Wednesday, May 29, 2024

The key to proactive supply chains

Visibility throughout the supply chain provides the opportunity for better decision-making, increased customer service and lower operational costs.

Supply chain visibility is a key aspiration for most organisations. Knowing exactly what’s happening, and where, in your supply chain at any given point in time means being able to take a proactive approach to your operations.

In an increasingly data driven economy, responding effectively to supply chain disruptions or deviations from the plan due to unforeseen circumstances is dependent on having good visibility across the entire supply chain, end to end, and this requires good quality and timely data, says GS1 Australia Director Freight, Logistics and Industrial Sectors Bonnie Ryan.

“The alternative, as is often still the case, is ‘fixing on failure’ or reacting to what has already happened,” she said. “Having effective supply chain visibility means being able to proactively manage the supply chain and effectively respond to unplanned events,” she says.

Logistics optimiser Andrew Clark, founder and Managing Director of Logistics Help, says people and businesses want certainty, and if they can’t have it, then they need information on a dynamically changing situation so they can plan for it and make good decisions.

“Supply chains are very dynamic,” he says. “Customer demand and timing constantly change, and supply availability, timing and price constantly change, which then feeds back into demand and affects where the demand goes. This has only been magnified over the last couple of years because of the supply chain disruptions due to the pandemic lockdowns around the world.”

Mr Clark says supply chain visibility is still an emerging technology, and while large manufacturers can impose requirements and technology solutions on their trading partners, smaller suppliers usually must laboriously track their inbound and outbound supply chains manually.

“Many operators in the supply chain aren’t set up to report on their activity to anyone but their direct customers who ask for it on a case-by-case basis,” he said. “If your business is three or four steps down the supply chain, you simply have no idea what’s happening. A truck breaks down somewhere overseas, your stock misses the container load and therefore the ship, and you don’t find out about it until you call up the freight forwarder to ask where your shipment is. It’s a very complex problem with no simple solution.”

He recommends FMCG manufacturers do what they can, initially by keeping customers informed of supply.

“Work with your suppliers and their suppliers to get better information on what’s happening on your material inputs,” he says. “Consider implementing a supply chain control tower system.”

Read more about supply chains in the latest issue of Retail World.

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