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I Can See for Miles & Miles

While many of you may remember the title of this blog as a great 1967 song from The Who, I think it is actually a very apt description of what leading-edge companies are achieving from increased supply chain visibility and risk management.

The beginning lyrics actually sum up quite well what many companies are trying to achieve with their supply chain risk mitigation programs: “I know you've deceived me, now here's a surprise… I know that you have 'cause there's magic in my eyes…”

Many companies have learned some hard lessons from some of the recent natural disasters that have hit the electronics equipment supply chain. What companies have begun to understand is that it is no longer enough to understand your direct suppliers risks, but you have to have a much better understanding of their suppliers' risks in order to mitigate their weakest supply chain link. This will allow you to better monitor your most critical supplier's ability to deliver under normal circumstances.

But what if something extraordinary occurs, like the disasters mentioned above? Despite your best efforts to understand and mitigate all possible risks, events can still occur outside of your supplier's control. When this happens, it is very much like a group of campers being chased by a bear — you don't have to outrun the bear, just the slowest camper!

The faster you and your suppliers can respond to events, the more likely you will have a competitive advantage in recovering from that event. Companies that are most able to assess and respond to supply chain perturbations quickly not only minimize their risk, but can turn this into competitive advantage in what can quickly become a constrained market. The biggest differentiator is having access to information on which rapid decisions can be made.

There are several elements to a supply chain's reaction time. The three most critical are the speed with which the event is detected, what the consequences of the event are to your supply chain, and then executing faster than the rest of your competitors. This requires a shift from a planning focus to one based on execution.

Having a collaborative supply chain ecosystem is required to be successful. This requires investing in visibility strategies to ensure products are being delivered using real-time information, not day or week-old information. Supply chain network collaboration is the differentiator to this approach.

Clearly, manually mining this mass of facts and figures is an impossible task, and current database tools do not have the capacity to manage and analyze the growing volume of data that is communicated and captured every day. But, there is a new breed of cloud-based tools and services designed to facilitate many-to-many multi-enterprise communications. This allows members of an extended supply chain, including raw materials providers, sub-component suppliers, contract manufacturers, and logistics providers to efficiently aggregate and manage critical supply and demand data.

It is this technology that drives the {complink 577|Avnet Inc.} Control Tower service. The Control Tower gives customers “predictive visibility,” in which the systems can use pre-defined business metrics to forecast potential problems and generate alarms for upcoming events. Control Tower customers then receive push notifications alerting them to a change in conditions that might impact their supply chain, such as a shortage in supply, expansion in lead time, concerns over cost relative to currency conversion or natural disaster affecting raw materials availability.

Access to this critical supply chain intelligence enables OEMs to proactively shift or reprioritize their supply chains based on changing supply or demand signals within multiple tiers of the supply chain — both upstream and downstream. In this way, Control Tower moves beyond being just a visibility tool, and becomes a dynamic decision making tool.

The ability to refine data into greater business insights through sophisticated what-if analysis is swiftly becoming the next frontier for electronics supply chain innovation and productivity. Those that “know sooner” cannot only act faster, but with greater assurance that their efforts are in alignment with the operational and financial goals of their organizations.

Given the constant increase in complexity within the supply chain, with its accompanying sea of data transactions, I have no doubt that harnessing the power of “big-data” will increasingly become the defining characteristic of highly successful supply chains.

And as The Who said at the end of the song “You thought that I would need a crystal ball to see right through the haze,” Avnet's Control Tower capabilities can help you do just that.

For more information on Avnet Control Tower, click here to listen to a Webinar on the subject presented recently by Avnet's Douglas Kent and Rick Becks of E2open. The Webinar, which took place on October 16, is entitled “Enabling Supply Chain Corrections Through Control Tower Capability.”

4 comments on “I Can See for Miles & Miles

  1. Barbara Jorgensen
    October 17, 2012

    Gerry–I find it interesting that these “what if” capabilities are moving closer to the end customer. Let me clarify that: at one point, companies would hire consultants to run risk management scenarios–many still do. Companies themselves can do it, but only if they compile and trust the data they get from their supply chain partners. Then there are the parallel supply chains — logistics, 3PL, financial … the list goes on. If customers can pick and choose what data they need and at what point they need it, I can see the advantages. I get exhausted just thinking about the possible combinations.

  2. prabhakar_deosthali
    October 18, 2012

    All these tools are fine. They look to have concealed all the complexity of analytics but just to tune them to get the data required itself sometimes becomes a task unto itself.

    It is better to have such kind of services available on the cloud rather than buying such products in-house

  3. bolaji ojo
    October 18, 2012

    There's also one additional aspect alluded to in Gerry Fay's blog. How about when you can see for “miles and miles” but only so far? How about the known unknowns, the things we can prepare for and the ones we can't because we may not even know they can occur?

    I believe the industry is getting it that the baseline is what Gerry described here. But it also must move beyond this to attempt each time to see more, farther and deeper than it did the day before. As you noted, the race to prepare for those possibilities would then follow to the extent that the industry can prepare itself.

  4. Anna Young
    October 21, 2012

    For workers just as for businesses, the ability to see further ahead is competitively in one's interest. But is it enough? If you can see deeper into your company's supply chain and can't figure out the value of the information or apply it to create a competitive edge then the information is irrelevant. That's why companies need people who can help them translate information into action.

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