Every manufacturing company faces risks throughout its supply chain, ranging from the mundane (vandalism, shoplifting) to the horrific (terrorist attacks, natural disaster). The key distinction between companies that struggle with risk management and those that have adopted best practices is supply chain visibility -- the ability to monitor the critical elements across a company's logistics network.
"Visibility into critical activities and milestones is a necessary infrastructure element for managing supply chain processes," notes Bob Heaney, senior research analyst, supply chain management with Aberdeen Group. "Best-in-class companies are more likely to have granular visibility into critical supply chain processes and events."
For instance, Heaney notes, best-in-class companies are:
- 1.78 times as likely to be able to analyze their current level of supply chain risk exposure, versus all other companies;
- 1.75 times as likely to have online visibility into supply chain disruptions;
- 1.63 times as likely to have online visibility into accrued supply chain costs (e.g., cost of goods sold, dollar value, freight costs);
- 1.62 times as likely to have online trading partner collaboration and enablement.
Personal computer manufacturer Lenovo Group (IW 1000/238), for instance, uses a cloud-based visibility solution that provides timely, daily information on transportation carrier performance, customs clearance, transit times and alerts on potential schedule misses. The cloud solution replaces a manual process the PC maker had been using, which had been based on spreadsheets, faxes and email. The company's supply chain includes a worldwide distribution network for finished goods, with 25 main carriers serving Lenovo's customers in 160 countries via regional distribution centers.
The visibility system receives event milestone updates from Lenovo's carriers, while supporting logistics constraints and customer requirements, explains Ian Mallison, Lenovo's executive director of global logistics, based in Raleigh, N.C. "It also provides visibility to order status from factory to delivery, leveraging track-and-trace milestones across the globe." Lenovo's supply chain partners and carriers provide updates to the system via electronic data interchange and the Internet.