Supply Chain Blind Spots You Might Be Missing
Every player in the supply chain game is experiencing new levels of connectivity. Brands are more global and further-reaching than ever before. We're seeing more suppliers connected to more downstream partners in a way that we couldn't have imagined even a decade ago. Third-Party Logistics Providers (3PLs) are taking on a larger role in warehousing and fulfillment. Even distributors are breaking the traditional mold through the expansion of B2B eCommerce.
But as much as this global connectivity benefits companies across the supply chain, we're also seeing some potential negative effects. Working with more trading partners also means managing more channels through which you need to send, receive, and track information. And since this change is happening so quickly with interconnected chains that are becoming more complex over time, it's creating appropriately-named "blind spots" in the supply chain.
Let's take a look at how to better understand where these blind spots might be occurring and how we can anticipate or rectify them accordingly.
1. The Problem of Data
Don’t believe anybody that tells you there’s no such thing as too much data. As data experts ourselves, trust us when we say the phrase “data overwhelm” exists for a reason. Too much data is about as useful as no data at all if it isn’t leveraged properly.
When sellers are left with more data than they can reasonably manage, they’re stuck trying to find a needle in a veritable data haystack. That’s not to mention if some of that data is either inaccurate or otherwise missing, it could result in a skewed analysis. Additionally, slow processes could mean your data is out of date.
According to one survey, some of the primary issues with the effective application of digital technology in procurement are:
● Quality of data
● Lack of internal IT resources/ support
● Poor integration across applications
● Availability of data
● Difficulty with existing/ aging applications (e.g. ERP)
Now, if data is meant to be leveraged to improve operations and make better business decisions, then what is bad data or too much data potentially costing you? And how many opportunities might you be missing out on, especially year over year?
Gartner’s recent research indicates that organizations believe that poor data quality is responsible for an average of $15 million per year in losses.
2. Trading Partner Activities
Remember that a supply chain is called a chain for a reason. Actions taken by retailers, suppliers, manufacturers, and everybody in between lead to ripples throughout that chain. Outside forces can impact any part of your supply chain, a fact that was highlighted by the COVID-19 pandemic which caused widespread shortages and disruptions that are still ongoing.
If we’ve learned anything in the past two years of dealing with the pandemic and its effect on the supply chain, it’s that companies who fail to be adaptive and agile will suffer. Things like relying on a single supplier or failing to prepare for inevitable delays will set companies up for failure.
3. Inventory Problems
Lack of insight into inventory isn’t just a problem for retailers. No matter a company’s place in the supply chain, accurate inventory data is everything. With so many retailers online, customers like to know what’s in stock. Understandably, they don’t want to place an order for an in-stock bed frame they expect to arrive next Tuesday only to find out it’s suddenly on backorder for the next two months.
Having the right inventory in the right place is also crucial for manufacturers who need to source materials and plan production accordingly. For eCommerce and direct-to-consumer (DtC) customers, having accurate inventory data means being able to share real-time availability with customers to avoid frustration. And inventory on the supplier side and retailer side, not to mention inventory in-transit, should always be a major priority for distributors.
When companies are blind to inventory numbers and movements, they can’t make informed decisions on how much to produce, store, or sell. The result is either empty shelves and long lead times or, on the other hand, unsold excess.
4. Demand Changes and Outside Influences
Blind spots aren't limited to activities among suppliers, retailers, and manufacturers. You can look at every factor along the supply chain but still miss external factors, such as buyer behavior.
Demand for certain products increases and decreases, which may be the result of a number of factors. Sometimes this is the result of retailers running sales or events but this only scratches the surface. Other contributing factors might include what season it is, as some items are purchased more in the fall and winter versus the summer and spring. Sometimes, items start trending and consumers come in swarms to buy them up. Maybe it’s because the brand ran an effective social media campaign or maybe it’s because some celebrity briefly used or mentioned a product in that Netflix series everybody’s talking about.
If you can’t see changes in buying trends in real-time, your business is stuck making an educated guess at best, and consulting Magic Eight Balls at worst.
If you are diversifying your supply chain and working with different suppliers, carriers, and distributors, are you also taking the time to keep track of the data surrounding spending with each one?
This kind of data could be useful for figuring out which suppliers are performing well (or underperforming) and how that performance is affecting your bottom line. Without such information, you might be spending more than you need to without any idea you’re doing it.
And since we're on the topic of spending, businesses spend time on manual processes but this time is rarely accounted for, at least not in the way it could be.
Without automated processes, this unaccounted-for time translates into an expense. The many companies that are not closely tracking this are potentially costing them, whether it's headcount or mistakes, or something else. This lack of quantifiable information creates yet one more blind spot.
How to Effectively Eliminate Blind Spots the Right Way
Thankfully, the solutions to the above problems are remarkably straightforward. After all, if your issue is a blind spot, the obvious answer is to increase visibility.
1. Take Control of Your Data
Integrated EDI software is designed to ensure you have the most up-to-date, complete, and accurate data across your entire supply chain. It helps you sort through the data that matters while ensuring that data is of the highest possible quality and is the optimal solution for standardized, immediate, and even automated document and data sharing. Better supply chain visibility creates better opportunity and, with the right platform, residual problems such as the ones mentioned in the above study (including integration with existing software or managed IT support).
2. Collaborate with Suppliers
Supplier enablement offers unparalleled insight into your supplier’s activity, enabling you to collaborate and keep track of things like supplier performance. How does this shield you from supply chain disruptions?
- By automating order data exchanges, you can send orders and get responses rapidly
- Offering a simple platform makes it easier to diversify your supplier base, so you aren’t beholden to a single supplier
- Supplier performance scorecards and metrics let you discern top performers from suppliers that aren’t keeping up with your needs
3. Keep an Eye on Inventory
Inventory tracking is a massive component of keeping operations running smoothly and reducing customer frustration. With so many steps between a product’s manufacturing and its arrival at the customer’s door (or in their hand), it’s crucial to make sure you’re keeping a close eye on inventory, or else you risk things falling through any one of the many potential cracks.
The truth is that if you don’t know about issues in inventory, there’s no way to fix them. Unfortunately, manual inventory tracking only goes so far, isn’t as reliable, and requires labor-intensive work from your team. Access to immediately actionable, real-time information through automated inventory tracking helps businesses make better decisions faster. And with unified commerce as opposed to siloed solutions, you can reap the maximum benefits of your integrated systems working together to manage stock efficiently and fulfill orders even more quickly at lower cost.
4. Stay Ahead of Market Changes
But what about visibility into buyer behavior? Although it should be said once again that behavior is, by definition, unpredictable, there are ways we can learn, especially by way of using multiple solutions to obtain useful data. VMI or “vendor managed inventory” gives manufacturers visibility into product movements and customer needs.
VMI is a win-win model that allows supply chain partners to automatically share inventory data in real-time. This creates a lean, demand-driven market where suppliers, vendors, and distributors alike can pivot rapidly to respond to changes in inventory and, as previously discussed, buyer behavior. And this, in turn, allows partners more accurate, data-driven forecasting, optimized shipping, and useful features such as setting objectives for inventory turnover, shelf presence, and fill rates, and then seeing how they compare with the actual data.
5. Save on Spending
Solving the problem of spending without knowing how much or why it’s being spent naturally starts with, you guessed it, visibility. Your EDI solution, for example, would allow you to cut down on time-consuming and cost-intensive manual labor with automated, streamlined processes. Keeping close tabs on your suppliers through supplier enablement also allows you to gain insight into how much you’re spending with each one, and how well they’re performing based on the key performance indicators of your choice.
Blind Spot-Proof Your Business with TrueCommerce
Blind spots don’t have to remain blind spots with the right solutions. With so many options at your fingertips, it’s easier than you’d think to increase visibility and make the best and most profitable decisions possible.
This can’t be done until you have the necessary insight, whether that’s into trading partner activities, inventory, or buyer behavior. If you’re interested in improving profits and making better, data-driven decisions, we can help. Contact our experts at TrueCommerce to learn more about how your business can take advantage of our full suite of solutions, from supplier enablement to EDI and VMI.
About the Author: Ryan Tierney is the VP, Product Management focused on Integrations at TrueCommerce. He has spent the last 17 years with TrueCommerce in various roles with services and Product Management. He and his team are responsible for the TrueCommerce TC.Net platform, Business System and Channel Integrations as well as Trading Partner Mapping. Ryan enjoys spending time with his wife and 3 sons and in his spare time enjoys golfing.