A new visibility report highlights the importance of risk management and supply chain collaboration in the context of Brexit, covid-19, and trade wars.
The "Supply Chain Visibility Report 2020" released by EFT delivers some interesting insights for supply chain managers. Especially, as it factors in the following market drivers:
For this report, 442 supply chain professionals across the globe have been surveyed. Of these, 42% are from North America, 31% from Europe, and 27% from Asia. Respondents represent businesses of various sizes across a broad range of sectors. This makes the insights highly relevant for AEB readers across regions and sectors.
While the full report focuses on the overall key facts around visibility, technology, risk management, and the future, this article will shed more light on two areas of particular interest:
In short, it's that "trust thing" again. This was also one of the key findings of another 2020 supply chain report – titled "Supply Chain 2020: Retail strategies to win from first to final mile" and released last year by RWRC Connect. It includes three noteworthy quotes from Geoff Taylor, General Manager of AEB UK, in the context of trust and collaboration in retail supply chains. And even though these quotes are from a retail-specific 2020 report, they very much apply to all other industries, too. Especially manufacturing sectors. The new 2020 visibility report, which confirms these quotes, too, finds manufacturers ranking behind logistics service providers (LSP) in all categories of the analyses.
"Retailers can only unlock the full potential of supply chain collaboration if partnerships are based on trust and data sharing. [To help establish trust,] various supply chain standards and international accreditation programs, like the Authorized Economic Operator, can help retailers define and commit to common collaboration values.”
“Integrating systems or deploying overarching visibility and collaboration solutions to connect all partners and share relevant data along the supply chain is a basic prerequisite for collaboration in retail to deliver sustainable value and increase margins.”
"Operating supply chain silos, together with the lack of system and partner integration, present key obstacles for retailers; get this right and reap the benefits of innovations in this constantly evolving sector."
In international supply chains, sharing refers to exchanging physical goods, paperwork, intangible services, and digital data from procurement to fulfilment. It involves many partners including suppliers, customers, service providers, and carriers. For many industry sectors, it also involves a complex structure of supplier tiers.
The new visibility report agrees with the quotes from above: "Fragmentation leads to disruption," it finds in this context. And visibility here is not just mentioned in reference to supply chain efficiency. Transparency is also about accountability.
As an example, the supply chain program "Cotton LEADS" in the textile industry is cited, an initiative supported by many key players in the market. This gives hope for improvements in this area. Because sharing, particularly that of data, has long held back supply chain collaboration and visibility.
Perceived technical difficulties, security concerns, conflict of standards, competition aspects, are all some of the popular excuses. The new report by EFT delivers many numbers to prove the benefits and value for all supply chain partners. Let's all be honest and agree that we don' even need this new proof.
We've had proof of value for some time now. But more and more programs bringing key players in various sectors together to agree on (data) standards is very helpful indeed. Together with advances in technology and much more flexible options for establishing integrated supply chain networks, this delivers good foundations for everyone to catch up.
Optimized supply chain processes from procurement to fulfillment with AEB's supply chain and logistics software. Including monitoring and alerting, carrier integration, shipping processes, freight and logistics cost management, and warehouse management at the heart of global distribution centers.
So supply chain visibility is essential or meeting customer demand, keeping up with competition, and operating efficient networks. And collaboration among all partners and supplier tiers forms the foundations for visibility. The complexity involved in successfully establishing and managing visibility in this environment is immense. This brings us to risks.
And it's quite clear that this environment alone brings along a good set of risks inherently. The longer the supply chain, the more borders to cross and more partners to involve, the greater the risk. It's basic math. As is the impact of visibility on risks: the more you see, the more you know, the better and faster you can act and plan. It's a vital part of risk mitigation. But it's not just about supply chain-internal risks – as complex as they may be.
Supply chain networks are no isolated or independent ecosystems. They are the motor of the world's economies and subject to much wider impacts than just those within. That's why this new 2020 visibility report is a timely reminder. More and more events that are out of the control of supply chain partners have added greatly to the existing challenge around supply chain risks over recent years.
Below you can find more information on the three market impacts that have been considered in the new 2020 visibility report: Brexit, trade wars and tariffs, and covid-19. But, the key takeaway for supply chain managers from the risk management chapter of the report is this:
For supply chain integration levels this means: The higher the better. For example:
But it also applies to processes. Integrating key processes and making them visible along the supply chain delivers similar value. In the context of trade wars, this refers especially to cross-border workflows, i.e. integrated broker exchanges, import, export, and other customs procedures with economic impact. If alternative suppliers are engaged at short notice and flexible customs solutions are in place, businesses can manage involved processes and costs much more to their advantage.
These solutions can help:
Carrier Connect
Multi-country Customs Filing
Customs Broker Integration
We hope these findings from the new 2020 visibility report delivered some useful insights and impulses. If you need support with establishing integrated and IT-supported supply chain visibility, collaboration, and risk management, please give us a call. Or check out the solutions below that represent good areas to start with.
Automation and integration of supply chain partners and key global trade and logistics processes is essential to survive transforming markets within increasingly volatile environments.
That is the good thing about all of this: It may be an old problem with added challenges, but the technological options available today certainly simplify things. Some of the issues involved are straightforward to resolve – with good benefits and return on investment for all supply chain partners. Not all of it is complicated. Take a look.
Learn more about AEB solutions for customs, compliance, and supply chain processes
