technologyreview
BY PETER BRADLEY, EDITORIAL DIRECTOR
the more you see,
the less you need
Visibility tools that keep an eye on inventory across multiple
locations, including goods in transit, are proving a powerful
weapon in the battle to reduce stocks.
WHEN THE BOTTOM FELL OUT OF THE ECONOMY IN 2008 AND 2009, THOUsands of businesses found themselves stocked up with more goods than they could sell—
which often as not led to a shortage of working capital needed to keep the enterprise running smoothly. That experience left many determined to tighten up their inventory management so they would never get caught like that again.
But keeping tabs on inventory has proved to be a tricky thing to do, given the proliferation of SKUs in many industries as well as increasingly global supply chains and the long
lead times that come with them. Another complication is that at any given moment, those
goods may be spread out among trading partners—suppliers, carriers, and the like—all
over the world.
In many cases, that’s prompted managers to turn to software tools that give them visibility of inventory across multiple facilities, third parties, carriers, and suppliers. That visibility, they’re finding, can provide the information and confidence required to reduce
inventory levels throughout the supply chain.
No more black holes?
Tom Kozenski, a vice president at RedPrairie, a developer of warehouse management and
other software systems, says his company has been focusing on the visibility capabilities
of its products for about a decade in response to requests from customers—particularly
those in the consumer packaged goods and food and beverage industries. The development of what he calls a “glass pipeline” enables customers to see inventory at a level of
detail that extends down to the license plate on a pallet.
In fact, some shippers have become so accustomed to having that kind of visibility that
they’re no longer willing to tolerate the occasional “black hole,” where inventory infor-
mation is temporarily unavailable. “What has happened more recently is that customers
have asked for support to [find ways to look inside] the black holes … in their networks,”
Kozenski reports. That might include, for example, third-party facilities that may not
have systems to provide data automatically. “They have asked us to provide additional
integration services to get information out of a third-party network.”
Not all third-party logistics service providers (3PLs) are informational “black holes,” of
