Let’s start with a multiple choice question. The real-time data revolution is: a) already here, or b) right around the corner, or c) will not happen for a long time. Which is right? Are they perhaps all right? Predictions of a major revolution in supply chain management due to the availability of real-time data have been around since the millennium. So far, these predictions have not come true. Real-time data has been making its way into some supply chain analysis, such as shipment visibility. But supply chain technology, processes and people are a long way from being able to use real-time data on a consistent and pervasive manner. Depending on your point of view, you are probably correct no matter which answer you chose.
As they say, the real-time data revolution will not be advertised. It will happen slowly. Early adopters will begin to report major improvements in cost and service performance in their supply chains as their real-time data use ramps up. Supply chain leaders, like Wal-Mart, will begin to make real-time data usage mandatory in partner communications (after all, they are already leading the RFID revolution). Technology vendors will increasingly add real-time data use capabilities to optimization, planning and execution software. Companies will begin to modify supply chain processes and train people to operate in a real-time world. Before you know it, real time data will have been embraced as the new, new thing in supply chain by early adopters, like P&G and H-P.
Are you skeptical? I don’t blame you. The world is full of pundits and predictions. What we do know is that real-time data has the potential to radically transform businesses and supply chains. The first question is whether we have any evidence that real-time data will become critical to supply chain operations.
Why Can't You Do Something to Help Me?
With apologies to Laurel & Hardy, supply chain professionals remain under intense pressure from all fronts to consistently perform at high levels of customer service while controlling or reducing costs.
Your customers
Your customers are increasingly looking to develop demand driven operations. Simply put, many of them want products on a just-in-time basis, requiring much more responsive vendor supply chains and tighter performance standards. But wait, we are not done. Demand driven operations also implies changing orders, carriers, delivery dates and ship to locations, often when the shipment is ready to go or even en route. And did we mention that we want it done now, not in some efficient order change process you have developed in house.
Your company
Your company can also play the real-time management game. The CFO is on your back to better monitor facility, transportation and overhead costs, sometimes on a daily basis. The CEO is fielding all those call from customers with demand driven operations wondering why your company can't keep up with the new business requirements. And the CCO (Chief Customer Officer-if you don't have one now, you soon will) wants hourly reports on key customer deliveries and critical order status so that they can anticipate issues with top customers.
Your vendors
Finally, your vendors are asking for help in making their operations more efficient, so that they can reduce costs and improve service. This includes asking for more data, in advance; more frequently to help them better plan your deliveries. It may also include requests to form task groups to work collaboratively to enhance collective operations. The expectation is that is vendors are going to reduce prices; you are going to have to work with them on collaborative, cost-reducing initiatives.
So, real time data can potentially be very useful in managing many aspects of a supply chain, as well as helping you better serve your customers. Next week, we will examine how you can use real time data to begin revolutionizing your supply chain operations.
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