Supply Chain Visibility: How Technology Integration Let’s You See the Black Swans
Things go wrong in supply chains, but some events can have catastrophic consequences. These are commonly known as “Black Swan” events. If you have not previously experienced a Black Swan event, you are behind the learning curve. Chances are good Black Swan events have happened in your company, but your existing systems cannot make them visible. In other words, you could be hemorrhaging money without even realizing it. However, supply chain technology integration can help you learn how to identify them which increases your supply chain visibility.
What Causes Black Swan Events?
These events are the result of a lack of supply chain visibility into supply chain processes. In addition, supply chains that have not adopted extensive, integrated systems are suffering such events in the background. Nearly every major company utilizes advanced technologies to increase profitability and production, reports Matt Gunn of Supply Chain 24/7, but that does not mean these companies are using technologies to the best of their ability.
For example, when asked about the use of data in the supply chain, only 15 percent of supply chain executives report widespread, easy access to company data for decision-making processes. However, when asked the same question and including the words, “analyzed and decision-making,” in the question, 23 percent of respondents confirmed data use.
How to Identify Black Swans Through Integration.
Since the definition of data access varies depending on how detailed the questions are. As a result, it is important for companies behind the curve to learn how to identify Black Swan events through integration.
- Connect and Digitize Everything. All devices and items in your warehouse should be integrated into a larger system. This will help prevent data silos and ensure problems are not developing in the background. The Internet of Things (IoT) is another great way of connecting devices and equipment to an integrated system, explains Jessica Twentyman of Internet of Business.
- Make End-to-End Supply Chain Visibility a Priority. Team members, reports and upper-level managers should focus on end-to-end visibility as the overarching goal.
- Make Data-Based Decisions. Information gained through integration must be analyzed, reviewed and applied when making decisions to prevent problems in the supply chain.
This trio of preventative steps will help your company learn from its existing or upgraded systems. While automation is great, it is not without its problems. As a result, your company must ensure all information gathered and decisions made reflect realistic expectations for your company. When an issue arises, integrated systems can help you pinpoint its precipitating factors and prevent it from becoming a major disruption, explains Barry Hochfelder of Supply Chain Dive.
What Does It All Mean?
Integration is the key to preventing small problems from becoming major disruptions, “Black Swans,” in your company. By connecting disparate systems and pushing toward full-integration, you can mitigate risks and help your business survive future issues.