Imagine you work at a famous tech company, about to launch your next category-killing gadget. You announce the launch date with great fanfare. You’ve instructed suppliers to prepare for a 10% increase in production. Stores are primed with glossy marketing materials. Journalists, investors, and customers are excited.
Then Coronavirus hits.
The Chinese government scrambles to contain the outbreak. Workers are barred from leaving their homes. Transport routes slow down and close. Your expensive, well-planned product launch date is well and truly in danger.
What do you do?
Surprise Avoidance Strategy.
The above story is real. The company is Apple and the product is the new iPhone. Apple has consistently been ranked as having the most advanced supply chain in the world, using every advanced supply chain technology you could imagine, and even they get supply chain surprises.
Even if you’re not Apple, this type of challenge — a sudden change that disrupts your supply chain — is familiar. Most execs know that Supply Chain Surprises are a fact of life. Some you can avoid but many you can’t.
Unavoidable surprises must be met with focus. You need time and clarity of mind to react well and manage appropriately.
Avoidable surprises must be met with a shift in tactics. You need to consider why you couldn’t avoid the surprise. This also takes time and clarity of mind.Unlike Apple, many of us don’t have the luxury of huge budgets and unlimited technical resources; in fact, Gartner reports that only 4% of Supply Chains operate with de-siloed organizations and with full visibility across the journey.
In my view, there are three main reasons for this. One, the technology that drives this change in logistics has traditionally been expensive and requires an all-or-nothing buy in. Two, many report that technology purchases have not lived up to their promise, which makes others shy to buy in. Finally, people aren’t sure where to start – a new transport management system, or a new ERP? Visibility Software or Inventory Management?
Don’t wait until you’re Apple-sized to start upgrading your supply chain. The best place to start is by addressing avoidable surprises.
How to upgrade your supply chain without breaking the bank:
Is there a pragmatic way to start surprise-proofing your business? Yes. Here’s how.
1. Get rid of useless work.
Many of us have slack in our day if we look for it, and a time-audit is the best way to find it. Think about the tasks that you repeat again and again, and figure out how you can cut them down or eliminate them altogether.
For people who work in ocean freight, for example, the most common way to see the status of a shipment is to go to a steamship line website or a port terminal and do manual searches. This one is a double whammy — it takes hours of time every day that you aren’t spending on more strategic tasks AND it can cause more surprises to occur: small mistakes or oversights can cause demurrage fees to rack up and cause delays.
Using a tool like Terminal 49 will save you hours of manual, error-prone busywork each week, and allow you to focus strictly on the information that you need to know.
2. Invest in a component that can help you see surprises before they become a problem.
Supply Chain Visibility tools provide the vital service of telling you where your cargo is. They are extremely valuable in helping you avoid the kinds of surprises you can plan around.
However, only 6% of companies report that they have full visibility into their supply chain. This number is small because, traditionally, getting visibility into all modes of transport can be costly and require huge IT implementations.
But you don’t always need full visibility all the time. You can grow your visibility into each part of the chain, then connect the dots later.
Thankfully, it’s 2020. There are now a growing number of SCV (supply chain visibility) software tools that provide visibility into aspects of your supply chain without requiring complex integrations.
For example, while you’re searching for the perfect tool for Rail insights, you can track your cargo on the ocean and at port on Terminal 49 with almost no implementation efforts at all. Start small, and grow.
3. Integrate visibility data into the systems you actually use.
Once you have some visibility, start pushing that data where it needs to go.
Many IT systems fail because teams don’t end up using them – perhaps the system lacks crucial info, or it’s too hard to use. So even though you know that emailing a spreadsheet around the office is not best practice, it may work for your team because it has exactly the information and KPIs you care about.
Whatever data you get from your visibility tools – like current status, next action steps, customs holds, ETAs, pickup and dropoff appointments – that data must be able to flow out of the visibility software and into whatever system you actually use, whether it’s a spreadsheet, a TMS, IMS, or any other three lettered acronym you run.
So start from wherever you are. Focus your IT spend on integration. Get the data fed into your workflow. Copy and paste is how mistakes get made!
Terminal 49 offers an easy-to-use platform with exactly the data you need in order to take action on your shipments, but can also send that data directly into your spreadsheets or other tools so that you don’t have to change the workflows that are working for you.
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Visibility goes a long way toward surprise-proofing your supply chain
There’s no software that can predict a virus outbreak (at least, not yet). But you can prepare your operation to react nimbly in the face of such issues, and eliminate the surprises you can predict — like demurrage, customs holds, and other unnecessary fees.
Supply chain visibility is vital for these efforts, giving you accurate data and insights, and it doesn’t have to break the bank or require a massive IT overhaul. You just need a simple strategy that you can start today.
- Surprises are inevitable, even for the most advanced supply chains. But it’s easy to begin addressing them – you can take incremental steps with what you have, today, especially if you focus on increasing supply chain visibility.
- Realize that you can equip yourself to deal with and even avoid surprises
- Find a supply chain visibility tool like Terminal 49 that works with your existing systems and doesn’t require a massive IT overhaul.
- Have data-driven communications with stakeholders, skip the status updates and jump straight to problem solving.
: Gartner: Predicts 2019: Future of Supply Chain Operations: https://www.gartner.com/doc/reprints?id=1-1OG9Z8VQ&ct=190903&st=sb
ABOUT THE AUTHOR:
Akshay is the CEO and co-founder of Terminal 49, Inc. He works with importers and logistics professionals to help automate much of the manual work that goes into managing ocean trade.