Next Frontier in Supply Chain Visibility

Last month’s discussion on the “Next Frontier in Supply Chain Visibility” organized by Intugine and Celerity Supply Chain Tribe brought together an eclectic group of individuals. I was fortunate to have found a place in this discussion among seasoned veterans in the supply chain space. We collectively addressed a host of issues pertinent to supply chain management in the country. From building resilience in supply chain operations to improving transparency across it. From addressing challenges associated with the visibility of intermodal transport to discussing shortcomings with parcel tracking. The panel comprehensively addressed the current state of affairs. I’m putting down my thoughts from the discussion here(for anyone who might have missed the event).

What is Supply Chain Visibility?

Supply chain visibility is about knowing where your products are at all points across their journey, from raw materials to manufactured goods, until they reach the end consumer. It’s about improving supply chain management in a three-step process:

1. Transparency – Deploying GPS-enabled vehicles or IoT devices are different ways to enable tracking of vehicles, containers, and parcels moving across the globe. There are also technologies like Beacon to help what is happening inside the yard to track what is happening at the loading and unloading locations. Finally, it involves integrating dozens of ERPs, CRMs, and WMS systems to put all the data on one platform. Such transparency acts on disruptions within minutes and sometimes can even help to act before those disruptions occur with predictive visibility.

2. Intelligence – Once you have the visibility, the next thing is to analyze the data that is gathered from it and measure APIs like on-time percentage, OTIF, daily kilometers, the route-wise performance of different transporters, how different transporters are performing on different routes, is it at par to the industry standards, etc.

3. Actionability – Based on all the data analysis, companies make vital decisions like changing the business share of their carriers and transporters. They can improve their network design with actual data on the ground. They can plan their inventories and safety stocks much better, and in the end, the idea is to bring down the cost and deliver a delightful customer experience.

How to best utilize end-to-end supply chain visibility?

Today when we order anything online, we get real-time visibility and updates of where our parcel is, where the rider is and when it will reach our location. This helps in fulfilling customer expectations and aids in managing deliveries better. Now imagine a similar scenario in a B2B context where organizations and brands are moving millions of dollars of inventory and missing the visibility piece that can help them manage better and deliver a great customer experience.

The idea behind visibility is to take this experience across all supply chain nodes. For instance, a distributor or a retail store can commit to their customers better if they have visibility of when the goods will arrive. Similarly, an auto manufacturer can manage their assembly line and production better if they have visibility of incoming components and are informed on time that a particular component will get missed. This can enable them to arrange an alternate immediately because a minute delay can cause lakhs and crores of losses on the assembly line. This leads to the other area of benefit, i.e. helping customers manage their operations better.

Coming to tangible benefits, interestingly, in India, about 6% of the GDP is stuck in inventory carrying costs. The stock that left the manufacturing facility but didn’t reach the customer carries a cost of ₹6 out of every ₹100 spent in India. With visibility and better control, better monitoring as critical elements, this can be brought down to less than 3%. That’s a breakthrough in improving the efficiency of the supply chain. We have seen first-hand that when organizations enable visibility in the supply chain, within 4 – 6 months, they see 40 to 50 crore of inventory disappearing from their system and supply chains. The second major benefit is the reduced cost of doing business. Then there are a lot of industry-specific benefits in FMCG and FMCD as they see OTIF metric shooting up. In retail, companies see products landing on the shelf at the right time, saving a lot of sales loss. It can drive up the topline by .5 to 1% overall. In alco-beverages, massive detention costs come down as you improve your monitoring with real-time visibility. We believe that visibility is the key component to unlocking all other digitalization capabilities. It can help with revenue recognition, invoice discounting, proof of deliveries, and so much more.

Challenges portrayed by Beacon technology

Beacons are used in smaller areas, like a warehouse or plant, to manage and get visibility of loading and unloading operations, invoice, dispatching, etc. Intugine has been providing this visibility for the past few years with a simple plug and plays technology that ensures a limited number of IoT devices are needed. There are at most 50 to 60 vehicles inside a yard at any time. The moment the vehicle reports at the loading point, one can tick the magnetic beacon on the vehicle, and when it goes out, one can take out that beacon at the security gate.

The batteries are designed to last 2-3 years at a reasonably low cost. The logistics to manage this recharging are separate from the picture. Over time, the power and the size of these IoT devices have been optimized to a great extent to be viable for the market, when compared to a larger portable GPS tracker or smart logs for which you need a comprehensive device management system, needs a continuous recharge and has to ensure the safety of not losing them.

What are the top few things to keep in mind while selecting a visibility platform?

While evaluating a supply chain visibility partner, there need to be some expectations set. That expectation depends on the various modes of transportation that the organization is using and how the operations of the organization are structured. Choosing the right fit depending on the complexity would work. It’s not a one solution fits all kind of space but stepping one step further on it can help companies in their journey to enhance visibility.

Companies use varied tracking solutions for different needs, for distributor deliveries they are tracking D2C or direct-to-retail deliveries, while at the same time they import a lot of raw materials, which makes it evident to track ocean and container movements. If an organization is using multiple modes of transportation, it’s critical to ensure that the partner has a visibility platform that covers those modes – be it full truckload, partial truckload, container, or rail visibility. Only then a platform can be an end-to-end visibility platform.

Another criterion while evaluating a visibility partner is, to understand which TMS, WMS, or ERP systems they are using and whether the partner is already integrated with those or if they are ready to bring those integrations so that these systems do not sit in siloes. In the end, the objective is to bring everything together because all systems should be communicating with each other. The idea is to evaluate the capability of the new partner in the existing environment of systems that the organization is using. Then comes the success of implementation. Just having a platform doesn’t work, the department should be able to work with all the warehouses, plants, and other service providers and drive all those integrations, and training, to make the product successful on the ground.

While evaluating the visibility partner, either by a trial demo, try to evaluate if the partner can deliver at least 95% of visibility. These comprise the important criteria to evaluate a partner.

Future of these technologies and the government’s role

In the recent 2022 Budget session, the government spoke about transit inventory, bringing transparency, and visibility, and how they can benefit. The government is proactively coming up with schemes that will help in bringing transparency with tracking. For example, the county’s toll infrastructure is being digitized, vehicle and driver databases have been made accessible to businesses and even the Indian Railways APIs are being leveraged to bring down logistics costs in the country and bring transparency across the ecosystem.

The Unified Logistics Interface Platform (ULIP), being built by the government, will provide efficient modes. It will greatly reduce logistics costs and save time, assisting just-in-time inventory management and eliminating tedious documentation. With the help of ULIP, organizations like ours will be able to provide real-time information to all stakeholders and improve the efficiency of supply chain operations.

Smaller enterprises generally prefer to work with modular systems where they have the flexibility of choosing 2-3 different things as per requirement, instead of a full-fledged WMS or TMS that can do 10 different things. After implementing the modules, a middleware becomes critical to have to handle 5-6 disjoint systems, so it can talk to these discrete systems and can bring data to one place. Many visibility companies including us are trying to build these larger supply chain control towers, which can talk to all the discrete systems and provide one single view to the customers.