How to Use Visibility for Renewed Supply Chain Synchronization to Ensure Value Creation

Before the COVID-19 pandemic hit, most global enterprises were engaged in supply chain synchronization — coordinating procurement, manufacturing, and distribution — to create value for customers and company shareholders. But as supply chain disruptions from the fallout of the pandemic have shown, synchronization isn’t possible without having end-to-end, real-time supply chain visibility.

Supply Chain Synchronization Creates Value

Supply chains create value for customers and the company when the flow of information, materials, and products is synchronized to deliver products to end users. Supply chain synchronization requires timely coordination of a series of interrelated activities and inventory handoffs between a group of companies who comprise a supply chain.

Demand-driven supply chains were envisioned as the way to achieve an optimal inventory balance while providing value.

Manufacturers, retailers, and wholesalers improved their financial performance from operating a demand-driven supply chain as they were able to reduce inventory holdings and increase inventory turns. Doing so requires end-to-end supply chain synchronization. But the recent supply chain disruptions stemming from the pandemic demonstrate the need for advanced real-time transportation visibility to ensure continued synchronization.

Pandemic-Induced Supply Chain Breaks and Logjams

Covid-19 was a black swan event for demand-driven supply chains. Demand-planning software could not account for the sudden surges and drastic shifts in consumer spending at a time when the supply of goods was reduced as virus outbreaks affected workers and government lockdowns impacted manufacturing and distribution.

As companies tried to restart production and distribution to meet increased demand, they encountered a host of transportation problems that wrecked supply chain synchronization. US West Coast ports were overwhelmed by the surge in cargo imports, creating a bottleneck resulting in untimely delays in container unloadings. The container port backups had a domino effect on the entire inland transportation system that further disrupted delivery schedules and threw off replenishment schedules. In addition to the inland transportation problems was a tight capacity for trucking services and a shortage of truck drivers. As a result, inventory handoffs could not occur as planned and lead times for supply replenishment became unpredictable.

As the pandemic drags on, for companies to regain their footing with synchronization, they need to have real-time transportation visibility to manage shipping delays and inventory-handoff disruptions. With unreliable transportation schedules, companies can’t afford to be oblivious to the whereabouts of shipments in transit. And they need predictive calculations of the estimated time of arrivals (ETAs) to plan for resupply to coordinate production and distribution schedules. Only by having real-time information about the status of inventory in motion, can companies make the adjustments to maintain synchronization.

Visibility To Manage Synchronization Flow

We at project44 believe that an Advanced Transportation Visibility Platform gives companies the requisite all-encompassing view of global shipments in transit across all geographies and modes of transportation to maintain supply chain synchronization.

Not only does a platform such as project44’s provide end-to-end supply chain visibility, but it also automates workflow processes and offers insights drawn from an analysis of its platform data to guide decision making. That gives supply chain managers the tools to be proactive in taking corrective action to minimize the impact of shipment delays and reset the timing of inventory handoffs to maintain synchronization. By using information as to when inventory handoffs will occur, companies can take steps to readjust schedules for manufacturing and restocking of distribution centers and stores. A visibility platform also enables communication between supply chain partners so they can collaborate on resolving issues being affected transportation delays.

Regain the Rhythm of Synchronization for Value

As supply chain synchronization breaks down, out-of-stocks go up, production falters, and retail sales are lost. And that is exactly what’s happening in many industries now as they can’t maintain the rhythm of synchronization for stock replenishment planning.

Because issues with tight carrier capacity, labor shortages, congested transportation networks, and distressed supply chains aren’t going to disappear overnight, companies need to be prepared to readjust the timing chain of synchronization.

Value creation in the current transportation environment depends on having the ability to readjust supply chain synchronization affected by changing circumstances. Having visibility of the inventory pipeline flow along with predictive insights into anticipated arrival of shipments and orders, companies can make adjustments in procurement, production, and distribution to maintain supply chain synchronization for value creation.