Supply Chain Visibility Has Never Been More Important!

Supply Chain Visibility

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In the midst of the Coronavirus pandemic the need for complete, end to end Supply Chain visibility has never been more important!

The necessity for visibility started with store shelves being emptied of toilet paper, food, and various household items. People were panic buying in the face of the unknown implications of the pandemic. More and more countries and jurisdictions were locking down their citizens, temporarily shutting down businesses and enforcing social distancing and self isolation.

The chronic need for Supply Chain visibility has become of utmost importance with the overwhelming strains on global healthcare systems and networks. Hospitals and support organizations have been running low on masks, personal protective equipment and ventilators.

Most alarming is that projections of the heightened demand for these items are not met with broad visibility as to the supply and inventory of these items.

Supply Chain visibility and the Digital Supply Chain has never been more important!

The Technology Exists …

The technology which enables and provides Supply Chain visibility has been available for a long time. Transportation Management Systems (TMS), Blockchain, the Internet of Things (IoT), Cloud Computing, Bar coding and RFID identification, GPS tracking and more are all available in one form or another.

And when you think about it most individuals are already connected. If you have a smartphone, tablet or computer then your whereabouts are known and trackable. How many times have you googled something only to soon find that advertisements instantly appear on your phone? Or if you enter a store you immediately get notices on special deals. And when you order something on line you can electronically track the movement of your items until they arrive at your doorstep.

Full visibility as to your whereabouts exists and is used every day. And that same visibility is available for goods. Transportation Management System (TMS) technology has been around for a long time to track the movement of goods in real time.. There are even companies who make their TMS available for free. Electronic sensors, GPS, and online cameras can track goods as they move through manufacturing facilities and distribution centres and retail channels.

While the level of deployment of these technologies varies by company, and by industry, the technology does exist. Further there are off the shelf solutions so companies no longer need to invent the software and support infrastructure themselves. All of this can be provided as an outsourced service.

So with all of this capability why are we in a situation where our store shelves are empty and hospital supply rooms are bare? Wouldn’t visibility allow us to both dynamically alert sources of supply as well as inform consumers as to availability in real time? True electronic visibility could potentially mitigate the propensity for both panic buying and stock outs.

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… So What Went Wrong?

The absence of full end to end Supply Chain visibility for many products and commodities has been at the root of the apparent supply shortages that we have seen. And this lack of visibility has meant that companies and governments have been slower to respond to sudden demand shifts and alter supply lines accordingly.

As the Coronavirus pandemic has escalated exponentially around the world more and more people have recognized the seriousness and severity of the situation. People flocked to stores and emptied shelves of food products and supplies of every kind. This buying activity should be a part of the demand signalling and Supply Chain visibility that every company is looking at on a daily, if not hourly, basis.

Stores were too late to read this kind of behaviour so people were allowed to buy products, like toilet paper, in unlimited quantities. Because when you think about it the actual daily consumption of toilet paper didn’t suddenly spike up. As store shelves emptied of toilet paper people increasingly panicked and soon many other products started disappearing from store shelves. Again daily consumption didn’t really change, only buying patterns.

Because stores failed to react to these demand incongruities and establish buying limits early, for instance, the normally predictable, and adequate, levels of supply were insufficient to keep shelves stocked. And seeing empty shelves only makes people panic more.

Initially I’m sure stores were happy to see products flying off of their shelves. But Commodity Managers and Category Managers, and their suppliers, have been unable to react quickly enough to restore these supply lines. Better visibility and reaction to demand patterns, inventory levels, and supply alternatives would seriously help to restore normalcy.

Larger retailers certainly have electronic connectivity and are tracking store sales at a sku level in real time. But they don’t always have the electronic tracking of goods at their suppliers or in transit. Even if they do their visibility is more than likely limited to their first tier supplier only. Smaller retailers are less likely to have any sophisticated visibility tools at all. And without a doubt there is no visibility to alternate suppliers that they are not currently doing business with.

The same situation is occurring in Healthcare. The news is dominated by the growing number of confirmed cases of Coronavirus. This has put an indescribable strain on hospitals and other healthcare institutions. Modelling of the spread of the virus has cause governments to lockdown citizens and require social distancing. At the same time this modelling has identified a lack of medical supplies and equipment to handle the expected eruption in cases of the virus.

It is this ad hoc modelling, and its projected ramifications, that has brought the supply shortfalls to light. A forecasted shortage of masks, gowns and other protective materials should have alerted authorities a long time ago that increased output and alternative sources of supply needed to be triggered.

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And a shortage of ventilators, which will be much more complicated to manufacture than masks, should have triggered active establishment of new sources of manufacture some time ago. Even now there seems to have been hesitancy on behalf of the U.S. government to demand the manufacture of more ventilators from alternate sources.

Further visibility as to where inventory of these finished goods are located, where the raw materials required to make these goods are located, and the manufacturing capacity of 1st, 2nd and 3rd tier suppliers is all necessary to ensure the proper allocation and deployment of goods and capacity. A lack of visibility of any of these elements creates an inability to adjust supply to meet demand in real time.

It is not clear to me, for instance, that there exists full, real time, end to end electronic visibility of all levels of the healthcare supply chain. If there was then demand patterns and forecasts should have long ago signalled to suppliers, of all tiers, to ramp up production instantaneously.

Our Healthcare professionals have enough to deal with already without having to worry as to whether there are enough tools and equipment to help protect them and their patients and enable them to do their jobs.

Supply Chain Visibility in Conclusion

It is true that even with electronic Supply Chain visibility there would still be difficulties in ramping up current and alternative sources of supply to deal with the unprecedented demand for goods in all areas of our lives.

However it is certainly true that real time electronic Supply Chain visibility offers the fastest availability of information. This real time information buys us time and with this time we can make quicker decisions to better handle any supply and demand fluctuations.

The technology exists. The foundation of the Digital Supply Chain of the future is built on end to end electronic visibility. While everyone is in reaction mode now it will be necessary in the future to install the tools and capabilities to establish real time electronic end to end Supply Chain visibility.

Automated Supply Chain visibility will dramatically enhance our future ability to react to the next disaster or pandemic. This is a vital Supply Chain lesson from the Coronavirus pandemic. It is a mandatory capability for our most critical Supply Chains.

Originally published on April 7, 2020.
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