Supply Chain Comment

By Marriam Kinny, Director, Industry Marketing, RedPrairie

December 1, 2011

Discrete Manufacturers Forced to take Supply Chain Visibility from Wish List to Reality in 2012

The Five Building Blocks of Supply Chain Visibility and Execution

These days, the term “supply chain visibility” has gained as much popularity as industry phrases “mission critical” or “real time demand”. And while executives ranging from logistics managers to CFO’s are recognizing the need for supply chain visibility, achieving that goal continues to elude them. Actionable plans – and implementable solutions – remain the Holy Grail for organizations looking to achieve a network-wide vantage.

For many organizations, warehouse management systems (WMS) have provided strong inventory visibility within the warehouse, but insight beyond the four walls remains at the crux – and conundrum – of a comprehensive supply chain pulse. 

So the question remains, what economic realities have turned supply chain visibility from a term everybody is talking about, to a competitive advantage manufacturers must act on now?  And more importantly, what are the building blocks discrete manufacturers can rely on when moving supply chain visibility from wish-list to reality in 2012?

Kinny Says: It is imperative that discrete manufacturers have visibility across their supply ecosystems to ensure their suppliers are putting them in the best possible go-to-market position in terms of inventory and cost. What Do You Say? Click Here to Send Us Your Comments Click Here to See Reader Feedback

The Time is Now

The responsibility placed on discrete manufacturers to balance service levels again cost is nothing new. It’s the age old juggling act of arriving at the perfect formula to maximize company profit and deliver optimal value to customers. But today, unprecedented pressures – on both sides of the equation – are making it harder for discrete manufacturers to satisfy the demands of both internal stakeholders and customers.

On one hand, global commerce is being driven by the consumer which means instant-gratification, intense price competition, faster product delivery demands and increased product personalization are forcing discrete manufacturers to be more agile than ever – or get left in the dust.

On the flipside, as discrete manufacturers look to increase market responsiveness they are moving fixed costs to variable structures by outsourcing production and distribution to contract manufacturers and 3PLs. And always a risk with outsourcing, especially with off-shore contract manufacturers, adding distance and supplier complexity to a supply chain usually results in reduced agility and control. 

So discrete manufacturers have found themselves in a catch-22 – they have leveraged outsourcing to aid financial and product agility, but the decision to outsource has hampered supply chain agility. It is this paradox that has forced discrete manufacturers to seek global supply chain visibility sooner rather than later. 

The Five Building Blocks of Supply Chain Visibility and Execution

Most discrete manufacturers, including high tech and automotive, no longer make their own products. Rather, they assemble the many components and sub-assemblies  into finished goods to distribute to their customers, often through third party channels. This modern day discrete manufacturer is not just competing head-to-head with their top competitors. Essentially, it is the manufacturers’ respective multi-enterprise supply networks competing with one another. Therefore, it is imperative that discrete manufacturers have visibility across their supply ecosystems to ensure their suppliers are putting them in the best possible go-to-market position in terms of inventory and cost.

This is achieved through the five building blocks of global supply chain visibility and execution:

1. Connectivity between trading partners across complex, multi-tiered supply networks enabled by trading network technology that can accept input from many disparate sources, translate it into a common format, and integrate it into supply chain execution systems for immediate action.
2. Data repository that resides in a supply chain execution system that is secure and accessible by the trading partners and provides visibility to all network partners.
3. Alerts and Event Management provided by a rules-based monitoring and workflow software to sort data (or lack of data) and offer detection alerts when out-of-parameter conditions occur.
4. Visibility and Analysis through meaningful dashboards that display collected data in a smart and timely manner offering configurable analytics; security by partner and user; and user-definable, roles-based displays.
5. Execution-enabled supply chain visibility systems differentiate themselves from standalone or ERP-based visibility solutions by their integration with supply chain execution systems. It’s not enough to see something is happening, discrete manufacturers need to be able to take immediate action.

For additional information on how RedPrairie is helping to keep commerce in motion for discrete manufacturers by enabling global supply chain visibility, please contact 1-877-733-7724 or download RedPrairie’s White Paper on this topic.