The Suez Canal was disrupted just as COVID-19 vaccine distribution operations were beginning to help the global economy recover from the pandemic’s economic impact. Now that the Canal has reopened, the global supply chain is adjusting to yet another “black swan” incident – and realising the importance of end-to-end supply chain visibility.
Those companies that haven’t yet implemented supply chain visibility are likely to face the following scenario: Knowing where your shipment is, if it is being kept in good condition, and knowing whether your supply chain is in good working order and whether all of your goods are intact would have made all the difference in minimising your disruption and allowing you to plan more effectively in the weeks following the disruption.
Even on a perfect sunny, trouble-free logistics day, supply chain employees are constantly confronted with thousands of “mini-disruptions” that may not make the news. Delays, missing connections, condition extremes, tampering, forgery, and packages left behind are all examples.
The cumulative impact of these mini-disruptions can quickly pile up, resulting in the same negative business impact in a month or a year as the Suez Canal blockage event did in a day.
According to Lloyd’s List, more than $9 billion in commodities flow through the 120-mile Suez Canal every day, equating to about $400 million each hour. Even if your items were worth a thousandth of that amount, and just 1% of that was affected, that would equate to an impacted portion of inventory (working capital) of over $96,000 each day, or nearly $35 million per year.
And that’s where end-to-end supply chain visibility makes a big difference, whether you’re dealing with little disruptions or major black swan incidents.
What does it mean to have visibility across the whole supply chain?
The term “end-to-end” is generally used to describe the coverage i.e. visibility from node to node, door to door, origin to destination, or from the manufacturer to the end customer.
There is a second component also to true end-to-end supply chain visibility that is rarely discussed. This second dimension refers to the totality of value you gain from knowing what is happening in your supply chain network from origin to destination. It’s all about whether the information you get is actionable. Is it simple to digest information and make important judgments while on the go? Do you trust it enough to use it to automate your logistics by triggering business procedures and guiding frontline response?
Bill Gates famously said, “The first law of any technology employed in a business is that automation applied to an efficient operation will magnify the efficiency. The second point is that automating an inefficient process would amplify the inefficiency.”
This logic can be used to end-to-end visibility technology as well.
As a result, end-to-end visibility is one that is credible, effective, and covers you from start to finish. Only a mix of sensor-driven signals, analytics, and smart intervention can do this.
Why is end-to-end visibility so important?
If you can reach this level of visibility, here’s how you can use it to improve your business processes and reduce response time, even for minor disruptions that create havoc on efficiencies, customer happiness, and supply-chain predictability.
1. Dynamic On-Route Logistics Planning and Monitoring
Planning doesn’t have to be done a week or a month in advance. If you have exact visibility of demand signals at each of your receiving nodes and an ETA on your inventory in transit, you can plan and re-plan dynamically also.
Land shipments usually take 1-10 days to arrive at their destination. Air shipping is often seen as speedy, however when the first and last miles are factored in, it can take anywhere from 3 to 15 days.
When a disruption occurs, many shipments are thousands of kilometres away from their destination.
Many Global 500 firms utilise sensors to generate a single visibility thread throughout a multi-touch chain of custody to make real-time, data-driven choices on replenishment deployments, storage, and nodal re-distributions.
Based on the type of cargo shipped, which airports/ports are open, and where the choke points are, visibility and data analytics drive decisions on which routes to employ to plan the least path of resistance.
2. In-Transit Cold Chain Monitoring and Excursion Management
Temperature-sensitive products (Chocolates and vaccinations, for example), that face two issues:
- Whether the item is still in good condition when a disruption occurs in transportation, at a port, airport, or warehouse.
- Whether the containers have adequate power or fuel to keep the items cool till things get back to normal.
Companies in the healthcare and consumer products industries are employing first-hand visibility from IoT sensors and advice from control towers to either wait, re-route, or backhaul items, saving money and upholding brand quality promises.
3. Keeping High-Value Inventory Safe While in Transit
Imagine 15 of them stacked in a container, with hundreds of these containers sitting for weeks by the side of a motorway or rest area due to a disturbance, either on their way to a port or on their way to their final destination.
It only takes one significant incident to raise insurance premiums for the entire year.
As a result, luxury automotive firms are utilising real-time data and analytics on the safety of their trucks and commodities by listening to risk signals that could affect the safety of their goods. Sensors created specifically for container doors provide additional insight about when and where a container door is opened or closed in real time.
When this is combined with current position awareness, chain of custody information, route history, and previous risk trends, a reliable safety alarm can be sounded to deploy field personnel to avoid risk, similar to how your phone GPS tells you when you’ll arrive at work.
Check if Your Supply Chain Visibility Solution is End to End
The ultimate objective is to thrive despite uncertainty!
There are numerous “tracking” systems available, but as said above, merely knowing where your shipment or asset is situated isn’t enough, especially now that so much more data is available. Look for the following features when choosing a supply chain visibility solution:
- Reliability of the data
- Ease of access to visibility
- Maturity of events portrayed
- Ease of automating incident management & planning
If there’s one thing the pandemic has taught us, it’s to be prepared for the unexpected. The more you know about every step of your supply chain in several dimensions, the more likely you are to weather any occurrences successfully.