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                              January - March 2012

Stephen F. DeAngelis

End-to-End Supply Chain Visibility: It's no VUCA-tion for Supply Chain Professionals

by Stephen F. DeAngelis
Technology and Supply Chain Sector Entrepreneur, Enterra Solutions, LLC

In a survey conducted by ChainLink Research, pollsters found that "the vast majority of respondents (nearly 80 percent) do not manage risks beyond their immediate first-tier suppliers. Instead, they rely on their immediate suppliers to manage those risks." With so many well-respected supply chain analysts talking about the importance of developing end-to-end supply chain visibility, 80 percent seems like a big number of non-believers. Perhaps it is the phrase "managing risks" that causes that number to be so high. After all, having supply chain visibility is not exactly the same thing as managing risk. Regardless, I suspect that most supply chain analysts would tell respondents who fall into the 80 percent group that they are being shortsighted. Enterprise strategist, Lora Cecere, believes that companies need to develop "value networks that extend from the customer's customer to the supplier's supplier, and that [they need to] sense, shape and respond by listening, testing and learning with minimal latency."

Obtaining end-to-end supply chain visibility is not easy. Cecere asserts that challenges likely to be encountered along the path to increased transparency include: a lack of visionary business leaders; the continued presence of siloed business operations; and a lack of understanding that the supply chain "is the business." Bill McBeath, chief reaearch officer of ChainLink Research, agrees with Cecere. In his article about the supply chain risk survey, he notes that many companies learned the hard way that, in the aftermath of Japan's tragedy, being shortsighted comes at a price. He writes:

"The tsunami highlighted the risks in that approach and the importance of being aware of the impacts across multiple tiers of the supply chain. Many companies were impacted not by their immediate suppliers, but by their suppliers' suppliers or by secondary effects of the tsunami. ... It is risky to rely solely on your suppliers to deal with those shortages. Often times, suppliers are reluctant to be forthcoming with bad news, as they scramble and hold out hope that they will find alternative sources. By the time their situation becomes fully clear, it is too late. Having an understanding of the complete supply chain can be advantageous. You are in a position to know where there is capacity and constraint, and which suppliers are in a position to secure that limited output. This gives you a clearer picture of the true risks for your immediate suppliers, as well as an understanding of which alternate sources might have access to the limited supply. Then you can pursue those specific alternate sources more vigorously." McBeath wasn't as interested in the 80 percent of companies that didn't manage risks broadly as he was in the 20 percent of companies that did. He believes those companies have lessons to teach the 80 percent group.

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"Simply, quality remains a concern regardless of economic conditions. The duties of quality assurance have now been pushed down the ladder to the shop floor. On-machine and on-party inspections are commonplace in metal fabrication, automotive facilities and factories throughout the United States."
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