How to manage your end-to-end supply chain.
Information may be the cornerstone of a successfully integrated business, but it's what you do with that information that sets your business apart. This article will show you how to use technology to manage your supply chain. It will offer tips and tricks to converge and collaborate existing shipping and logistics technology.
"There's going to be a tsunami of data that's going to be available and the challenge is going to be how we actually analyze all this and do something with it." That's an observation by Jim Rice, director of the Integrated Supply Chain Management Program at MIT, who addressed this topic (during a recent podcast) with Dana Gardner, principal analyst at Interarbor Solutions. Jim believes tools and processes are emerging to enable a fully integrated, completely synchronized supply chain. "We are just on the cusp of lots of great potential."
Indeed, today's supply chain management technology can localize global commerce on your desktop. But that's just the first step. Next is the need to ensure systems are integrated so you can monitor your complete supply chain -- from incoming materials from your suppliers, to outgoing products destined to customers, and every nook and cranny of your warehouses, stockrooms and fulfillment departments in between.
While there's no "magic bullet" to fully integrate all of your technology, we are getting closer to what Jim calls the "Nirvana of the synchronized supply chain." Let's take a closer look at all the pieces you can put in place now.
It Starts With Logistics
Whether you manage this yourself, outsource some or a portion, you need to take careful stock of your company's specific logistics needs to execute your business strategy successfully. Consider:
Intermodal flexibility -- It doesn't matter how the shipments get there -- as long as it's quick, predictable and affordable. Different product lines within a company demand different modes of transport, depending on weight, value, product type, seasonality, or vulnerability to obsolescence. A range of transportation modes offers the best balance of speed and cost.
Global assets and reach -- Access to an extensive global network (transportation networks, warehouses, customs brokerage, forward stocking locations and information systems) will enable you to source and sell worldwide.
Supply-chain visibility -- You need access to information on supplier compliance, purchase order specifications, delivery commitments, transportation scheduling and consolidation, warehouse management and order fulfillment. Advanced visibility tools not only aid compliance with increasingly stringent security measures from customs agencies, but they also enable you to accelerate the flow of funds associated with the sale of goods. Collaboration is king here. Make sure your system is equipped to capture and manage all of this information and the platform easily integrates into your existing automated systems.
High-end consumer electronics manufacturer, TrueWave understands the value of supply-chain visibility. As a maker and distributor of the Wadia line of CD players and high-end stereo equipment, TrueWave has worked with a number of freight carriers and shipping companies. They found that freight forwarders could navigate customs for international freight shipments, but didn't offer visibility into the process, making tracking difficult. In partnering with a shipping company like UPS, TrueWave not only gained the ability to ship across borders seamlessly, they also maintained visibility throughout the process.
Disruption planning -- The best-laid plans can easily be derailed by factors outside of your control -- like road congestion, bad weather, mechanical breakdowns, political upheavals, or driver shortages. Advanced transit visibility systems let you easily reroute shipments and give you the extra capacity to accommodate fluctuations.
On the front end, TrueWave discovered that web-based tools allows them to them monitor incoming components from suppliers so they can plan for and manage that part of the process at the dock. Additionally, TrueWave can use the application to watch for potential delays in outgoing shipments and set appropriate expectations with customers.
Once you have your overall logistics in place, its time to look at how you are touching your customers and how your customers interact with your system.
By examining the touch points of the fulfillment process, you can better identify how each impacts the customer and ways to streamline processes.
Workforce effectiveness -- If employees spend more time re-keying delivery information into a shipping system than actually sending products out the door, it may be time to integrate. Exporting customer order data to a shipping program can ease the strain and reduce manual labor. This frees up your employees to answer phones and reconnect with customers instead of preparing shipments.
But wait, there's more -- In today's virtual world of industrial procurement, consistent follow-up communication is critical to building a relationship and improving customer loyalty. Proactive tracking notices not only keep your customers informed, they also free up your staff to focus more attention on new product lines and other marketing efforts instead of answering order tracking inquiries.
John Schaffer, president of TrueWave, sees communication as the secret to customer success. "Visibility into all aspects of the supply chain has changed the way we've operated our business. Our customers are very satisfied with how we are able to offer them a clear expectation of what they'll get and when they'll get it."
Little things count -- Fully understanding your products and the cost of shipping them has a direct impact on your bottom line. If your product falls into a larger-load category, or does not conveniently fit into a box, shipping charges can go beyond the cost of the actual product. If you do not know the dimensions of your final package, the shipping charges can show up on your bill after the customer has already received his or her order, leaving you responsible for the additional charges. For high-end products, consider what options are available to provide customers with the same quality service from beginning to end. You may want to ship via air instead of ground, or require a signature upon receipt.
Keep them returning -- Just as there are ways to integrate your shipping and tracking information, there are numerous ways to integrate the returns process, from the most sophisticated processes to services that let you simply e-mail your customer a return label.
Once a customer receives the product, there are often even more opportunities to interact. Several key market pressures are driving companies to focus more attention on post-sales service as service contracts and product warranties extend the customer relationship.
Consider whether you need to extend your own supply chain to include services after the sale, such as asset recovery and recycling management for obsolete and excess inventory of high-technology products and components, field-tech support, parts planning, returns and repairs management, and service parts logistics.
How much or how little you outsource is up to you, but you can't afford to overlook the importance of integrating your supply chain management processes for comprehensive end-to-end visibility.
In the end, the key to success is integrating technology to collect and leverage supply chain information by putting it to work for your business and for your customer.
As Jim Rice summed it up, "Getting additional visibility into the system gives the company a lot of power. It gives them the power to decide whether to increase the amount of service they are going to provide. They can provide products and materials on a shorter cycle time and possibly take cost out of the system, because there is much less uncertainty."
Mark Samoline is vice president, Global Solutions - Industrial, Government/Defense, Healthcare Sectors, UPS Supply Chain Solutions. He leads a team of industry logisticians to develop and implement configurable supply chain solutions that leverage UPS's transportation and distribution expertise and capabilities.