Over on the software side, a number
of developers are now marketing systems that provide visibility as well as
capabilities to manage what you see.
One such provider is Sterling
Commerce, an IBM company. “We can
give an end-to-end view of what is
going on,” says Pete Wharton, senior
product marketing manager for
Sterling’s selling and fulfillment software suite.
For supply chain managers, that end-to-end visibility is critical, he argues.
“When you can look at global inventory
as opposed to siloed inventory, you can
reduce inventory levels. You don’t replicate safety stocks over every location.”
One Sterling customer, Sargento Foods
Inc., for example, has gained significantly better control over its transportation operations using Sterling’s tools.
(See sidebar.)
Another benefit of global visibility,
he says, is that it allows managers to
deal with inbound disruptions more
efficiently—for instance, by redirecting
shipments or proactively notifying customers of order delays. “One of the
things we saw coming out of the recession is that retailers have jumped on
global visibility and the ability it provides them to direct inventory to a particular location,” he says.
Wharton sees particular benefits for
inbound operations at DCs. “The challenge is you have procurement placing
orders. It’s not unusual that the first
time [a DC manager learns of an
incoming shipment] is when it turns up
at the warehouse. Visibility can provide
significant lead time. You can plug that
into the receiving process for things like
scheduling doors and allocating labor,
and how you stage goods and receive
them into the warehouse.”
HEADS IN THE CLOUDS
Not so very long ago, if a shipper wanted access to visibility software, it had to
buy it. But that’s no longer the case.
More and more of these software tools
are now available on demand. Sterling’s
fulfillment and visibility tools, for
example, are offered both as installed
software and on a software-as-a-service
basis.
That’s a big plus for shippers, says
Greg Kefer, director of corporate marketing for GT Nexus, a company that
offers a cloud-based platform linking
shippers, suppliers, carriers, and other
participants in international supply
chains. The on-demand delivery option
makes visibility tools available faster
and at lower cost than installed systems,
he explains.
Like Sterling’s Wharton, Kefer is quick
to point out the many benefits of
enhanced visibility. For starters, he says,
there’s the potential to reduce trans-
portation spend. As an example, Kefer
points to retailers, which change out
SKUs eight to 10 times a year, or in the
case of fashion retailers, even more
often. “They use a disproportionate
amount of air freight because they can-
not risk putting goods in an ocean box
and waiting three and a half weeks for it
to get here.”
But visibility tools can potentially
change that, he says.
“I’m not saying you can do away with
the air piece, but good visibility across
the supply chain can allow you to treat
containers as warehouses. You can see
down to the pallet, carton, or SKU level,
even to style, size, and color. If you can
put a percentage into ocean containers,
you can take away some of those 747
charters. A lot of these companies are
beginning to move in that direction. If
you can trust data, you can do more of a
mode mix.”
A related benefit, he says, is the ability
to avoid superfluous movements.
Knowing what’s coming in can help
prevent unnecessary reallocations
between DCs, Kefer explains. “If you get
a demand signal in New York and you
don’t have the SKU, you might put in a
call to the West Coast DC. Then, about
the time the truck reaches Nebraska,
four containers come in. Visibility of
that can [save users] tens of thousands
of dollars a day.”
Dollars out, customer satisfaction,
leaner inventory: Those are the goals.
Or, put in other terms, the principle is
to eliminate uncertainty.
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