Visibility Rising to the Top
KPMG's 2014 Global Manufacturing Outlook report covers a lot of ground, but a couple of the conclusions it draws from its efforts should hit home for those involved in supply chain activities that are still on the fence about devoting resources to injecting visibility into their supply operations.
Nearly every company involved with moving product between themselves and their customers/suppliers is aware of the deficiencies in visibility. The alarming part of the KPMG report is that only this year is there an increase in the number of companies admitting it. According to the report, 40% of its study respondents admit they lack visibility into their supply chains. My off-the-cuff, unscientific and unsubstantiated estimate is that the actual percentage is closer to 80%. But the reported 40% is a 100% increase from the same report's findings last year.
This mean there are more companies admitting to the need for visibility. On the slightly more positive side, the report indicates a greater than 100% increase over last year's findings in the number of companies that say they have complete visibility. The trend is encouraging but even if this trend continues at the current rate, it will be another decade before 80% of the supply chain is 'completely visible.'
The common element to the success of most of the stories that involve 'complete visibility' is the notion of real time data availability. This makes sense because delays in updates tend to cascade from minutes, to days, then to weeks. And with so many contributors to the supply chain, uneven timing of updates means uncertainty about the true status of products and supplies. When one sub-assembly provider reports its products as shipped, but its raw materials provider's last report indicates its deliveries as not yet shipped, something is wrong even if it is only a delay in the raw materials provider's update.
Given that real time updates are at the base of true visibility it makes sense that such a large percentage of companies have not yet gained high levels of visibility. Getting current data integrated with supply chain processes requires deep integration between supply chain, ERP systems, and every other process that touches the order and delivery process. This requires no small effort - but it's an effort that successful companies will have to embrace and master if they are to remain successful over the long term.