“You need visibility and a good understanding of what is
happening with demand and where in the pipeline you can
make different decisions.”
In the past, he says, making adjustments has been slowed
by the essentially sequential nature of communications: the
retailer contacted the distributor, who then contacted
the DC and on upstream to the contract man-
ufacturer and its suppliers. Allowing
all parties to see shifts in demand as
they occur can allow faster adjustments
to inventory plans, Sheehan says.
Sheehan, whose company provides
third-party supply chain design and execution services globally, says that visibility is crucial to adjusting to “shocks to the system,” such as the
events in Japan or Thailand.
“When tier-two or -three suppliers are affected, you have
to be able to react quickly,” he says. “The company that first
realizes there is a disruption will be the one able to secure
[manufacturing or transportation] capacity.”
VISIBILITY AND CONTROL technologyreview
VISIBILITY IMPROVES YIELD
That same principle applies to transportation. The ability to
see and manage freight in transit enables local managers to
do a more effective job of allocating labor and other
resources at DCs or stores, notes Kefer of GT Nexus. And it
allows quick shifts based on demand.
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