The need for speed is changing how supply chains are managed. Increasing rate of flow results in better customer experiences, a stronger bottom line and more shareholder satisfaction. Getting there requires supply chain leaders to focus on actions that drive velocity through the system. Eliminating decision-making barriers that limit performance minimizes friction. Leveraging cloud computing to link processes brings transparency to the supply chain. And locating manufacturing close to customers reduces time to market.
While the concept of the supply chain has been around for more than 40 years, the ability to incorporate real-time data is new. Organizations that quickly learn to harness the power of today’s data possibilities will thrive. A real-time supply chain characterized by visibility and improved velocity will optimize business outcomes – and help companies achieve competitive edge.
3 truths driving supply chain visibility and velocity
1. Real time is in, control towers are out
Massive data warehouses (or control towers) are believed to contain information from multiple logistics systems and production facilities impede visibility and velocity.
Compare a supply chain relying on instant access to current information to one that’s batch- or report-based: One provides real-time visibility that enables rapid, accurate response. The other uses data from last week, several days ago or even yesterday, so it’s less reliable. To make informed decisions based on insight pulled from data, we need the data to be as fresh and current as possible. In this way visible real-time information leads to increased supply chain speed.
Dated data isn’t the only problem with control towers. They’re also only accessible by a limited number of people. Critical decisions require signoffs that slow things down. And integration with relied-upon partners isn’t part of the process.
2. Transparency requires business process convergence
The ability to present diverse sources of information into a single view creates the speed that accelerates the supply chain. The cloud links separate automated processes. It centralizes knowledge by connecting planning, procurement, manufacturing, warehousing and fulfillment information across multiple companies within the global supply chain. This is called “business process convergence,” and is a key success factor. Cloud computing’s power, scale and low cost make sharing information needed to create relationships along the supply chain a reality.
Real-time data that’s visible and accessible through the cloud becomes the focal point for problem-solving. This, in turn, makes for better customer experiences and stronger competitive advantage.
3. Manufacturing facilities close to customers is smart strategy
Market proximity increasingly makes sense. A regionalized approach speeds the process of getting products to market, saves money on shipping (raw material in and finished product out). It also mitigates the impact of tariffs on goods from around the world. Worldwide labor parity – where unemployment rates decline while wages increase – is driving the return of manufacturing to where the buyers are.
This change is precipitated by material shortages and supply chain bottlenecks, which, according to the U.S. Census Bureau, were the highest in a decade in the second quarter of this year. Supply chain optimization has historically involved turning knobs on a supply chain design that’s broken. Changing this way of thinking are the insights revealed in their work, which boil down to a simple equation: Adding visibility to your supply chain increases velocity. And velocity is the most important element of supply chain success.
Flex Pulse® connects all parties, factories and suppliers to a centralized nerve center providing consolidated, real-time data – accessible on any device in regions around the world – and delivers insights that make a difference.