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"At Inovis, we specialize in putting together the pieces that comprise your
supply chain. We manage disparate systems, solve day-to-day communication issues and synchronize the multiple standards and formats of B2B trading partners."
Source: Inovis
Actionable Supply Chain Intelligence : Leveraging the Services Hub
Supply Chain Intelligence is also known as :
Supply Chain Intelligence,
Supply Chain Strategies,
Supply Chain Event Management,
Supply Chain Visibility,
Supply Chain Technology,
Global Supply Chain Intelligence,
Supply Chain Management,
Sourcing Supply Chain,
Supply Chain Logistics,
Supply Chain Procurement,
Supply Chain Intelligence System,
Supply Chain Intelligence Solution,
Supply Chain Intelligence Software.
Introduction
There is no question that supply chain visibility is a requirement for any company
competing in today's global marketplace. After all, you've got to be able to see
something if you want to manage it, especially if that something is as vital to your
business as your supply chain, right? Okay, now that we're all agreed on that, can
we also agree there's a lot of disagreement out there about exactly what supply chain
visibility is ' it seems to differ from one company to the next ' and, just as
important, how to achieve it?
If you answered "yes" to that question ' or even if you didn't ' we at Inovis
respectfully suggest that it's time for all good trading-community partners and their
suppliers to step back, take a deep breath and collectively blow away all the fog
that's obscuring our visibility. With that goal in mind, we have put together this
White Paper which will, in plain English:
- Offer a clear and practical definition of the term "supply chain visibility"
- Spell out just how much supply chain visibility a company can realistically
achieve today
- Provide a step-by-step approach to achieving that visibility, specifically by
combining a company's existing IT assets with some carefully-selected new
technology.
Speaking the Language of Supply Chain Visibility
Exactly What Does It Mean?
Just about everyone in the business world understands by now that supply chain
visibility is a really big deal. Mention the term, and people will nod and say that
every company absolutely must have it in order to be a player in the global
marketplace. They'll tell you that it lowers your inventory and therefore your costs,
shows what replenishment shipments may be late so you can minimize stock-outs,
and generally makes your operations more efficient and helps you respond better and
smarter to changing market conditions.
They're right. However, if you ask 10 people to define "supply chain visibility," you'll
probably get at least nine and a half different answers. For example, one individual
might say it means the electronic notification of document errors such as missing
elements or matching errors. Another would define it to be the validation of
compliance with Terms & Conditions (T&C) and/or Service Level Agreements (SLAs)
contract language, done by comparing them to business rules such as late deliveries
or short-ship errors. A third person might say it's the ability to gain access to data
within your suppliers' suppliers and third parties, so you can predict when supply
chain problems might occur and then take action to prevent those problems from
cropping up in the first place. Yet another individual might define "supply chain
visibility" to mean a method to identify weak links in your business processes and/or
hidden labor or opportunity costs.
What It Does Not Mean
Although all of those examples at the very least
identify some elements of supply chain visibility,
none really defines the term fully.
Maybe it would be easier to figure out what the
term means by first stating what supply chain
visibility is not, and that's really easy to do.
Supply chain visibility is not reporting. A report is
nothing more than a snapshot of something that's
already occurred, a glance in the rearview mirror,
as it were. By the time you get the information
contained in a report, it's too late to do anything
about it. In other words, a report only allows you
to monitor your trading community's history 'and
only a tiny chunk of its history at that. Oh sure,
you can use reports to identify historical trends,
possibly even define triggers for these trends, but
there is little value in that, because you obviously
can't do anything to affect events that already
have taken place.
Let's Ask the Experts
Now that we know what it is not, let's take a look at how some leading business
consultants and researchers define "supply chain visibility." According to AMR
Research, it is something that provides "the real-time, micro-level view needed to
perform the critical functions of monitoring, notifying, simulating, controlling and
measuring." Noha Tohamy of Forrester Research defines it as "a firm's ability to
collect and analyze distributed data, generate specific recommendations and match
insights to strategy." Tompkins Associates defines it as "built-in messaging and data
transport that can allow your partners to know the items you need as soon as you are
aware [that you need them]." Kai Trepte, co-founder of supply chain consulting firm
John Galt Solutions, says it's about "balancing supply and demand and using the links
in the chain to understand how each impacts your entire business."
Information That Puts You Ahead of the Curve
So we can boil all this down into a pretty basic definition. Inovis defines visibility as
something that 1) gives you the kind of information you need ' when you need it
and in the right context ' to make solid business decisions, 2) can drill down into the
violation details to determine root cause and 3) provides tools that present that
information in such a way so that you not only can make those decisions but also act
on them immediately. Visibility really is Actionable Intelligence.
With right-time data appearing on a real-time dashboard, you actually get useful
intelligence, culled from moving or "in flight" data, that allows you to act, not simply
react. In other words, supply chain visibility allows you to predict events before they
occur and, if necessary, make adjustments and corrections immediately, so that you
can affect what is in your supply chain now.
Measuring the Value of Visibility
The More Data You Get, the More Value You Get
Now we come to the issue of why supply chain visibility is so important to companies
and their trading-community partners. As mentioned earlier, it can boost operating
efficiencies and strengthen a company's ability to compete in the marketplace.
However, the operative term there is "can." Whether a given company actually
achieves these benefits depends a lot on how deeply it can see into the supply chain
and how well it uses the data to make decisions. Obviously, the more information a
company has about supply-chain transactions, the more value it gets from supply
chain visibility.
We can classify that value into three distinct categories, according to the amount of
supply chain information available:
- Low value - This is what you get from data validation, for example, reporting and
scorecards. Basically, you are looking backward in time, meaning, you're monitoring
activities and events that already have occurred. Furthermore, data validation
typically relies on a single source of information or, at least it is very dependent on
one source.
- Medium value - This is what you get from a visibility dashboard, for example. With
the information presented there, you can measure, match and manage some supply
chain transactions and/or problems. Because the information comes to you in real
time and from multiple sources, it alerts you to some issues, allows you to take basic
corrective actions and maybe even helps you to spot some trends.
- High value - This kind of supply chain visibility may not make you psychic, but it
does allow you to predict future events and issues and take steps to head off any
problems. For example, separate business process management/business activity
management (BPM/BAM) software can model events using real-time data to give you
predictive information and also can adjust processes to address those situations in
the future ' the kind of information you can use right now to adjust and improve
supply chain operations. That degree of visibility translates into top-of-the-line value.
Building a Visibility Solution
Start with the Basic Ingredients
Before we talk about a specific solution, we need to emphasize that any effective
visibility solution is one that gives you not just data but timely data and the data that
is important to your business. The more data sources you have, the greater potential
your chances of getting degraded data, simply because the age of data within one
source can dramatically affect the quality of all the data you receive.
With that in mind, let's take a look at what you need to put together a visibility
solution that gives you timely and useful data. To get realistic, achievable supply
chain visibility today, you need five things:
- integrated data stores which allow secured common or defined community
access to business transactions and information;
- event-monitoring and alert tools that notify you of events and give you a
heads-up on status exceptions, developing trends and human workflow;
- collaboration, based on shared visibility up and down the supply chain, so
that trading partners can see the same information and work together on
trending theories and exception corrections; and
- performance management, so you can measure your suppliers'
performance, in terms of service levels, processes and document delivery.
Where can you access most of your real-time supplier or partner data today? In your
VAN or Services Hub.
Use Your Services Hub for All It's Worth
There are some potential visibility solutions out there today, but all of them are just
that ' potential. Web Services, for example, still consist mostly of point-to-point
coordination and development efforts. By the time you finish one Web Services
initiative, another model surely will have come along that requires changes. What
company has the time or budget to keep chasing a moving target?
Carbon-copying all business transactions to a central repository doesn't seem like a
great idea either, because that model has some latency and security issues. Given
the growing importance of regulatory compliance, using an unproven business
partner that has access to your vitals is just asking for trouble.
The fact is you already have most of what you need to improve your supply chain
visibility and thereby cut costs and get a leg up on the competition. It's your value
added network (VAN) or Services Hub. Just as EDI grew into the concept of Value
Added Networks, the traditional VAN, in some cases, has evolved into a Services Hub
' a hub of valuable supply chain data that can serve as a consolidated system of
record for business community and supply chain data. You can extend this collection
of real-time, transactional data from the supply chain to services or applications
beyond Purchase Orders, Advanced Shipment Notices and Invoices. In other words,
you can use the Services Hub to extend the breadth and depth of data and, by doing
so, obtain actionable intelligence. Consider the following points:
- Most of your trading partners already are on your VAN or Services Hub.
- Using the data that is in your existing trading documents, you can measure
your top half-dozen or so key performance indicators (KPIs).
- You can extend your supply chain visibility by getting your smaller suppliers to
send you their data via Web-based interfaces (Webware).
- Your suppliers' suppliers can send, via their existing EDI processes, orderpipeline
and inventory levels.
- Once you are seeing value from your existing trading documents you then can
expand those KPI measurements incrementally by using service-oriented
architecture to mine data sources within your own applications, as well as
those of your suppliers and third parties.
- Thanks to proven VANs, such as Inovisworks, you have all the connectivity '
reach, bandwidth and scalability ' you need to get all the timely data you
need to make smart, forward-looking business decisions.
- As an added bonus, your VAN is a mature file-transfer and aggregator agent.
It is not geared to any particular supplier or industry, so it can handle any and
all formats and protocols that you, your suppliers and your suppliers' suppliers
want to use.
A Step-by-Step Strategy
Evolving from Here to There
The end-state utopia is the place where your supply chain 1) gives you all the
predictive information you need to make good decisions, and 2) if you want, can
make those decisions and adjustments for you with its self-correcting intelligence. To
evolve to that utopia ' and "evolve" is the operative term here, given the maniacal
pace of technology ' you need a step-by-step strategy. Here you go, neatly
packaged and ready for execution:
- Step 1 - Identify your most important processes and out-of-bounds events that will
have the greatest impact on your business. As you're aware, 20 percent of the
causes produce 80 percent of the effects. That means you need to define your
business processes; define the rules for the thresholds/sequence of events that can
cause problems; and finally, add measurable KPIs, either at the departmental or
corporate level. Translation: what good is supply-chain visibility if you can't
recognize anomalies and trigger actions?
- Step 2 - Ask your VAN or Services Hub partner what visibility capabilities it has
today that you can use immediately and also extend to your existing trading partners.
Identify documents used in your supply chain, identify upstream and downstream
trading partners and determine by how much or how little they are separated from
their trading partners. Map them with your VAN and spell out a way to bring in
additional trading partners.
- Step 3 - Using the information you collected in Step 1, identify the kinds of data for
which you need visibility, i.e., the relevant, right-time data.
- Step 4 - Identify analysis rules, exception thresholds and what possible actions you
would need to take for exception situations.
- Step 5 - Garbage in, garbage out. Analyze ways to make data consistent across
suppliers, documents, maps, and systems. Normalize and rationalize the data
elements so the rules engine in the visibility system can compare apples to apples. A
data quality centric visibility system should be able to translate the incoming data
post receipt so you don't have to modify the actual document data.
- Step 6 - Work with your provider to make that data available in a dashboard format
on a secure Internet Web page that's accessible around the clock, using secure
authentication. Share those views with your suppliers and customers. Rather than
penalizing them after the fact, collaborate with them on fixing issues.
- Step 7 - Identify who in your company is responsible for using the visibility solution
to monitor processes and make decisions. It should be the data owner and not the
B2B/EDI group. Also spell out how each user, depending on his/her role in the
company, may consume data.
If You've Got It, Flaunt It!
Despite all the hype about visibility software solutions, this is by no means a mature
market yet. So, why waste money, time and effort on half-baked technologies? You
have in your company right now probably 80 percent of the data you need for a good,
workable visibility solution. By leveraging the technology you also have right now--
your VAN and Services Hub ' and by carefully choosing extension technologies, such
as Webware and select Web Services, you can get access to all the data required for
the best-possible kind of visibility solution ' one that will deliver more and more
value to your company over time.
About Inovis
Inovis is a leading provider of on-demand Business Community Management
solutions that empower companies to transact, collaborate and optimize
communications with their entire trading community. By standardizing and
automating mission-critical business interactions, companies can dramatically reduce
the complexity and cost of supply chain communication. This foundation of highquality,
reliable and secure connectivity provides real-time visibility across the orderto-
payment lifecycle. The resulting actionable intelligence enables users to proactively
address supply chain issues before they impact profitability, shortening cycle times,
improving productivity and increasing customer satisfaction.
With more than 20 years of expertise, Inovis delivers its products and services to
more than 20,000 companies over a wide range of industries and markets across the
globe.
Inovis Global Headquarters
11720 AmberPark Drive
Alpharetta, GA 30004
USA
Main +1 404.467.3000
Toll-free +1 877.446.6847
Fax +1 404.467.3730
Email: info@inovis.com
Website: www.inovis.com
- Speaking the Language of Supply Chain Visibility
- Measuring the Value of Visibility
- Building a Visibility Solution
- A Step-by-Step Strategy