Visibility: you can't manage what you can't see
Written by David Gai (pictured right), Executive Vice President of Services at JDA Software
According to the Business Continuity Institute's 4th Annual Survey on Supply Chain Resilience, 73 percent of organisations experience at least one supply chain disruption a year. Most have an average of five. That's not surprising. After all, variability is the only true constant in the business world. But, when inevitable changes are not effectively planned for, the impacts on revenues, margins and customer service levels can be devastating.
While demand trends, shifting operating conditions and other variables may be a fact of life, you can identify the critical factors that have the ability to significantly affect your supply chain performance and ensure that your business will respond quickly and optimally to any unplanned event. There are three steps to visualising and managing your supply chain risks:
1. Take a Strategic View
Every supply chain has unique strengths and weaknesses. Your company needs to create its own "early warning system" that monitors performance in your most critical areas on a continuous basis. By flagging changes in key performance indicators (KPIs) at the earliest stage, your business can anticipate market shifts and other unforeseen events before they impact financial results. You can also support consistent results by ensuring that your business has the right people, processes and tools in place to enact your top-level strategy no matter how conditions change in the future.
2. Predefine Your Response to Change
Based on a thorough assessment of the unique strengths and weaknesses of your global supply chain, you can create a predefined plan to address every performance exception or emerging market trend. This allows your management team to calmly pull a series of predefined levers, instead of scrambling to identify the best course of action in the heat of the moment. You can ensure that your response is well-considered and strategic.
3. Act Swiftly and Decisively
With a pre-orchestrated, strategic response plan, you can act incredibly fast whenever the unexpected occurs. If your business responds first to a broadly disruptive event, you can actually create a significant competitive advantage. For example, businesses that had alternate sourcing plans in place at the time of the Japanese tsunami in 2011 were able to operate in an uninterrupted fashion, while other companies struggled to rebuild their supply chains and replace their Japanese suppliers.
While there is a proven science of monitoring, anticipating and responding to unforeseen supply chain events, most retailers and manufacturers lack this essential capability today. First of all, it's daunting to build a supply chain management program from the ground up, with no prior experience. Second is the question of accountability: Who in the organisation should be responsible for establishing supply chain visibility and creating strategic response plans?
Given the fact that this is a highly specialised, cross-functional task and internal teams are often stretched to the limit already the most effective approach is to rely on external expertise to add this critical capability to your supply chain team. By partnering with a software and services provider with deep supply chain experience, gained across hundreds of implementations, your organisation can take advantage of the world's best practices across industries to define and enact supply chain plans quickly without the need to assign internal resources or spend precious time "reinventing the wheel."
By relying on proven external expertise, your organisation can ensure that the right people, processes, tools and metrics are in place to meet your company's strategic goals and support consistent supply chain performance even in an environment that is far from consistent.
With an increased level of visibility, a strategic response plan and the right infrastructure in place, your business truly can expect and plan for the unexpected across your global supply chain.
Vizibl: The Future of Supplier Relationship Management (SRM)
Even the best procurement team on the planet can only derive so much value from their suppliers by tinkering with spreadsheets or negotiating another half-percent-per-unit from a regular bulk-buy.
The value of relationships count in today’s fast-paced and disrupted business environment, where partnerships, future efficiencies and risk mitigation are just as vital a measure of an organisation’s maturing procurement organisation as overhead reduction.
A recent McKinsey survey into 100 large organisations found that the more cooperative an organisation, the more financially competitive it could become. "Companies with advanced supplier-collaboration capabilities tend to outperform their peers,” it found, but also admitted that this value is not a simple thing to access.
Visibl is a company built from the ground up with the philosophy of ‘delivering mutual value' in mind. Its digital procurement platform is designed to place collaboration at the centre of supplier relationships. Greater transparency for all stakeholders not only simplifies and quantifies contractual obligations, but also provides opportunities to discover and align on common goals and business objectives.
How does Vizibl’s platform work?
Vizibl’s supplier relationship management platform feeds off data. By leveraging data from existing enterprise applications such as ERP, P2P, risk management, or project management systems, all stakeholders can share a central source of truth. The result is greater transparency, visibility and accountability on both sides of a contract. The platform is divided into several focus areas:
- Vizibl Relationships: This system helps organisations move beyond transactional interactions with their suppliers, instead building trust and applying a governance framework that is both scalable and consistent to better support core business objectives.
- Vizibl Workspace: Operating in one virtual workspace removes friction in collaborative endeavours and aligned initiatives. Vizibl Workspace enables partners to drive goals together, whether improved cost-savings, ESG commitments, new product launches or boosting operational efficiency.
- Vizibl Reporting: Measuring results is critical in achieving business objectives, forward planning and risk management. This system helps business leaders leverage actionable data to quantify and drive initiatives, support and mange supplier performance, and understand true ROI.
Key Vizibl customers: Heineken, Vodafone, Astellas
“Gartner lists supplier collaboration as supply chain leaders’ number one focus to solve for agility and resilience”
Speaking to SupplyChainDigital.com earlier this year in June, Mark Perera, CEO and co-founder of Vizibl said: “We work with companies across multiple industries, but regardless of sector, we really see agility and resilience as overarching topic areas in the supply chain. From a resilience perspective, that’s both in terms of operational resilience, but also strategic resilience; we see organisations looking at implementing the desired levels of flexibility and the ability to change with demand, as they look towards the future of their company.”
“Gartner lists supplier collaboration as supply chain leaders’ number one focus to solve for agility and resilience,” he added. “The mindset and process change to switch to a supplier collaboration model will be a challenge for organisations that are falling behind.”