Supply Chain Visibility:  Goods in Motion

Supply Chain visibility for Goods in Motion has long been a pain point for logistics professionals.  

Those of us who can remember the iconic 1984 Wendy’s “Where’s the beef?” commercial know that the commercial was really about the fact that there was a break in the supply chain, hence the missing beef.  

Though the problem didn’t start with the famous 1984 Wendy’s commercial (for those of us who were around for it, and those of us that might have caught this nostalgic commercial on YouTube) it has long outlived it.  (For those of you that want to get nostalgic, you can watch the video here:  Where’s the Beef? )

What is Goods in Motion?

First, let’s define the problem statement.  What is logistics?  I’ll pull the definition straight from the Council of Supply Chain Management Professionals (CSCMP) who know a thing or two about this topic:  “Logistics is all about the movement and storage of goods from the point or origin to the point of consumption for the purpose of conforming to customer requirements.  This definition includes inbound, outbound, internal and external movements.”

Why is Goods in Motion Visibility critical–especially today?

COVID-19 changed the game.  And changed it rapidly.  Big Box retailers, and for that matter most retailers, were left with too much inventory in their brick-and-mortar stores and short-changed in their eCommerce distribution and warehouse networks.  

So, by analyzing information across the supply chain, there are typically several blind spots.  An example?  How about international shipping:  Knowing the customs clearance or dock appointments may give you a better view of your supply chain, and even better, tie in purchase order to warehouse receipt.  The issues?  These processes jump across several technology stacks.

With a complete lack of end-to-end visibility across applications like sales and operational planning, transportation management and asset management, these same retailers were left with massive blind-spots across their supply chain for all goods in motion.

This problem was magnified when the online e-commerce growth curve turned into a hockey stick growth curve virtually overnight.  (See below.)  Many retailers didn’t have 5-year plans that showed this much e-commerce growth, much less this type of growth spurt in 3 months.

Why is this curve so alarming?  Based upon a recent SCM World Study, 77% of companies still considered in the early stages of OmniChannel e-commerce processed less than 50% of their transactions digitally.  What does that mean?  It means that the other 50% (or more) are still using traditional 1990’s methods to exchange information (e.g. email, fax, phone, etc.) instead of digitally connecting with their trading partners.

Once you have connected digitally with your trading partners, connecting this data will provide you with:

• Faster Invoice time
• More responsiveness to unforeseen events
• Faster inventory turns

The digital transformation of your Goods in Motion, starts with having accurate, connected data.  To do this, supply chain professionals need to look at connecting the systems in place now, and connecting the data to ensure visibility through the entire end-to-end lifecycle.  This is a daunting task which would require a LOT of development time to put into place.  Time that has already been lost with the hockey stick graph above.

A great example of connecting different systems to receive data in one place while ensuring visibility (besides what we at Chain.io provide, of course), is highlighted in a great blog post by Chain.io’s CEO, Brian Glick.  You can read it here:  Aligning Digital & Business Strategies  (Yes, I am a big fan of TripIt as well!)

Chain.io is the TripIt for the supply chain.  Plain and simple.  Let’s continue……

Some Quick Lessons Learned from COVID-19

Several game changers have jumped out at me since the hockey stick curve started it’s spike with COVID-19.

The first is that the days of page load times, and page speed and other web performance metrics, have really been relegated to second string.  I mention it here:  Why I joined Chain.io  (I lived this part of the ecommerce world since the advent of the web as a sales channel in 1999–The Victoria’s Secret Super Bowl Ad comes to mind as a watershed event.)

What I’ve realized, and what every ecommerce professional has realized is, if you don’t have the product, you don’t make the sale.  (Something that supply chain professionals have been close to, and have understood, for years, but is fairly new for ecommerce professionals, particularly on the technology side.)

Supply chain visibility has been a topic since the advent of web commerce.  However, the visibility components that have jumped to the top really centered on 2 main areas:  (1)  Goods in motion, as we are discussing in this blog, and (2) Better visibility into where inventory was positioned across a company’s network.

Why is (2) an issue?  COVID-19 exposed it.  I’ll argue that (2) folds into (1) for one particular reason:  If a product is sitting on the shelves in a physical store, and that physical store is closed, that product cannot turn into revenue.  And if the distribution center/warehouse is in an out of stock state and you have no visibility into Goods in Motion, most likely you’ve lost a sale.

Since I’ve been at Chain.io, I’ve seen this with several retailers we are working with across the board.  They have customers that want to make a purchase, but  they have no way to pivot quickly enough to move that inventory from a store and into an online customer’s hands.  (Oh, and to make matters worse, some of these same retailers have filed for bankruptcy protection during this same COVID-19 time period.)

Let’s look at some examples in a few verticals.

Here’s a great example from the apparel industry:  Marielle Segarra, Marketplace Reporter

And here’s a great podcast from SupplyChain Management Review (www.scmr.com) on pivoting around COVID-19 from Greg Toornman, AGCO, and having the Goods in Motion visibility to pivot, from AGCO, which is ahead of the curve on supply chain visibility:  AGCO, COVID-19 Pivot.

So is there a simple way to get there?  Do you have to rip out all of your tech stack and invest in shiny new technology?  No.  This is a process problem.  Start there.

Takeaway

Connecting your trading network will produce the greatest benefits for your supply chain both for visibility and efficiency. Here’s what to do now.

It’s simple.  Tear down the silos.  Connect what you have.  Connect your trading partners.  You have the data.  Connect with your carriers.  You have the data.  Connect your freight forwarders.   You have the data.  

We see retailers, carriers and freight forwarders with 100+ trading partners.  It’s virtually impossible to pivot and develop all those interfaces in-house in time to react to the hockey stick. 

Not to worry, though.  Chain.io has been implementing many of these connections already.

Would you like to hear some case studies and best practices?  We’ll schedule a virtual discussion.

I’ll even buy the coffee.  Virtually, of course.