Supply Chain Visibility: Can You See Me Now?
German firm Merck KGaA, known as EMD Performance Materials Group in the United States, faced a challenge common to many companies. "Our visibility ended when we shipped product out the door," says Andreas Grimm, supply chain program manager with the global specialty chemicals company.
In addition to visibility to products in transit, EMD wanted greater visibility to materials and products within its plants, some of which span more than five square kilometers (3.1 miles). Finally, EMD ships many of its products in returnable containers and needed to easily track them, both within its campuses and around the world, Grimm adds.
EMD attached trackers—from supply chain visibility solutions provider Tive—to containers to track products being transported, primarily on truck, throughout Europe. (EMD first secured permission from its customers.)
"This gave us insight about what our customers and forwarders are doing," Grimm says. For instance, EMD was able to tell if it took too long to pack some products, or if products were exposed to the sun for longer than they should have been.
In one case, EMD discovered the air conditioning in the truck wasn't working properly. An employee let the driver know the system needed repair. He was able to fix the system and save the products. "If we hadn't discovered this, we could have lost a complete truck of chemicals," Grimm says.
To be sure, such instances are rare—Grimm notes that problems occur on less than one percent of shipments—but they can be expensive. Just as important, the chemicals can become dangerous when not properly stored and transported.
EMD doesn't use Tive in all areas. Some chemicals it works with can't come into contact with the batteries used in the tracking devices. EMD's deployment of Tive is limited to areas and shipments where this isn't a concern.
As EMD's experience shows, supply chain professionals who know the location of each piece of inventory or material, whether in transit or within their facilities, and who can act on the data, can make more intelligent decisions. They can reduce safety stocks and cut costs. They also can cut out-of-stocks, boosting revenue. Visibility also facilitates the almost instantaneous delivery times many customers now expect.
Yet, true supply chain visibility remains more a goal than a reality for many organizations. Nearly two-thirds of more than 500 procurement leaders responding to the 2018 Deloitte Global Chief Procurement Officer Survey say they have limited or no visibility beyond their tier-one suppliers
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