Improving the Supply Chain: Visibility

This is a series on Supply Chain Basics looking at the discipline from the Society of Operations Management perspective. Supply chain is also essential to project management as PMs are typically trained in world class contracting. For example, my Masters program had several courses involving contracting and the Defense Acquisition Workforce Improvement Act, DAWIA, certification highlights the combination of project management and supply chain. In this post, we will explore visibility issues adding some additional support as well.

Visibility

"Facts are your friend" is a saying in quality movements. APICS thinking is that there is a need for massive volumes of data to effectively manage supply chains, select processes for improvement, to map processes correctly, and to gauge progress towards goals and initiatives. Without information, customer values cannot be assessed, if efforts are on target, and accurate decisions cannot be made. The bottom line is that information gives visibility and is essential to managing the supply chain.  Analysis of the information is the ability to discern from the information knowledge. Hence, visibility and analysis are closely related. 

Figuratively visibility is the ability to see what is going on. Traditional organizational designs put up walls or silos limiting vertical and horizontal visibility. Vertical visibility tends to be one direction, downward, and based on the individuals station in the hierarchy.  Transparency is the ability to see what is going on up and down as well as across the process. The greater the visibility the greater the chances are that the supply chain partners can synchronize operations to produce customer value. For example, for visibility in the postal services such as the USPS, FEDEX, UPS, and DHS the customer can log into a web application and see their packages tracking history. Most postal services provide near real-time for a variety of reasons do not offer real time visibility. 

Supply demand information along the supply chain is another means of improving visibility. Traditional 'push' systems rely on schedules to move inventory creating potentials for shortages and surpluses as well as feeds the bull whip effect. A 'pull' system requires visibility throughout the supply chain and can reduce inventory to a customer driven supply chain based on immediate demand which requires upstream visibility of customer demand. A networked supply chain can become instantly and simultaneously visible to everyone in the network so that every partner in the chain can respond to emergent conditions.

Willingness to share is an obstacle in the supply chain. Implementing process improvement requires trust building across the supply chain. When building trust early and small successes are necessary using volunteers who act as advocates before implementing broad sweeping improvements. Once these successes are observed by the chain at-large then willingness to share information becomes easier to overcome.

Another problem in the supply chain is competitiveness. Some supply chain members may be doing business with direct competitors and revealing too much can be detrimental to business. Likewise, some supply chain members may be competitive with others in the supply chain and due to size or economics which may dominate control limiting  credibility and visibility of information. This was a problem in the Heathrow Airport project which I discussed in Project Complexity Perplexes Procurements. The solution was to remove supply chain control to the the project manager in order to facilitate innovation and information sharing. 

Of course, information used to measure performance should be applied to KPIs and the continuous improvement efforts. Thus, visibility is one key to successful improvement initiatives. 

Reference:

(2011). APICS Certified Supply Chain Professional Learning System. (2011 ed.). Version 2.2.