By Rodney Weidemann | 4 November | Published on ITWeb
A hunter who cannot find the prey in his scope is doomed to failure, just as a traveller who cannot see his destination over the horizon may end up taking the wrong path. So it is with the supply chain as well, where line of sight remains the biggest challenge – from the manufacturer to the wholesaler, distributor, reseller and even to the end-consumer.
Without clear visibility, explains Andrew Dawson, Commercial Director at MACmobile, there is a lack of control, which in turn results in a number of issues, from stock losses to pricing inflation, not to mention uncertain availability and increased time to market. A lack of visibility also makes forecasting and trend reporting extremely difficult, since this cannot be done properly without obtaining a complete view of the supply chain.
“The ultimate goal for maximum efficiency and visibility is an integrated value chain, where all systems communicate seamlessly. This will deliver end-to-end insight and, ultimately, will make the use of predictive analytics on the supply chain a reality,” he says.
“Something that significantly impacts on an organisation’s ability to deliver this level of efficiency and visibility is the challenge of paper-based processes. Remember that when paper orders, delivery notes and invoices are generated, those generating them don’t have any real knowledge of the stock levels available. This means that what is ordered and what is actually delivered may differ, leading to amendments having to be made to the invoice on delivery.”
In the case of the latter, adds Dawson, once credit notes must be passed or new invoices generated, it creates additional time lines and complexities. This, in turn, may lead to inaccurate billing, loss of stock or income, or other financial effects. On the other hand, he adds, a live view of stock levels and the ability to generate an accurate invoice on delivery helps to mitigate these challenges, minimise delays and improve the accuracy of orders, billing and payments received.
“The inefficiency of paper-based processes makes it difficult for those in the supply chain to manage what is actually being ordered and paid for. With no visibility into what orders have been placed and actually delivered, it is impossible to collect the correct payment on orders, often leading to significant loss.”
“In addition, FMCG goods are easily stolen and readily convertible to cash. Without visibility into orders placed and delivered it is impossible to know if stock is being stolen. All of these issues are difficult to identify and quantify without live or real-time information and insight,” he says.
The other major challenge created by a lack of visibility into stock levels, notes Dawson, is that it leads to governance challenges, since there is no transparency in the process. Stock in, stock out, payments collected, and invoices issued are all aspects of governance that are critical to manage properly, if your business is to be profitable. This, he states, requires integrated systems and line of sight across the entire supply chain from start to finish.
“Yet another challenge for parties in the supply chain is the inability to influence consumer behaviour. To ensure maximum success and profitability, it is necessary to engage retailers and consumers using loyalty, rewards programmes and incentives. This requires an end-to-end ecosystem to link the manufacturer to the consumer and the consumer back to the manufacturer. This last mile is essential to fully deliver a transparent supply chain,” continues Dawson.
The question, then, is how organisations should best seek to mitigate these challenges. According to Dawson, it requires an integrated, mobility and cloud-based system to deliver the required visibility.
“An ecosystem that delivers a direct ordering platform between the distributor and the manufacturer, with real-time stock levels and online ordering capability, can dramatically increase efficiency at the first stage. Distributors can better manage their stock levels, warehousing and personnel, and stock can be tracked at any point, no matter where in its journey it currently is.
“Furthermore, distributors will be empowered to generate clean invoices on delivery and present accurate orders to retailers, because they have visibility into manufacturers. Retailers, meanwhile, have visibility and only need to pay for what they ordered and actually received. The need for credit notes to be passed is thus all but eliminated.”
Debtors and creditors, he suggests, can also be incorporated into the ecosystem for enhanced financial management. In addition, the loop can be closed to include loyalty programmes and activations, thereby delivering full line of sight.
“Properly armed with this data, manufacturers, distributors and retailers will be able to make use of intelligent dashboards to interpret data against key performance indicators and, based on this, deliver real-time actionable insight. Structured reports can be pulled at any time, and automatic alerts can be configured if any exceptions occur.
“Essentially, clear visibility and true line-of-sight are the necessary components to enable real-time business management. Moreover, digital transformation of the supply chain will help to enable companies to utilise comprehensive data for predictive analytics, leading to even more agile and effective decision-making across the board,” he concludes.