Accurate forecasting is only possible when you can see what’s happening now. Real-time information reduces the uncertainty that impedes flow of goods, making it easier to optimize your supply chain performance.
Operating in real time is an evolving business imperative that delivers multiple benefits:
- Better decisions can be derived from up-to-the minute information vs. yesterday’s news. To make decisions based on data, the data needs to be as fresh and current as possible.
- Ability to quickly respond to changes in demand, exploit market swings and make your competition wonder what you’re up to.
- Faster, more effective response to disruptions that could derail your supply chain, including materials shortages, natural disasters, trade law changes, geopolitical upheaval and labor disputes.
- Better ways to spot vulnerabilities. Knowing what could happen (even if it’s not always possible to know “when” and “where”) means you can put plans in place to minimize repercussions.
- Less reliance on gut feelings based on past experiences and estimates using standard predictive models that rely on siloed data and old information.
- Right place, right time inventory levels that are consistently balanced to keep service high and costs low.
Forecast accuracy depends on visibility
Forecasting is about using a mathematical expression to capture what happened in the past to anticipate what will happen in the future. There are two time-honored rules involved:
- Forecasts based on aggregate points of view are more accurate than those made in the context of a single source of data.
- Forecasts made later are more accurate than those made with long lead times.
Therefore, decisions will be most accurate when data is available from all sources and when data is available in real time, allowing predictions to be made at the last minute. Full visibility encompasses the concepts of “end-to-end” and “real-time.”
Visibility really is everything when it comes to supply chain success, and transparency is now the law of the land. While forecasting by definition is never a sure thing, access to current data from across the supply chain goes a long way toward minimizing risk associated with predicting the future.
Delivering on the promise of real time
Real-time data from multiple sources is critical to creating the transparency needed to make informed supply chain decisions. Other keys to making real time work for global enterprises are:
- Leverage cloud-based computer algorithms to centralize knowledge.
- Provide anywhere/anytime access to enable visibility and intervention on any device.
- Rid your culture of signoff processes and decision-making gates that slow things down.
- Instill the exception-based management that limits human interaction to issues deviating from the norm.
- A supply chain ecosystem with these characteristics lets you estimate with reasonable certainty, react in an agile way – and optimize supply chain success.
An example of real time at work
Live visibility is embodied in Flex Pulse®, a software-based, comprehensive mobile view into supply chain events across our 120 factories worldwide. Like a tire pressure light that comes on only when something is wrong, the system sends an alert when inventory or another aspect of the supply chain is out of sync. In our Flex Pulse centers, the platform is featured on wall-to-wall screens for Flex and customers to view a mosaic of real-time supply chain activities. It visualizes and interprets live streaming data from all sources. And it provides unprecedented levels of global intelligence.
Flex Pulse centers around the world link the supply chain, integrating demand, inventory monitoring, manufacturing quality, outbound transportation and delivery. Video conferencing encourages collaboration, so issues are addressed in real time. And the supply chain view is accessible on any device, so decision makers can act quickly.
There is more evidence than ever that the old rules of strategic supply chain management are fading away. Access to real-time data is essential; transparency is the new law and collective innovation of enterprises in the global network is the driver for growth.