Six Steps to Secure Global Supply Chains

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SIDEBAR: How Existing SCE Systems Secure Supply Chains

Here are some supply chain execution (SCE) applications you may already have that can help secure and improve supply chain operations:

Network-wide Visibility

A centralized database, containing detailed information on all products and assets at suppliers, in-transit around the globe, in distribution centers, and at customer sites, is best stored in an SCE suite, which includes a warehouse management system (WMS). The WMS provides a completely accurate view of all inventory through a Web-based communication tool. That gives immediate visibility into products at suppliers, warehouses and distribution centers. This visibility not only allows companies to source and ship from alternate sites during a disruption, but it also enables them to more efficiently source orders during normal operations.

Visibility to products in-transit and those shipped to customers should be provided by a transportation management system (TMS). This tool provides Web-based communication with carriers, forwarders and customers for a picture of inventory in motion. The WMS and TMS should be integrated for a single view of inventory across the supply network that provides knowledge and flexibility during disruptions, but also improves customer communications and service.

Asset Management

By tracking and monitoring mobile assets, companies can better track and protect the products inside of them from theft, damage and tampering. There are a number of technologies that can help with this surveillance, such as sensors and RFID tags in trucks or shipping containers.

Asset management software merges the data from these tools into information through role-based dashboards, giving a near real-time view of the assets and products in motion. Companies can take action immediately when movements or conditions depart from accepted norms. This combination of visibility and action helps secure the supply chain from threats such as contamination, spoilage, theft and terrorism, and also enables companies to quickly divert product to other destinations to recover from disruptions.

Transportation and Global Trade Management

Existing transportation and global trade management systems can plan and execute alternate routes to move product around or into affected areas before, during and after major disruptions. This may involve alternate routes, shipping modes, ports, carriers and supplier locations. The key is to plan alternatives ahead of time. Agreements should be reached with alternate sources or carriers, so when a disruption occurs, companies can hit "go" instead of the panic button.

Demand forecasting

Companies should examine the magnitude of the impact on demand of various types of disruptions. For example, a Category 2 hurricane may raise demand for plywood 50 percent while a Category 5 one may raise it 150 percent.

Companies need to isolate demand factors within the local area impacted by a disruption. Traditional demand forecasting systems aggregate demand to forecast production requirements. They lack the specificity to analyze local demand surges associated with disruptions.

It is better for companies to use forecasting models incorporating point-of-sale and store inventory data so they can understand and simulate the demand impact of various events. Integrated store operations and supply chain systems can now conduct this analysis. By integrating local store information with historical patterns, these systems forecast the appropriate inventory levels to prepare for, and respond to, disruptions.

QA/Recall

Today's SCE systems create virtual quarantines of products so they can be shipped directly from production. Since the system knows exactly where the products are and places holds on them until all QA processes are complete, companies can allow inventory to flow through the network. The system prevents products on hold from being shipped to customers until all holds are released.

However, tainted products are still getting through. When recalls occur, products must be recovered quickly and accurately. The key is in knowing exactly what products (by batch or lot number) were shipped to which customers, so only the tainted lots are recovered. The difference in effort, expense and damage to brand image between a general recall and a laser-targeted recall is huge. Today's SCE systems can track this; a few can even assist with the recall.

Workforce Management

Prevention and recovery plans must contain contingencies for addressing the human aspects of the supply chain. Workforce management (WFM) solutions greatly assist in recovery planning and execution. They use historical information, order demand data and labor standards to plan and schedule workforce requirements during both normal and disrupted operations. This lets management know exactly how many workers with which skills are needed to fulfill orders in normal operations (which increases efficiency and service) and in recovering from a disruption event.

The WFM solution should also identify where fulfillment operations can be temporarily moved, as well as the associated labor cost. Preferred methods that define the optimal way to do each task and learning management systems also help new and alternate workers get up to speed quickly.

— Jim Le Tart