Why supply chain visibility remains an elusive goal

Details: 23. September 2013; | Geschrieben von Rob van Ipenburg

First of all I'm a big fan of Adelante SCM's Adrian Gonzalez, whom I consider an authority on supply chain visibility and integration. In his recent webcast on this topic he explains very well how this is not about software, but Process, People and Connectivity. This is exactly our experience in Quyntess and why we have bolted supply chain visibility software with embedded Business Process Management (BPM) capability to a B2B integration hub.

Reasons for elusive goal:

Hard to integrate all parties and systems
Master data structures not comparable between companies
Connecting remote users / technologies in some geographies
Constant reconfiguration of supply chains
Ownership of visibility and data quality

Recommendations:

Map your supply chain (multi-tier), risk assessment
Link data quality to investment and compensation, like pay carrier early if he has delivered all shipment related data in time and complete and monetize data quality
Be willing to make the investments outsource it to Supply Chain Operating Network or 3PL

Now for discussion: On the last recommendation Adrian advocates the use of Supply Chain Operating Networks or Logistics Service Providers to provide that capability, claiming they cover reasons 1 and 5 and to some extent 4 if they have a big connected network. May this be inspired by exposure to the Adelante SCM's client base in this area?

Is it a good idea to rely on your 3PL to get supply chain visibility and connectivity?

Adrian explains how 3PL's more and more offer "Control Tower" capability and can be a great source for supply chain visibility. We find customers (large OEM's and CPG companies for example) actually moving away from transportation centric control towers and inherent dedicated links to carriers. Why is that?

Asset owning or coordinating LSP's create a lock in and switching barrier, because the customer is dependent on this visibility
LSP's don't have the required supplier intimacy to manage the Procure to Pay process and have mainly focus on the despatch process where they start to come in
LSP's have to meet SLA's an KPI's themselves and the "Single Version of the Truth" is sometimes biased to their version of the truth
Cost of visibility look low at first glance but are absorbed in operating cost

So what suits your business? Personally I see Supply Chain Operating Networks (SCON) as Adrian calls them as the more viable option. Interesting enough, we also see some 3PL's recognize this and ask themselves if this is really their core business while they are confronted also with these arguments from their customers. Setting up a partnership with a SCON can actually increase trust level and avoid proprietary investments by 3PL's. Less software to be sold, but more service and more value.