Flying Blind?

As I drove by my local airport the other day, a blanket of early morning fog obscured the buildings and runways from my view. Although I couldn’t see them, I could clearly hear that airport operations were underway. Jets were taxiing, taking off, and landing despite the low visibility. I am not a pilot, but I tried to imagine what it would be like flying a plane in low-visibility conditions. What a leap of faith it would require to take off and fly at hundreds of miles per hour without being able to see what’s ahead. Of course, modern planes are equipped with radar, GPS, and other sensor technologies that let the pilot perceive what the eyes cannot, even in clear weather.

Pilots and air passengers would not even consider flying in poor conditions without these instruments and sensors. However, in our supply chains, we are used to flying blind and operating with little or no visibility of inventories, shipments, and activities beyond our own warehouses. Sometimes visibility is lacking even within our own facilities. Just imagine how much more effective supply chain management could be with supply chain radar that allows you to see shipments en route, remote warehouse inventory movements in real time, and early warnings when something is drifting away from the expected.

That’s why there is so much interest and enthusiasm about the industrial internet of things (IIoT) and the enhanced supply chain software that is being developed to leverage the universe of inexpensive, connected, smart devices that the IIoT is bringing to plants, warehouses, and transportation networks. With these supply chain sensors, we can keep a close watch on the entire network, reduce uncertainty and variability, and replace inventory with information.

Supply chain management is essentially the planning, controlling, and tracking of goods in motion. What drives the supply chain is availability—having the needed items in the right place at the right time while minimizing costs. This objective also determines the amount of inventory in each warehouse, a significant portion of which is there to accommodate variability and uncertainty. If you can reduce uncertainty, you can reduce inventory without hurting availability and customer service. To achieve this, you must closely track goods in transit and in remote warehouses.

This increased visibility enables more precise management of the entire supply chain. Any deviation from the expected situation—including quantities, status, location, and expected delivery date—is detected at the earliest possible moment, and corrective action is taken immediately, preventing bigger problems from developing and offering the best opportunity to compensate for the deviation.

Too much information?

The whole idea of IIoT visibility is attractive and exciting, but it also might raise concerns about how anyone could possibly deal with all of the big data that thousands of sensors and devices produce. But fear not: Technology created this problem, and technology also gives us the tools to cope with it.

The latest supply chain software can handle more data and includes what the APICS body of knowledge and the Certified Supply Chain Professional curriculum refer to as “supply chain event management capabilities.” According to the APICS Dictionary, 14th edition, supply chain event management applications provide users with “the ability to flag the occurrence of certain supply chain events to trigger some form of alert or action within another supply chain application.”

The other type of technology that is rapidly evolving in the wake of IIoT proliferation is analytics and data visualization. Now that all of this new data is becoming available, we need new ways to analyze and display it to support decision-making. New analytics platforms also can use the comprehensive history of cause-and-effect experience to predict future situations and results, supporting better planning.

Supply chain radar should help us all be better supply chain pilots, especially during times when new challenges emerge. With enhanced visibility and analytics, we will be able to lower costs and optimize resource usage to guide more efficient and effective performance.

 

Reprinted from APICS Magazine / Enterprise Insights September/October 2016