DC Velocity - December 2009

identify processes and technologies businesses are using to gain better visibility—and thus control—across their supply chains. As any supply chain adds complexity by adding more tiers and extending across greater geography, the ability to manage it erodes, they argued. “This complexity has resulted in companies’ gradually losing visibility and control over their networkwide supply chain operations and performance metrics,” they wrote.

Viswanathan and Sadlovska, a research analyst in the practice, examined several factors—perfect order deliveries to customers and from suppliers, the cash conversion cycle, and accuracy of total landed cost forecasting—that they believe differentiate supply chain performance among companies.

They concluded that best-in-class companies share several characteristics, most notably their process and technological capabilities, that enable them to look beyond the company’s walls.

The enabling technology has developed rapidly. Today, a number of software-as-a-service (SaaS) offerings exist that can collect data in a wide variety of formats ( everything from EDI to spreadsheets) and translate it into whatever form may be required. That’s in response to demands from companies big and small. In the case of big companies, the need for electronic communication with partners was the driving force, says Becks of E2open. “When we started the company up [in 2000], we worked with large global companies that had their supply chains strung across great distances,” he says. “What they expressed to us then was that they were having a hard time controlling their supply chains because they were losing visibility that used to be within their firewall. They owned the inventory and the factories. When they started working with partners, they went back to the 20th century reliance on e-mail and faxes. They asked us to solve that problem. … The breakthrough was ubiquitous access to the Internet.”

At the other end of the spectrum are smaller companies that often are parts of large supply chains. For these companies, technical issues related to data transmission can be a source of frustration. “A problem they face is playing in the overall supply network with their neighbors,” says Jim Burleigh, CEO of SmartTurn, a provider of Web-hosted warehouse management software targeted to small- and mid-sized companies. “Whatever data you have, someone is trying to aggregate.” The problem is that different players—say, a Wal-Mart and a Target—set different rules for supplying the data. That increases the difficulty of providing visibility to all trading partners. “There are dozens

of standards,” says Burleigh. “That becomes problematic and costly.”

Like Becks, he urges adoption of IT platforms (like his own) that can accept and translate data in a variety of forms. But he sees companies as slow to adopt such tools.

“The average junior high student
uses so much more communication
technology than the average ware-
house entity that it’s laughable,” he says.
Getting connected to offer global visibility
among trading partners is just the beginning,
of course. Although the technology to cap-
ture and monitor supply chain partners’ data
is a crucial first step, leading companies realize
that they must use that information to make
swift decisions, often altering production and
distribution operations in response. As

Viswanathan emphasized in a discussion of

his report, it’s not simply having visibility,

but making the best use of it. “There is a difference between visibility and responsiveness,” he says. “The leading-edge companies focus on responsiveness. They have tackled visibility. Not only do they have visibility, but they are able to take action.”