Before the COVID pandemic, it felt like supply chain management was like a secret society. Sure, we all knew the complexity and challenge of bringing goods around the world and into your home, but most folks took it for granted. If they needed something they just went to the store and there it would be on the shelf, ready to be purchased! Once the pandemic hit, however, the spell was broken. Suddenly, the words “supply chain” were everywhere, and the dependability of available goods evaporated.
For us who were behind the scenes all along, the COVID-19 pandemic highlighted the critical need for end-to-end visibility in our supply chains. Sourcing and purchasing departments could no longer operate under the false assumption that their orders were correctly in route, unaware of the fulfillment issues plaguing their suppliers. This kind of lack of transparency exacerbated the pandemic’s disruptions at every node of the supply chain.
Had companies possessed thorough supply chain visibility prior to the pandemic, could they have prevented the disruptions entirely? Probably not. COVID impacted almost all aspects of our lives! However, it is certain that with better visibility, industry would have been able to respond more swiftly and better serve their customers as we all recovered from the initial shock.
Proper visibility and accurate alerts are key to achieving supply chain resiliency. But how much data is too much data? How do you find the right signal in all the noise? And what actions do you take when you get that signal? At Ventagium, we know that the key to supply chain visibility is, well, visualizations. To that end, we have developed analytic solutions to detect anomalies and provide insights into challenges as they occur, enabling companies to react quickly and effectively. In this post, we present three examples of these solutions:
1. KPI Monitoring
2. Processes Evaluation
3. Object Analysis
Let’s explore them together!
KPI Monitoring
Monitoring key performance indicators (KPIs) is essential for any organization. Leadership teams typically track these indicators over time and maintain records of past performance. But is there a way to shift our use of KPIs from retroactive reviews to early alert signals of developing concerns? As with most business questions, data capture is only part of the answer. How that data is analyzed, contextualized, and visualized can be the difference between a quick recovery or a painful postmortem weeks later.
One of the simplest but most effective visualizations you can integrate into your supply chain dashboard is a bullet chart. Bullet charts, like gauge charts, display the current value of a metric against an accepted target. However, at Ventagium, we prefer using bullet charts because they are easier to read and require less visual space than the traditional gauge chart. Additionally, bullet charts provide valuable context for metric performance, using established parameters and visual cues like color to indicate performance. Per our example below, one might assume that a 73% on-time delivery rate is quite good, but the alarming red color tells that in fact, this falls below our set target. We quickly see we are underperforming in this area and should immediately root cause the contributing issues.
Another visualization that provides critical context to performance issues is the process behavior chart. Imagine you are monitoring the percentage of on-time deliveries from your suppliers. A bullet chart provides a snapshot of the current value but doesn’t capture trends over time. For that, a line chart like the one below is required.
This graph gives more context than a single aggregated metric, including the significant variation in performance month-to-month. Should we have taken sweeping action each time the metric underperformed? Not necessarily. Every process has normal variation, known as noise, and true signals, indicative of real change. It’s crucial to differentiate between the two, allowing teams to focus on what truly matters. In other words, it is key to distinguish between real disruptions and expected variation. Process behavior charts include statistical limits on over and under performance and only call out disruption signals if actual performance surpasses these parameters.
In our example, we set a lower limit of 55% on-time deliveries. When our performance in October sank below that level, the visualization captured the alert.
Process Evaluation
Many processes in supply chain management involve multiple variables, making it challenging to pinpoint the cause of poor performance. With so much detail and complexity, how can you quickly identify the problem? We recommend process mining, a technique that analyzes data logs generated by each transaction in an information system. Continuing our example of order delivery processing, process mining would capture the exact time and date every order transitioned between delivery stages. By aggregating and examining these logs, you can identify which stage of the overall delivery process has performance issues (if your experience is anything like mine, this may reveal that the established process is not even being followed correctly!). For example, the table below shows that the “Sailed to Arrived” stage of the process is taking longer than it should in both Boston and Detroit.
Since transactional logs are continuously updated, process mining can promptly identify disruptions at any stage of the process. This enables timely action to address and resolve issues before they escalate.
Object Analysis
Bullet charts, process behavior charts, and process mining are valuable tools for identifying potential disruptions at the strategic and tactical levels. But what about the day-to-day operational level? Here, alerts can be configured to help buyers, planners, manufacturers, and others to detect and address issues as soon as they arise. The goal remains consistent: ensure that teams can identify and focus on what truly matters. Below are several on-the-ground supply chain examples illustrating this approach:
a) Analyzing lead times
The following bar graph displays the average supplier lead time for each origin/destination pair. Red bars highlight lead times that extended beyond expectations. As we can easily see, shipments from our Malaysian supplier generally have longer delivery times compared to the Chinese supplier. However, both suppliers face issues with the destinations in Helena and Seattle. Our internal sourcing or purchasing departments should contact both suppliers to investigate these specific destination delays and develop appropriate plans to resolve the issues.
b) Analyzing inventory and replenishment orders
Sometimes, inventory levels may appear adequate when considering the stock on-order, expected to arrive within a specified timeframe. However, if this inventory arrives late, stockouts can occur. For example, the products dashboard shown below displays inventory levels for each SKU. The notation in the rightmost column highlights late orders, alerting buyers to potential inventory concerns before stocking out and providing opportunities to resolve the issue without impacting customers.
c) Analyzing delayed orders
Similarly, the following consolidated graph shows the total number of orders based on their expected delivery window. You can immediately notice that eight orders are delayed by five weeks! Ventagium dashboards allow users to quickly visualize top-level analytics like this and drill down into the underlying granular data to root cause issues and identify opportunities for resolution.
Sadly, supply chain visibility won’t, in and of itself, prevent disruptions from occurring. And if any COVID-scale disturbances occur in the future, there may still be little we can do to keep the global supply chain hiccup-free. That said, the faster and farther ahead we can see issues accumulating, the better prepared we can be to manage through them and keep operations moving forward. Proper visualizations and alerts can be a critical tool in distilling the flood of data from end-to-end supply chain visibility into crucial indicators that action is required and where to focus. In short, visibility can be the essential difference between a minor issue and your next major crisis.
Before you leave, we encourage you to explore our comprehensive demo! Click on every button to explore it completely and navigate from strategic insights to tactical and operational views.
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