and Public Relations Manager at Kinaxis, has adapted slightly the Gartner five stages of supply chain visibility.
Kinaxis identifies these five stages as
- Departmental: The horizon of supply chain visibility is typically limited to walls of the department (e.g., sales, purchasing, production, and logistics). The data are shared between departments mostly in reports, emails or other on-demand exchanges.
- Functional: Supply chain visibility extends to functions, where these functions may cross departmental boundaries. For example, the function of “distribution” may include participants from sales, purchasing, warehousing, and logistics. Data deemed to be pertinent are made available to all participants in the function across departmental boundaries.
- Enterprise supply chain: At this level, a concerted effort is made to identify and share relevant supply chain data across the enterprise for both sales and operational planning and execution purposes. Transactions with external trading partners remain as arms-length exchanges.
- Multi-enterprise supply chain: A subset of what is considered relevant supply chain data begin to be shared outside the four walls of the enterprise. Efforts to collaborate with key trading partners are undertaken.
- Multi-enterprise networking: Concerted efforts are begun to create near real-time exchanges of relevant data with supply chain trading partners. This typically involves a significant investment in both IT (information technologies) and data analytics.
NOTE: The descriptions of each phase (above) are mine, not Kinaxis’.
Key challenges for SME supply chain managers and executives
Most of the SMEs (small to mid-sized enterprises) which become our clients are somewhere in the midst of stages 1, 2 or 3. The smaller the enterprise, the more likely they are to be stuck in stages 1 or 2.
Sometimes (perhaps, many times) the executives and managers do not even have the sense that there is any compelling need move beyond where they are today.
No road map
Most of the executives and managers at our SME clients begin from a position where they have no road map for moving from their current stage of very limited supply chain visibility, to the next level.
More importantly, when they read what the industry is saying about SCV (supply chain visibility), they are overwhelmed with descriptions calling for building linkages intended to exchange huge volumes of data across their enterprise (internally) and with trading partners outside the organization in the future.
I really cannot blame them for shrinking back from such a daunting task—especially if the payoff for the effort remains unclear.
Strange new territory
To the SME executives and managers, taking action to move the enterprise into the next stage of supply chain visibility must seem like a move into strange new territory.
Many times they are simply unprepared for such a move. Taking the next step to extend SCV—especially if it means extending it outside the four walls of the enterprise—requires new thoughtware regarding technologies, their effective application and use, and the forging of innovative new relationships with key trading partners.
Our job, as consultants, begins with introducing these SME executives and managers to new thoughtware.
Trading partner trust relationships
The technological hurdles are, today, easily overcome for sensible and effective supply chain visibility. On the other hand, the trading partner trust relationships that open the door for exchanging the data that lead to sensible and effective SCV are frequently much harder to achieve.
We wholeheartedly agree!
Whether you are the sender or the recipient of supply chain data in an extended SCV environment, if you are being called upon to provide or consume dozens of different data types (e.g., SKUs, forecasts, purchase orders, production orders, sales orders, inventories, shipments, and so forth) that may amount to millions of rows of data, you are justifiably skeptical.
Trust, of course, is a significant concern. But, what about just plain information overload? How will you—or, they—be able to effectively sort out what is relevant information from the noise in such a huge flow of data?
Building on a simplified data framework
We believe that, at the outset, effective supply chain visibility can be achieved between trading partners through the exchange of a very much simplified data set. (We have articulated this simplified data set elsewhere.)
If you believe that extended supply chain visibility could help your company if a way can be devised to make it both simple and effective, then we urge you to investigate further.
What are your feelings about extended supply chain visibility? At what stage is your business today? Where do you think you need to be to stay profitable in 2020?
Please leave your comments below. Or, if you prefer, please feel free to contact us directly. We look forward to hearing from you soon.