(Original post from February 2018 updated in August 2020)

 
With several major supply chain disruptions in world events over the last two decades – COVID–19, Brexit, the Great Recession, geo-political unrest and several major climate events – it is not a question of “if” another event is going to happen but rather “when” and “how frequently.”  According to the Business Continuity Institute (BCI), 3 out of 4 supply chains have been adversely affected by COVID-19 and “this was, in part, caused by the fact that less than half of businesses had plans in place that sufficiently covered them for the supply chain issues that arose during the first few months of the coronavirus.” 

The current economic climate is putting stress on supply chains from all angles. Some companies are experiencing difficulty in obtaining materials needed to create products, while others are seeing a decreased demand in products causing an increase in inventory that companies are unable to shift. Both of these scenarios are clouding visibility for many supply chains and undoubtedly affecting the bottom line. 

Visibility has always been a central goal of successful supply chain management (SCM) because of the effects it has in improving customer satisfaction and lowering costs. Despite this objective, many organizations struggle to attain the visibility they desire. According to a 2019 report from the Business Continuity Institute (BCI),  two-thirds of companies lack full visibility into their supply chains. Other key findings from the BCI’s Supply Chain Resilience Report 2019 included: 

• Just over half of the respondents 51.9% reported at least one supply chain disruption. 
• More than 48.9% percent of these incidents occurred at the tier 1 level. 
• Despite their severity, many such disruptions go unanalyzed, meaning they can easily happen again in the same ways. 

The main drivers of disruptive supply chain events are diverse. In the past, they’ve included problems with business credit as well as ethical violations. More recently, unplanned IT and telecommunications outages have taken center stage. Those two were cited as causes in 44% of the responses to BCI’s survey of supply chain disruptions. 

What do these specific issues look like when they emerge and threaten efficient supply chain management? Some of the most common manifestations include: 

1. Using fragmented system to perform operational tasks 

When information is spread out across different applications and tools, operational delays become inevitable. For example, a team might end up checking several carrier systems for updates while sharing error-laden spreadsheets via email. 

Reconciling all of this data saps valuable time. It also complicates tasks such as procurement and supply planning, producing considerable inefficiencies that drive up costs for workflows such as freight invoicing. 

Ideally, such islands of information can be consolidated without having to resort to onerous manual processes. Integrated supply chain solutions implemented by a trusted partner such as Inspirage will put you on the track to a more cost-effective, scalable and transparent supply chain management solution. 

2. Ineffective third-party logistics provider partnerships 

Choosing to outsource to a third-party logistics provider is often inevitable because of changing technology, government regulations and the cost for transporting goods. It is unavoidable in some industries, not to mention a practical necessity among large organizations with national or even global footprints. At the same time, ineffective third-party partnerships can become a major drag on overall supply chain visibility, with cascading effects across the whole enterprise.  

Relying on outside help for logistics visibility creates issues similar to those we raised in the first item above, namely time-consuming and expensive fragmentation. However, fear of losing control over service and quality, increased costs and integrating operating systems are also concerns for many companies. 

In contrast, as one of our customers – a logistics provider for a large home furnishings and accessories company – found out, having carrier data points commonly available in a single platform such as Oracle Transportation Management greatly simplifies transportation management. The results often speak for themselves. A more streamlined supply chain is both economical and easy to manage, thanks to features such as centralized data repositories. Learn more about how Mondelēz, an Inspirage client, leveraged OTM Cloud in conjunction with the company’s SAP ERP to improve business outcomes and to simplify and streamline its processes and integrations.

 

3. Operating with dated and inefficient technology 

Have you ever researched a product on a retailer’s website, checked to verify that it’s available at a specific location, visited that store and discovered instead that the item is out of stock? There are many reasons for such discrepancies, but a lack of an up-to-date data should be near the top of the list. 

While consumers regularly engage with organizations across multiple devices and platforms, companies do not always possess the right tools to keep pace. Accordingly, they might have to lean on decades-old ERP systems and complex customizations, which together contribute to difficulties in meeting product demand, allocating costs for parts and ensuring that publicly viewable indicators of store stock (e.g., on an e-commerce site or in a mobile app) are accurate. Lacking technology agility increases inefficiencies and decreases the flexibility that companies need to pivot and adjust during times of uncertainty. One of our customers, Cohu, was able to solve these supply chain and operational problems by combing disparate systems stretched out across the organization’s global footprint into a single, cloud-based solution that offered more elasticity and scalability.  

4. Expending working capital on essential services

As a result of these issues and many others, organizations end up with a supply chain burdened by costs and incapable of adapting to evolving requirements. Couple this with the current economic instability as a result of COVID–19 which have led to further increases in the cost of fuel and energy, materials and labor. Overpaying for freight invoices is a prime example of a pitfall opened up by inefficient supply chain management: much of the cost of paying for these items can be eliminated with the right pairing of processes and tools.  

With the increased speed of advanced technology innovations, customer demands, and economic volatility, visibility is not just a buzz word but a vital component to supply chain success. While companies have instituted sales operations planning/IBP processes, there is no standardized course of action to proactively anticipate and manage supply chain risks and ensure end–to end visibility. The good news is that you have worthwhile options for modernizing your approach to supply chain management.  

Inspirage’s Enterprise Control Tower  – built on Oracle Cloud Analytics and available on the Oracle Cloud Marketplace can manage your risks. This solution  addresses this very specific topic by institutionalizing proactive risk management and leveraging valuable insights from numerous disparate systems and processes that encompass areas such as Product Lifecycle Management (PLM), Finance and Enterprise Performance Management (EPM) and Supply Chain Management (SCM). We cannot predict the next catastrophic event, but with Inspirage’s Enterprise Control Tower we can certainly plan for various scenarios and develop a risk mitigation playbook by gaining enterprise visibility across the entire supply chain.   

Inspirage is an end-to-end Oracle partner with a long track record of ensuring industry-appropriate implementations that finish on time and on budget. Learn more by seeing how our customers are succeeding or visiting our  Resource Center to discover more about how we can help you create a risk resilient supply chain built for the future.