POST-PANDEMIC PPE

BY JACOB STOLLER

THE TRANSPARENT SUPPLY CHAIN

MANY ORGANIZATIONS ARE SEEKING TO GAIN VISIBILITY OF EVENTS INVOLVING TIER-TWO AND TIER-THREE PARTNERS

One of the many lessons from recent supply chain upheavals is that the delayed arrival of a component costing only pennies can trigger the shutdown of an entire manufacturing line. This heightened vulnerability is causing many companies to extend the visibility in their supply chains to tier-two and tier-three suppliers and customers.

Gaining such visibility, however, is more easily said than done. According to a recent Association for Supply Chain Management (ASCM) – sponsored study titled “The Resilient Supply Chain Benchmark,” most companies are not ready for this new environment.

“In just over half the companies benchmarked, the view of supply chains is based on internal data, or relies on siloed or outdated data sets,” reads the study. “This limits their ability to detect emerging threats or calculate how a disruption will unfold across supply chains and business units.”

Closing this gap will require new data capabilities on the part of many supply-chain partners. “One of the challenges that has really plagued supply chains is that there’s a lot of inconsistency in data collection, or lack thereof,” says Suzanne Livingston, vice-president of development for IBM’s asset and supply chain offerings. “Even when the data is being collected, it’s not necessarily collected in a way that makes it easy to understand how the products, the raw materials, the processes, and the manufacturing steps all connect.”

Consumer demand for sustainable products has raised the bar for transparency even further, with companies increasingly being called upon to share information about raw materials, production processes, and transportation methods with consumers. “Some companies are going so far as to share waste generated through the process of manufacture with the consumer,” says Livingston, “so the consumer has a better view of the sustainability of the product and its overall impact on the environment.”

THE INTEGRATION CHALLENGE

The diversity of data input from dozens or even hundreds of partners forces supply chain operators to contend with one of the thorniest issues in IT – the chore of bringing data from multiple sources into a common end-user platform. The problem is that data stored by different IT systems can vary in structure, protocols, and formats.

“If you’re working with different companies, languages and parts of the world, making the information readily available and being able to rely on it is probably the biggest thing,” says Gavin Davidson, product marketing director at Oracle NetSuite.

To extend supply chain visibility to multiple tiers, a company’s suppliers must acquire that visibility as well – a company needs to have the data in order to share it. Newer technology is helping smaller players acquire that capability.

“The larger players almost always had Electronic Data Interchange (EDI) or other tools for building custom integrations,” says

Davidson. “I think the cloud is starting to make some of these capabilities more readily available to all businesses.”

A growing number of companies are building the IT infrastructure to handle data from diverse sources. “One of the priorities we’re seeing from customers is creating a common data platform, which is something supply chain leaders weren’t really thinking about five or six years ago,” says Sherief Ibrahim, GM, business applications, Microsoft Canada.

An early step for many, Ibrahim explains, is the creation of what is called a data lake – a repository that consolidates and organizes data of many types in a single platform, making it available to tools that transform it so that it’s usable by warehouse management systems, control towers, and other supply chain applications.

When companies share data, however, technology is not the only element that has to be agreed upon. In the grocery business, for example, each vendor might have different SKU numbers for apples. This means that the grocer needs a master data strategy that establishes how all the products are categorized, and how the data flows. This is typically a multi-year project complicated by the fact that decisions about sharing data can’t be made by IT alone – senior executives at the highest levels have to decide what data should be made available, and under what terms.

Sharing new data – for example, by adding more information to a shipping label – can require significant process change at considerable cost. This is much easier to justify if the company sharing the data sees a benefit to that.

“Why would I submit more data and not actually see where it’s going?” says Livingston. “It’s really important that all parties get visibility, not just one or two strong parties in the system.”

In exchange for adding more information to a shipping label, a large distributor could share the final retail destination of that shipment with the supplier. This would give the supplier early feedback on sales that might have otherwise taken one or two months.

“It’s really important that all parties get visibility, not just one or two strong parties in the system.”

ing the equivalent of a consortium,” says Livingston, “where they’re bringing together their suppliers, their collaborators, and in some cases their competitors, and collectively deciding to adopt a particular solution and make the respective process changes needed for all of them to benefit.”

Getting to transparent integrated supply chains, however, is an ongoing task that will never be complete. “You’re never going to get 100 per cent,” says Davidson, “but I think the technology is definitely starting to make it a little bit easier for levelling the playing field for smaller businesses.”

Davidson also believes there are many opportunities to improve supply chains without significant effort. “Everyone thinks their business is different, but it’s really not,” says Davidson. “Sure, every company and every industry have their nuances, and some are more detailed than others. But the reality is that most common business processes are fairly standard.” SP

MOVING FORWARD

The substantial increase in data sharing has spurred a rise in data consortiums such as Farm Connect, where the tasks involving data integration can be shared by multiple companies through an industry association. These bodies also have the resources to enforce compliance with standards and engage third party auditors to support governance practices.

Ad hoc consortiums are also being formed. “We have a lot of companies that are facilitat-