Monthly Archives: December 2013

Santa gets product through customs…can you?

First I want to wish happy holidays to everyone and their families and friends. As a child we were told that jolly Saint Nick would come down our chimneys on December 24th and deliver presents to all the good boys and girls. The rotund man dressed in red would be able to canvass the globe only powered by a sleigh pulled by reindeer – and amazingly have 100% on time delivery and usually 100% perfect order (there are still some orders I placed that had substitute products). So how does he accomplish this? He has perfect visibility into the demand (all those letters, emails and texts he receives in the North Pole) as well as his inventory levels. One advantage Santa Claus has is that he is carrying all of the inventory and doing the delivery himself, tiring yes, but he really just needs a routing schedule. This is not as simple for the rest of us.

Visibility is a term that we throw around with reckless abandon, but the goal of visibility remains a centre piece to our supply chain strategies. The ability to gain visibility was a driving theme for the adoption of the cloud in supply chain. There are numerous example s of companies leveraging cloud enabled platforms to provide a richer view of what was happening with suppliers, providing insight into planning cycles, inventory levels, manufacturing capacities, point of sale information just to name a few. Improved visibility really begins with the better communications amongst our disparate systems that power our supply chains. Companies, such as Kinaxis, have developed the concept of a supply chain control tower. The control tower allowing faster visibility into supply chain events: a centralized tool that allows for a greater ability to read and react. Other companies like One Network and E2open been able to leverage the technical advantages of the cloud – greater connectivity, allowing for greater visibility and offering true network effect. Allowing for networks to be seamless created, where information exchange can happen with fewer limitations. At the foundation, it is about improved visibility into the supply chain.

However, one variable when it comes to better supply chain visibility that does not seem to get the attention is around inventory that is held up at ports, airport or any point of exit or entry for trade. In a recent SCM World report, 80% of the respondents agreed that customers and customs problems were impacting customer service in a material way.

So when it comes to gaining improved end to end supply chain visibility, the ability to have  more robust view of what is happening to your inventory at these locations is a key element. According to a calculation done by Kelly Thomas at JDA, at any given moment $12 trillion of inventory is either sitting or moving in the world. The question becomes, how much of this inventory is being delayed due to customs issues or because of not having the proper paperwork? Not only does this impact the movement of inventory but also impacts the positioning of inventory. Firms like Cisco, HP and Dell who have very tight service level agreements (SLAs) when it comes to servicing their customers have to take into account customs when placing their inventories in different parts of the globe. This can lead to having redundant inventory that is geographically close, but separated by a border that leads to custom issues…which could delay the ability to meet their SLAs.

Companies such as Amber Road and GT Nexus provide their customers with the ability to have greater visibility into inventory when it is in this state. Where is it in the process of such stages as clearing exports, or passing import hurdles? This level of visibility is key when it comes to managing the rest of the supply chain. Allowing customers to identify what can be a bottle neck – the points of entry. Gaining this added insight into what is happening where your inventory looks to cross a border clears up on more potential blind spot in your supply chain. Since the movement of global trade is not about to abate any time soon, this blind spot carries tremendous impact on your overall supply chain.

Santa Claus has found a way to move his inventory globally without worrying about it being held up at points of exit or entry. The rest of us still need to find ways for enhanced visibility into these physical choke points in our supply chain. When it comes to visibility, make sure you work with your service provider(s) to identify the granularity and speed at which you can see into where your inventory sits. We are striving to get closer to true end to end visibility, but there remain blind spots that we must be aware of.

Leave a comment

Filed under Supply Chain