- THE MAGAZINE
Every business runs on its repeatable processes. Successful supply chain management depends on coordinating every step. How effectively you manage this feat determines many significant benchmarks for your organization. However, it can be a real challenge to get the clear, comparable and complete view of your entire supply chain you need for continuous improvement.
Complex supply chains have a multitude of stakeholders. Each siloed part of the process has its own perspective, based on its own goals and expertise. Tying all this disparate information together logically can be like converting inches into minutes. Transportation professionals keep track of truckloads or pallets of materials. Manufacturing managers keep track of raw materials and parts. Warehouse managers monitor inventory. Each stakeholder has different units of measurement taken at different points in time.
Forbes contributor and supply chain pioneer Lora Cecere explains, “The original vision of building end-to-end processes from the customer’s customer to the supplier’s supplier becomes more difficult. The true opportunity lies between functions. We need to break down the walls.”
But how can you break down those walls and still keep everything moving?
Find Your Logic
Over the years, my work with clients who have automated and connected processes that drive their organization has given me many examples of how companies can bring all their supply chain steps together so that they’re better coordinated and share a common logic.
No matter what industry you’re in, the steps to building a rationalized and automated supply chain are very much the same. Start with a simple unit of measurement you can use as a basis for rationalizing all your data. It’s often helpful to think in terms of what’s relevant to your end customer — like product weight or volume. Next, coordinate process steps so that they follow a clear sequence tied to this unit of measure in real time. Finally, set up automated processes so that they are as transparent as possible at every stage. That way, you can monitor your progress — and make improvements along the way — regardless of operational silos.
With a common language, fast, accurate process steps executed with automated precision every time, and the ability to continuously improve the entire process, it’s much easier to get the overall data you need for your organization.
Keep it Relevant
A multinational packing and processing company determined that the basic unit of measurement they should follow throughout their supply chain is weight. Many other factors such as the market price, cost of production, transportation and other considerations could easily be made relative to this unit so that everyone in the supply chain was using comparable data.
With raw material prices changing almost hourly, having up-to-the-minute sales and inventory information is critical to matching supply with demand and managing costs. To keep up, the company runs large-scale, complex business intelligence (BI) reports several times a day. These reports detail what the company most recently paid for wholesale products, how much it cost for processing and transportation and, finally, how it should adjust its retail prices accordingly.
The whole process, however, requires many dependent steps to be executed within its IT enterprise — reliably and accurately in real time every day. This requirement demands large-scale process automation.
Using Redwood Cronacle to automate processes across a wide range of applications and activities, they coordinate multiple activities based on their corporate-wide system of measurement to get clear BI data from every piece of their supply chain including the following:
Automation helps the company optimize its product routing between external trucking and its internal delivery fleet. Many of its products are delivered using contract drivers who are paid by the distance they drive. Automated processes and notifications give managers the insight they need to manage weight distribution for deliveries between carriers to maximize cost efficiency.
The company’s supply chain management tools automatically run demand planning and forecasting reports every week as soon as the data is available. Once the forecasts are complete, they’re automatically loaded into IBM Cognos for reporting and analysis. This complex process runs automatically every weekend and every night of the workweek. Prior to automation, this process took 12 hours. The automated process runs in just six hours.
Order Fulfillment and Billing
Working with their order processing tools the system gathers complete orders and automatically loads them into their SAP billing system and their IBM Cognos data warehouse.
A Rational Success
By coordinating all these steps with a single automation platform, the organization maintains BI sales and inventory reports in real time. The BI steps are automatically executed right along with the actual process steps so that the data is always as up-to-date as possible. Nightly runs generate reports on the prior business day’s results. Cronacle controls the entire BI process — from lockdown, extract, data load, unlock, to report refresh and subsequent notification.
With a consistent metric and pervasive, connected automation, this company has cut process times in their supply chain by at least 50 percent.
While all that speed is great, it’s even more important that they now have accurate and comparable data every day. They’ve truly broken down the walls in the supply chain to discover how to improve the core of their business.