Supply chain management is a high-wire act where unexpected disruptions can strike at any moment – and trust me, they always seem to arrive uninvited and at the worst possible time. While traditional shipment tracking methods have been the go-to solution for years, they’re often about as effective as trying to navigate a minefield with no map. The truth is, modern supply chains demand more than just reactive tracking; they need proactive operational visibility to stay ahead of the curve.

In this article, I’ll outline the chasm between reactive shipment tracking and proactive operational visibility. Moreover, I’ll share my insights on the best strategies for proactively identifying exceptions across the entire supply chain (not just the shipping part, exceptions can pop up anywhere). This includes how to use data analytics rapidly to not only mitigate risks but also uncover new opportunities. Lastly, I’ll give you tips on seven innovative technologies available today to bridge this gap and transform your supply chain management.

1. Reactive Shipment Tracking: A Limited Approach to Dealing with Supply Chain Exceptions.

Without a doubt, effective supply chain management relies heavily on the ability to track shipments and respond to exceptions. However, traditional shipment tracking methods often fall short by providing only a reactive approach to managing disruptions. So, let’s look at the essentials of shipment tracking to understand both its benefits and limitations. Moreover, we’ll look at why it falls short with tackling and preventing supply chain exceptions.

a. Shipment Tracking and Business Intelligence (BI) Just Describes What Happened.

First, let’s dispel the myth that perfect shipment tracking and an up-to-date Business Intelligence (BI) reporting dashboard is the solution to our supply chain visibility woes. While shipment tracking and BI tools do provide valuable insights into shipment status, they are inherently reactive. Without a doubt, reactive tracking only offers a historical perspective rather than a forward-looking one. At the same time, shipment tracking is essential for establishing a single source of truth (SSOT) that enables the measurement of key performance indicators (KPI) and the detection of many supply chain exceptions. However, there is more to supply chain visibility than just shipment tracking and descriptive BI reports. For more information on Descriptive Data Analytics, Click here.

b. Identifying Supply Chain Exceptions at Best Enables Diagnostics After-the-Fact.

The Truth About Diagnostic Analytics: A Forgotten Way To Better Business Performance

It is a fact that traditional shipment tracking methods only allow companies to identify supply chain exceptions after they have occurred. Hence during the shipping process, management can only use timely tracking and descriptive analytics to react to shipment exceptions. As a result, this type of reactive analytics does enable supply chains to act, minimizing damages caused by exceptions. Also through diagnostics,  supply chains can take corrective actions to improve future operations. On the other hand, shipment tracking alone does not provide more comprehensive visibility to such insights as matching planned to actuals and determining likely future exceptions across the supply chain.  

For more specifics on how to handle delivery exceptions see my article, Ecommerce Delivery Exception Mistakes To Avoid And How To Handle. Also, for more on diagnostics analytics, see my article, The Truth About Diagnostic Analytics: A Forgotten Way To Better Business Performance.

c. Tracking Tech Not Proactive in Identifying Likely Supply Chain Exceptions, Nor Their Remedies.

Despite having access to advanced technologies, supply chain operations often lack the necessary data insights to anticipate and respond to potential disruptions. For instance, Real-Time Transportation Visibility Platforms (RTTvP) primarily focus on tracking shipments, answering the question “Where’s my stuff?” rather than providing a broader view of supply chain operations. Hence, this limited visibility means that supply chain operators are often caught off guard when exceptions occur. Moreover, relying solely on shipment tracking doesn’t provide a complete picture of other critical logistics functions, such as order fulfillment and financials. In reality, supply chain exceptions can arise from various unexpected events beyond just shipment issues. This lack of supply chain exception management ultimately leads to breaking our promises with our customers.

To improve supply chain resilience, it’s essential to move beyond reactive tracking and towards proactive operational visibility. For more on this shipment tracking, see Grant Sernick’s article, Visibility Beyond RTTvP. Also, more on the latest tracking tech, see my article, 10 Logistics Tracking Technology Trends.

2. Proactive Operational Visibility: The Way to Identify Exceptions and Their Remedies Across the Supply Chain.

In today’s complex and dynamic supply chain landscape, proactive operational visibility is crucial for identifying and addressing exceptions before they escalate into major issues. Traditional reactive approaches such as just tracking shipments fall short, leading to delayed responses and increased costs. By adopting a proactive approach, organizations can enhance their supply chain resilience, improve customer satisfaction, and drive business success. Below, I’ll identify the critical capabilities needed to achieve proactive operational visibility. First, this includes being able to prioritize and focus on the right problem. Also, supply chains need to aggressively use data analytics to rapidly close information gaps for agile decision-making. Lastly, operational visibility needs the capability to do rapid situational assessments based on time and information available.

a. Manage Supply Chain Exceptions: Orient on the Right Problem or Opportunity.

First, let’s look at the basics of supply chain management. At its core, supply chain management is about solving problems to deliver goods and services to customers. Moreover, a lot of a supply chain manager’s time is spent day-to-day on operational issues and opportunities arising from unplanned exceptions. This is why it is crucial that as soon as these exceptions occur, or are likely to occur, supply chain professionals must know about them and prioritize which of these exceptions are most impactful.

To proactively manage these supply chain exceptions, we must first focus on the right problem or opportunity. Given the dynamic, digital nature of today’s supply chains, all operations must continually assess and prioritize their efforts as new exceptions emerge. Hence to effectively do this, a comprehensive range of data analytics is necessary to provide operational visibility in a time-sensitive manner.

b. Rapidly Close the Information Gap Applying Analytics to Assure Better Decisions and Outcomes.

The next most critical capability for achieving operational visibility is to rapidly find out what information is needed about a particular exception or unplanned event to make the best decision within the time available. This involves gathering relevant data, rapidly analyzing it, and providing actionable insights to decision-makers. Here, data analytics can close the information gap as follows:

Types of Data Analytics to Gain Operational Visibility

A Data Analytics Perspective To Better Empower Supply Chain Managers

1. Descriptive: Identifies what is happening, both planned and unplanned events.
2. Diagnostic: Analyze exceptions to determine root cause and level of impact.
3. Predictive: Determines the expected impact of current and likely exceptions.
4. Prescriptive: Recommends what are the best courses of action to mitigate risk and take advantage of opportunities.
5. Real-Time, On-Demand Analytics: Uses digital capabilities such as Internet of Things (IoT), cloud computing, and network communications coupled with rapid analytics to enable immediate, informed decision-making.
6. AI-Powered Analytics: Leverages large knowledge data sets, learning capabilities, and autonomous AI agents for better analytics and even answer unasked questions.

https://sctechinsights.com/a-data-analytics-perspective-to-better-empower-supply-chain-managers/With these powerful analytical capabilities, supply chains can have proactive operational visibility, rapidly bridging the information gaps to assure the best decisions and outcomes. For more on these types of analytics, see my article, A Data Analytics Perspective To Better Empower Supply Chain Managers.

c. Make the Best Situational Assessment Based on Time Available

Another critical capability of operational visibility is to be able to make rapid situational assessments that lead to the best, informed decision based on time available. When it comes to operational decision-making, an impact assessment can range from milliseconds to months. Below I identify a six-step impact assessment process that is both rapid and thorough. This approach will help you prioritize critical events, set confidence levels, diagnose issues, assess probable impact timing, compile necessary information, and identify mitigating factors. By following these steps, decision-makers can quickly gain operational visibility over complex situations to make better business decisions.

A Rapid 6-Step Impact Assessment Approach for Informed Decision-Making:

The Best Impact Assessment Approach that will Quickly Orient You for Better Business Decisions

1. Prioritize Which Event Needs an Impact Assessment.
2. Assess Confidence Level of Data Sources Triggering the Impact Assessment.
3. Use Diagnostic Analytics to Determine What Happened.
4. Apply Predictive Analytics to Assess Potential Impact of Not Acting.
5. Identify What Information is Needed to Make a Good Decision and Then Gather Missing Data.
6. Complete Impact Assessment Determining What Is Most Likely Affected, When Will It Happen, and Mitigation Factors.

For a detailed description of this rapid approach to impact assessments, see my article, The Best Impact Assessment Approach that will Quickly Orient You for Better Business Decisions.

3. Proactive Operational Visibility for Supply Chains: Tech to Bridge the Gap from Reactive Shipment Tracking.

The transition from reactive shipment tracking to proactive operational visibility is not just a technological upgrade; it’s a strategic shift in how supply chains are managed. By embracing proactive operational visibility, organizations can bridge the gap between reactive tracking and proactive supply chain management. Below, I’ll identify both the barriers to overcome and what technology capabilities that are available for all supply chains to achieve operational visibility.

a. Operational Barriers to Effective Supply Chain Visibility and Exception Management.

Achieving seamless supply chain visibility and effective exception management is crucial for businesses to stay competitive. However, several operational barriers hinder our ability to do so, leading to inefficiencies, increased costs, and decreased customer satisfaction. Understanding these issues is the first step towards overcoming them. Challenges include:

Examples of Operational Visibility Challenges

• Data Interoperability. For example, a manufacturer using EDI (Electronic Data Interchange) standards may struggle to exchange data with a logistics provider that uses a different data format, leading to delays and errors.
• Application-Centric Vs Data-Centric. For instance, a company that relies on multiple applications for supply chain management may find it challenging to get a unified view of their operations. Worse, the data in each enterprise software silo is out-of-date, incomplete, not accurate, duplicated, ambiguous, and has conflicting meanings.
• Complicated Shipping Data Structures. For example, a carrier’s shipping status may have a completely different data structure than the shipper’s Transportation Management System (TMS). For instance, this could include different data labels, varying meanings of key business terms like “shipped”, dissimilar date fields, and missing data fields critical for shipper’s system to process.
• Not Using Analytics for Rapid, Informed Decision-Making. For example, a retailer that doesn’t use predictive analytics may struggle to anticipate and prepare for demand fluctuations, leading to stockouts or overstocking.

For a more detailed explanation of operational visibility barriers, see my write-up, If The Tech Is Available, Why Do Companies Still Struggle With Supply Chain Visibility?

b. Key Operational Visibility Tech Needed for Proactive Supply Chain Management

In today’s complex and interconnected supply chains, achieving operational visibility is crucial for proactive management and exception handling. By leveraging the right technologies and strategies, businesses can gain on-demand and real-time insights into their operations, anticipate potential disruptions, and make informed decisions to mitigate risks. The following tech is essential for building a proactive and resilient supply chain.

Key Tech Functions for Achieve Proactive Operational Visibility

Emerging Tech For Supply Chain Visibility: The Best Innovations Available Now To Empower Businesses

• Tracking Technologies: For example, GPS and Computer Vision AI can rapidly identify supply chain exceptions and provide for a Single Source of Truth (SSOT).
• Internet of Things (IoT) Devices. For instance, RFID sensors and telematics provide a more granular, real-time visibility of objects and the environment that can detect exceptions and predict failures.
• Data Integration Tools. Increases access to data and enables rapid, unified view of supply chain operations, sharing data at the right time and place.
• Semantic Interoperability. Ensures that data exchanged between different systems is understood in the same way, reducing errors and misinterpretations.
• Knowledge Graph AI. Provides data structure links that provide meaningful interconnection of disparate data sources, both structured and unstructured, and provides rapid analytics to detect, diagnose, predict, and prescribe.
• Digital Identity Technology. Enables a secure and transparent approach to exchange data between supply chain visibility partners, objects, and even AI agents.
• Data Analytics. Makes supply chain visibility data both insightful and actionable.
• Decision Systems. Includes AI and Machine Learning (ML) to enable rapid, informed decisions, increased adaptability, and can even automate decision-making processes.

For more on critical capabilities for achieving operational visibility, see my article, Emerging Tech For Supply Chain Visibility: The Best Innovations Available Now To Empower Businesses

Conclusion.

So in this article, I described the gap that supply chains have between reactive shipment tracking and proactive operational visibility. Moreover, I shared with you the best strategies for proactively identifying exceptions across the entire supply chain (not just the shipping part, exceptions can pop up anywhere). Specifically this included how to use data analytics rapidly to not only mitigate risks but also uncover new opportunities. Lastly, I shared with you seven innovative technologies available today to bridge this gap and transform your supply chain management. The bottom line is that modern supply chains demand more than just reactive tracking; they need proactive operational visibility to stay competitive and delight their customers.

More References.

• Risk Mitigation: Risk Mitigation For Supply Chains: How To Best Identify, Make Assessment, Overcome
• Supply Chain Resilience: Supply Chain Resilience: Ways Tech Can Prevent Risky Disruptions, Stabilize Things, And Make For Quick Recovery
• Analytics Types: Supply Chain Analytics Types and The Way They Work To Better Empower Decision-Making
• Supply Chain Visibility Types: Surprisingly Supply Chain Visibility Has Many Forms: See Which One Is Best To Be Your Business’ First Focus
• Business Agility: OODA – Enabling Business Agility: The Best Way To Disrupt Competitors, Seize Opportunities, And Overcome Obstacles

Surprisingly Supply Chain Visibility Has Many Forms: See Which One Is Best To Be Your Business’ First Focus

Need help with an innovative solution to make your supply chain analytics actionable? I’m Randy McClure, and I’ve spent many years solving data analytics and visibility problems. As a supply chain tech advisor, I’ve implemented hundreds of successful projects across all transportation modes, working with the data of thousands of shippers, carriers, and 3rd party logistics (3PL) providers. I specialize in launching new analytics-based strategies, proof-of-concepts and operational pilot projects using emerging technologies and methodologies. If you’re ready to supercharge your analytics or if you are a solution provider, let’s talk. To reach me, click here to access my contact form or you can find me on LinkedIn.

For more from SC Tech Insights, see the latest articles on Shipping, Information Technology, and Supply Chains.