Logistics executives hope the impact of Covid-19 on global supply chains can provide a spark to accelerate progress towards end-to-end visibility.
Supply chain ‘visibility’ has been a buzzword going back well beyond the outbreak of the pandemic, giving rise to visions of much greater flexibility.
The ability to see goods at the piece level in real time at any point in the chain, and to take corrective action as soon as a sign of an actual or imminent disruption occurs, has become the holy grail in the industry – and has remained almost as elusive.
For all the hype, progress has been slow. Eric LaValle, digital supply chain & customer experience technology portfolio leader at T-Mobile, sees the industry only at the beginning of its journey from printed grid-based reports to real-time dashboards. He was speaking at a webinar on supply chain visibility last week, run by Reuters Events.
The basics for real-time visibility are not in place yet, added Kendra Phillips, CTO, supply chain solutions of logistics provider Ryder System.
“Supply chains are still very paper-based,” she noted. “As an industry, we have to concentrate on digitisation. We have to have electronic bills of lading […] as a norm.”
Structural obstacles have to be removed, she argued: “We can’t have real-time visibility unless we can break down silos of all the different partners in the supply chain with their own systems. We need to enable folks to see the same information in real time.”
The experience with Covid-19 has opened the door to broader adoption of digitisation and acceptance of the need for an approach that transcends silos within enterprises, panelists noted.
“Covid brought all the enterprise functions together,” Mr LaValle said. “If there is a silver lining in this pandemic, it’s probably that Covid has been a catalyst for change.”
While boardrooms have had a wake-up call on the need for enhanced visibility and digitisation, it is equally important that this filters down to the front line.
“People look to the executive level to bring in technology, but people in the front line want to do things as they’ve always done them,” Ms Phillips said. The implementation requires change management teams that oversee the process and measure the adoption, she added.
For early adopters of digitisation, the lack of responsiveness among their suppliers and clients is a source of frustration.
“A lot of information we provide people don’t pay attention to. We make the investment, and it’s not used. It’s frustrating,” said Greg Orr, president of CFI and executive vice-president US truckload of TFI International, a Canadian transport and logistics company.
Some of the reluctance to embrace digitisation is due to a worry about being flooded with a tidal wave of data.
“Information overload is a real risk,” Ms Phillips said. “We need tools to see what’s going wrong and bring that to the forefront.”
Panelists were in agreement that the benefits of improved supply chain visibility were huge. Beyond the ability to take corrective action early if something goes wrong and a better handle to optimise supply chains, this extends to the field of sustainability, which is rising in prominence in companies’ approach.
“I see that as a natural result of digitisation of the supply chain,” said Ms Phillips. “If you have real-time visibility, you should be able to optimise and get it right more often the first time, and one of the outcomes of that is fewer miles driven.
“Our drivers spend 15-18 hours a week in wait time. That’s more than 30,000 hours a week. The more we can have a predictive environment, the more we can drive that down. Visibility is the key,” added Mr Orr.
Mr LaValle said he saw more opportunities for enhanced visibility in the pipeline when 5G is rolled out. He regards it as a game-changer whose potential will be better understood as it unfolds. Looking back to previous technology launches, expectations were along the lines of uploading pictures faster; people did not envisage the emergence of TikTok or YouTube videos, he recalled.
Whatever the outcome, making use of it will hinge on the foundation of digital capabilities, he pointed out. “We need to pursue digitisation now so we can utilise new capabilities,” he stressed.