How does supply chain visibility improve planning?

How does supply chain visibility improve planning?

Natalia Figas
January 06, 2021  | 5 min read

The daily work of planners is a real challenge. Various planning phases require different information - often difficult to obtain or verify. IoT, RFID and other supply chain visibility solutions can improve planning. The question is, how?

According to the European Journal of Logistics supply chain visibility is defined as the extent to which actors within a supply chain have accesses to or share information which they consider as key or useful to their operations and which they consider will be of mutual benefit. It also implies a clear view of the upstream and downstream inventories, demand and supply conditions, and production and purchasing schedules.

The definition continuous: For supply chain visibility to be effective, data must be readily available, timely, accurate and in a format that communicates necessary information.

Already in the definition lies the answer to the title question "how does supply chain visibility improve planning". By increasing visibility, you get the right information to optimise logistics operations. Among these operations there is planning, of course.

Appropriate technologies and comprehensive supply chain visibility solutions will increase efficiency in several areas:

  • planning and forecasting (due dates, requirements, inventory and resources),
  • optimisation - consolidation of loads and containers/trucks fillings,
  • control and analysis of historical data - with the use of alerts and exceptions,
  • and the flow of information between successive links in the chain.

Before defining these technologies, let's take a look at the difficulties that may appear while planning.

Multiple data sources

In their daily duties, planners have to obtain data from the one end of the supply chain (suppliers), its centre (warehouses, forwarders) and the other end (market). The task is not easy as this information is often:

  • incomplete or fragmentary,
  • delayed in relation to current needs,
  • inaccurate,
  • or unverified.

On the quality and speed of data, acquisition depend on distribution centres, inventory levels, new product introductions and transitions, marketing and more elements, of course.

Additional difficulty: the planning phases

It is worth to mention that planning goes through different stages. For example, production planning has three phases2, and this means that different information needs to be included in a plan. Take a look.

  1. Pre-initial planning and strategy planning

    During the first phase, strategists in cooperation with planners define goals, guiding ideas and Key Performance Indicators (KPIs). Moreover, short analyses are performed, production capacities are determined, as well as a problem-solving approach and, finally, a project plan.

    Information needed: mostly from the organisation.

  2. Initial planning, structural planning, concept planning

    In the second phase, databases are planned, and requirements created for several structures (production, material flows, information flows). The target concept is also determined, and the cost-to-benefit analysis is performed.

    Information needed: from warehouse, business partners, transportation managers.

  3. Implementation, detailed planning

    The third phase is the implementation of IT systems and planning of works execution.

    Information needed: systems and devices capabilities.

Changes affect the plan. If production capacities increase, you need to add warehouse spacing or add some modes of transportation to the supply chain. Also, delivery time to end customers or marketing information may change. This is why having clear and validated information from end-to-end is so crucial to your supply chain.

Simple supply chain visibility solutions such as cargo tracking, and inventory levels monitoring will help improve planning. Before we discuss specific technologies, it is worth looking at the benefits of supply chain visibility.

The most important benefits of supply chain visibility for planning processes

How will planning benefit from implementing supply chain visibility solutions? There are several benefits. From reducing delivery delays, and reducing costs, to maximising performance and efficient processes. Here is how the SCV impacts planning.

Obtaining quality information

IoT trackers or RFID and Bluetooth tags allow you to monitor information about the elements’ utilisation, shipment location, or the conditions in which the cargo is transported. As a result, planners have access to accurate information from multiple sources to maximise the company performance.

Real-time data

If you want to feel the difference in the quality of planning almost immediately, introduce IoT trackers into your logistics processes. Thanks to them, you will get real-time data about the location of the shipment, speed, direction of movement or the conditions in which the goods are transported. With those solutions, you can reduce production downtimes or delivery delays.

Fast data verification

Automation of processes, such as scanning goods upon receipt at the warehouse, eliminates the basic human errors in counting. And because the idea of supply chain visibility is to extend visibility to the entire supply chain, solutions in this field are provided by two-way communication between the company and business partners.

Logistics services vendors evaluation

Visibility in your supply chain gives you clear information about common delays etc. You gain the opportunity to monitor SLAs and evaluate vendors services. As a result, you save money on inefficient cooperation.

Big Data powering for further analysis

Data acquired from e.g., cargo tracking devices will create the opportunity to analyse and optimise transportation routes. Another step after the basic analysis is predictive analysis, which we described in chapter V (Supply chain visibility technologies) of our tech compendium to supply chain visibility.

Gain planning possibilities with technologies

Specific technologies allow you to successfully track the location, identify people and property or conditions of transported cargo. We picked and described few technologies that might be helpful while planning.

In tables below you will find information about RFID, BLE, UWB, IoT, NFC, barcodes and QR codes and biometric identification systems.

Take a look!

 

RFID

This technology helps to identify objects automatically via tags attached to them. With RFID you easily check how many products do you have.

RFID (Radio-frequency identification)
Advantages Availability, range, low cost of tags, low cost of devices, automatic identification of objects passing the gates
Disadvantages Low location accuracy
Commercialisation degree Very high
Application areas
  • Identification 
  • Location 
  • Flow 
  • Measurement of goods, assets, shipments

 

Bluetooth

BLE (Bluetooth Low Energy)
Advantages Automatic identification of objects within the range of the sensor, the ability to provide smartphone and tablet users with additional services, availability and degree of commercialisation
Disadvantages The system has batteries that need to be replaced from time to time
Commercialisation degree High
Application areas
  • Location tracking of unit load devices (ULDs), assets and shipments
  • Conditions monitoring of unit load devices (ULDs) and assets

 

UWB

UWB (Ultra WideBand)
Advantages Location accuracy
Disadvantages Low availability, short range
Commercialisation degree Small
Application areas
  • Identification
  • Location
  • Remote measurement

 

IoT

IoT
Advantages Accuracy of measurements
Disadvantages Battery life, different prices of IoT devices
Commercialisation degree High
Application areas
  • Tracking and tracing of assets, shipments and fleet
  • Tracking and tracing location, condition monitoring

 

NFC

NFC
Advantages Protocols built into most smartphones
Disadvantages Low range
Commercialisation degree Very high
Application areas
  • In shipments
    • to monitor cargo conditions
    • to ensure safety (alert is sent to the smartphone with every theft attempt, tampering and counterfeiting)
  • Logistics networks
    • to verify information like batch numbers, production and expiry dates, product authentication, opening detection
  • In warehouses
    • to automate inventory management
  • In retail shops
    • to automate inventory management

 

Barcodes and QR codes

Barcodes and QR codes
Advantages Low cost
Disadvantages A code reader at a distance that allows the code to be scanned is essential. It is necessary to manually scan each code. Small amount of information that can be saved
Commercialisation degree Very high
Application areas
  • Production management
  • Sales information system
  • Inventory management
  • Repository management
  • Single piece management of goods
  • Sorting management

 

Biometric systems

Biometric systems
Advantages Availability, low error probability
Disadvantages Possible cases of incorrect identification
Commercialisation degree High
Application areas
  • Granting access

 

Summary

The answer to how supply chain visibility improves planning is simple. The implementation of technology, even partially, helps to acquire and use high-quality information in real-time.

Thanks to constant access to data, planners can estimate times and quantities, and optimise delivery routes, inventory levels and costs. Supply chain visibility has a positive influence on many aspects of planning.

Supply chain visibility adds a lot to the business growth possibilities. It lays the foundations for agile management, for instance. But there is more and you can read about them in this article.

 

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