Freezing temperatures. Record snows. Planes grounded. Factories shuttered. Traffic snarls. Truck movement halted. Shelves are empty. It is a bad winter, and shipments are five to ten days late. Most manufacturers are helpless. They do not know the status of shipments.
On the east coast of the United States, the cadence of the normal supply chain is not business as usual. The rhythm has changed –purchases have changed and trucks are not making their delivery appointments–but the average manufacturer or distributor cannot see. They are blind.
Today, supply chain outsourcing is a reality. Companies are dependent on each other. They flows are more intertwined than ever before.
In a recent study, 90% of manufacturing companies report having some level of outsourcing. Thirty percent outsource 40% or more of their manufacturing. Logistics levels of outsourcing are higher than manufacturing. Fifty-five percent outsource at least 40% of their logistics on a volume basis. So when, the snow falls and traffic snarls, and the cadence of the supply chain shifts, the manufacturer cannot see.
As shown in the future, transportation visibility is a major gap, and the gap between what companies have and what they want is high.
While companies can track small packages through bar code scanning and visibility systems of the overnight shipping companies, the majority of goods sold are moving through trucks, rail cars and boats that cannot be easily tracked.
In these larger shipments, the manufacturing company loses visibility of the shipment when the doors of the vehicle closes. On-time shipments are then dependent on phone, fax and email. In the words of one supply chain leader that we talked to last week, “ It is much like running our supply chains on chewing gum, Band-Aids and bailing wire.” So, what should a company do?
Taking these five steps will help companies to see; and then adapt to the rhythm as the supply chain changes.
Note: Original article published on Forbes
About the Author
Lora Cecere is the Founder and CEO of Supply Chain Insights, the research firm that’s paving new directions in building thought-leading supply chain research. She is also the author of the enterprise software blog Supply Chain Shaman. The blog focuses on the use of enterprise applications to drive supply chain excellence. Her book, Bricks Matter, was published in December of 2012.
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