Visibility is what it’s all about for supply chain and logistics managers. Having real-time visibility & insights into your supply chain leads to all kinds of benefits. Performance improves, costs fall, and customers are happier. As a shipper or forwarder with increasing competition, you can’t afford not to make your supply chain transparent. What’s more, companies have a variety of reasons for wanting a clear picture of parts or all the supply chain.
In this Article:
- What exactly is real-time visibility?
- Why is visibility so important for shippers and forwarders?
- The power of data in the logistics chain
- How can you create the most value by connecting data?
1. What exactly is real-time visibility?
Let’s start with an example: visibility is a clear picture on the logistics chain for toys - for example, radio-controlled cars - during their journey from Asia to Europe. A journey that can be followed step by step, tracked until the item is in the store in time for a special campaign or the Christmas season. During the journey, you can see whether each link (plane, boat, truck) is on schedule and when the container or pallet with the toys can be picked up at a port or warehouse. At the same time, there is clarity on things like the contents of a shipment, its value, condition (temperature) and customs formalities (documents required).
Real-time visibility in the logistics process means knowing what goods movements are taking place between the different links in the supply chain. In many cases, this will be the moment a product or load carrier starts its journey from a manufacturing site towards the end customer. The term “real-time” literally requires carriers to send continuous updates and for the owners of the goods to be able to see this information directly. Creating real-time visibility is not all that easy to manage. It requires different types of cargo carriers and hauliers to be able to share data with their supply chain partners. These data should also be shareable in such a way that a clear overview can be created for shippers and forwarders. To achieve this, sensors must be able to share data, and the supply chain partners’ applications must be connected.
More ways to acquire insights
Opportunities for real-time visibility are increasing. With the emergence of APIs as an addition to the existing EDI links, it is easier for systems to swap data with each other. In addition, there are ever more modern transport management systems, dedicated ‘visibility’ platforms and other digital tools to make data transparent. That all seems ideal, but you do need to be able to reap the benefits as a shipper or forwarder.
Is real-time visibility really always real-time?
In many cases, real-time visibility is based on approximately real-time data. The image a planner is looking at is a few seconds old, 10 minutes old or even less up-to-date. Even data from platforms that loudly proclaim that they deliver real-time visibility can be as much as six to eight hours old in some cases. The simple explanation is that data cannot and not always need be accurate.
Updates every second, minute or hour?
The accuracy of data depends a great deal on the frequency with which systems share or can share data with each other. When using EDI links, supply chain partners reach agreements on the frequency with which their systems will share data. This may be hourly, but more often a longer interval applies. Additionally, there are sensors, separate or in trackers depending on the systems with which they can share the collected data. Is there any way to transmit data on the condition of goods while in the middle of the ocean? Chances are that this data will only be shareable once in port, as only then will it be within range. Software tools can use algorithms that can accurately estimate the position of a ship or cargo carrier and thus keep the systems in the supply chain informed of its progress. These algorithms use GPS data to calculate ETA, but by no means always use the same data for determining position.
2. Why is visibility so important for shippers and forwarders?
There are several reasons why real-time visibility matters so much to shippers and forwarders - more than, say, 10 or 20 years ago. One reason is that companies get more understanding of how best to respond to uncertainties in the supply chain. Another and equally important reason is that a company can give customers a clearer picture of where their products are in the supply chain. Additionally, customs data can be useful, for example notifications when cargo is released by customs. This can benefit shippers and forwarders.
Is this desire for real-time visibility new? Not at all. With the advent of digitalization and the collection of more data, the need to do something with that data also increased. Meanwhile, there are many ways to track ships or aircraft worldwide. Analysing that data pays off, not least from a logistics perspective.
Investment is increasing – satisfaction is not
Analists such as from Supply Chain Insights are making annual lists. This body publishes an annual study on ‘Redefining the Supply Chain’. This shows that companies yearn for supply chain visibility, but with only limited success. Since Supply Chain Insights launched its survey in 2015, there has been no improvement in the gap between how much companies value ‘visibility’ and their actual achievement of it. The bottom line: despite the many tools and platforms and multi-million-dollar investments, there has been no corresponding increase in satisfaction. The reason: data collection other than using a TMS is too fragmented.
From disruption to renewed insights and grip
The structural collection of data from the logistics chain has only recently attracted so much attention. The huge supply chain disruptions caused by the Covid-19 outbreak caused the world to say goodbye to a certain reliability. You simply knew how long it took for a product to arrive in Rotterdam from Asia. Developments in digitalization also increased. Modern TMS applications can collect real-time data themselves and use it at every stage of the transport process. This gives all stakeholders insights and support. A clear(er) picture is emerging of the logistics chains in which they operate.
What insights do you need?
What sort of real-time data and insights do you need? Having no reliable insight into your transport movements is by definition not good. But companies should ask themselves about the added value of certain requirements. Does it make sense to get an update on a truck’s location every minute? Does it make sense to apply complex AI algorithms to know whether a boat is close to port? After all, how much does this reflect the actual time/date a terminal can process your container? And is this accurate knowledge any use if your customs declaration isn’t ready yet?
Responding more promptly to changes
Real-time visibility can give you a competitive edge. But is it actually enough to outperform your competitors? That depends mainly what you do with the visibility data. Do you use it to make more proactive decisions that keeps the supply chain moving smoothly? Do you share the data with the customer so they can do the same? Real-time insights only make sense if you can do something with them. For example, coordinate a chain more smoothly. A retailer designing a leaflet for a campaign in June, for instance, will want to be sure the goods arrive on time. A campaign without its products is obviously a non-starter. Insight into what is happening in the supply chain also creates opportunities for more timely responses to logistical changes. If you know that a particular container is facing a hefty delay then you can notify the rest of the supply chain and perhaps have the same product arrive via another route.
3. The power of data in the logistics chain
Visibility is a top priority because more and more companies are recognising the power of data in the logistics chain. With the availability of data from different corners of the supply chain, you can increase control and flexibility when it comes to goods movements. You know what’s happening at each link in the supply chain and can react accordingly. In an ideal world the planner of that chain doesn’t spend all day checking whether things are going well. What you want above all is to be able to send automatic notifications via EDI/API to the relevant stakeholders in the supply chain. Even if you’d rather only receive notifications about the things that are going wrong or threatening to go wrong. You can then put your energy into that, for example by informing customers in time before they raise the alarm themselves.
Combining data flexibly
As a shipper or forwarder, you want to be able to automatically combine data from across the supply chain and several
applications. Quite logically, this involves data from software tools such as a TMS and customs software for providing
insights into events at item and line-level (think dashboards) and data derived from sensors, for example from containers (using trackers).
Strength in the supply chain relies on data
Is it easy to combine these data? For many businesses, this is still a challenge. It is not always clear which applications and standards are needed, and besides, there is never enough time. Exchanging data, the absolute basis for supply chain grip/control, is also complex for a number of reasons.
This means that sharing data may not be straightforward
- There are both industry and carrier-specific communication standards and formats. Think of AS2, SFTP, GS1, IATA, DCSA, UN/EDIFACT, ANSI X12 and JSON.
- Is a standard really a standard or is it just an interpretation of a standard? Did a carrier develop a variant of a standard because it was easier, and then went to add more data to it?
- Is there already a standard EDI or API link between the different systems in the supply chain, between the carrier's and shipper's software? Does this still need to be developed and if so how long will it take?
- Is an existing link still usable when one of the supply chain applications is updated?
- Do the supply chain partners use the same definitions? Are you talking about the same assets or content?
- What does a container ETA mean? Do you mean the time when the boat arrives? There's a chance that a forwarder will interpret the container ETA as when the container is off the boat and released by customs. The actual pick-up time depends on the definition.
- How do you make sure you can use data to influence the way a forwarder works?
Combining as much data as possible on one platform
The power of data is enormous, but at the same time this calls for systems (TMS) that can combine these data in one logical place or system - including data from different modes and a clear picture of customs issues. So you can use these data to optimise your supply chain and keep stakeholders informed, but also to measure the performance of your logistics partners in detail and hold them to account.
In-house or outsourced carrier onboarding?
Visibility depends on flexible data exchange, where the systems used can also handle the different standards. Setting up the necessary application landscape and carrier network is not always easy. There’s a choice between doing this yourself or outsourcing. A growing number of companies are opting for outsourcing, partly because it leaves them free to focus their efforts on what they do best. A modern TMS provider has the functionalities and a vast logistics network for collecting all the relevant real-time data and for enabling communication (bookings, invoices, etc.) between shippers and their forwarders/carriers automatically via EDI/API.
Choices to make
Being able to benefit from a smooth-running network gives you the chance to react quickly to changes, or to a customer’s altered needs. But what if a standard undergoes further development and your organisation is unable to handle it? Or you need to set up a link to a carrier-specific format or version? If you opt to do this yourself, you run the risk of not being able to exchange data quickly enough, if at all. This can interrupt the continuity of your operations and customer service. If you choose to make the adjustments yourself anyway, you absolutely must take and keep the available knowledge within the organisation on board. This is a ‘must’ if you want to continuously harness the power of an efficient logistics chain.
4. How can you create the most value by connecting data?
Someone who has a lot of data from the logistics chain can also combine it into meaningful information. It can then be used to trigger automatic actions and thus create value. Shippers and forwarders who have reached this point benefit from data driven logistics. TNO (The Netherlands Organization for Applied Scientific Research) researchers published an article summing up the main benefits, in the form of efficient logistics using (mostly real-time) data:
- Predictable transport and smart planning
- Planning with impending ships and expected arrival times
- Managing traffic flows in cities
Give yourself access to improvements and savings
Companies that can process real-time data can then analyse it and take steps to fine-tune operations in the supply chain. This approach is no longer just nice-to-have but a necessity, partly because new technologies are developing at lightning speed. And quite simply, if your company doesn’t do it, your competitor will. So it is important to have the basic applications in place and to start processing data, aggregating it and analysing as many flows of goods as possible. If you succeed, you will give yourself access to the most important parts of your business where you can save money, add value to your own and your partners’ supply chains and make the most of your transport network by understanding carrier performance.
Controlling the supply chain
Real-time data are only valuable if meaningful, reliable and of use to the various stakeholders in the supply chain. These data should be part of mainly automated communication between suppliers, carriers and customers. The most important data – call it information – should then be visible to a control tower (/TMS). This is one of the ways to create value from aggregating data. A control tower dashboard makes it very easy for planners to see what is and isn’t going well in the supply chain and hence put their energy and knowledge into fixing what could and should work better.
Example: from seamless chain alignment to value creation
What meaningful easy-to-share data look like is best illustrated by an example. Let’s take the delivery of a large scanner to a hospital. It is likely that once it’s delivered, a team will have to be ready and waiting to install it. Accurate information about the delivery time is important for the shipper who owns the scanner, but it’s at least as important to be able to share that data easily with the customer (here, the hospital) or the service engineers. You can only succeed if data can be shared easily with supply chain partners. If the delivery is slightly delayed, you can inform the installation team and they can do something else in the meantime.
Centralising the data
A shipper or forwarder that assembles the supply chain data in one place gives itself the chance to get the best value out of that data. A TMS is the most appropriate application for this. Then you can be sure that you have a system that can deal with the different standards in the supply chain. The same TMS then helps you direct your logistics partners. On the one hand, you have an overview of what is happening in the inbound chain, and on the other you can build a bridge to the logistics world that you want to control yourself.
Extracting value from one version of the truth
Once you understand what is going on in the supply chain, you can share that information with your partners. This gives a better idea of each other’s strengths and weaknesses. Ultimately, sharing data and insights from analytics gives you the opportunity to work with shippers, forwarders and logistics service providers to make your supply chain different from those of your competitors. You are more likely to succeed if you use a single version of the truth, in the form of a central TMS that organises data and communication automatically. In it, you can combine all the supply chain data, analyse them, and, based on that information, continuously rectify any imperfections. In this way you create value step by step for yourself, your partners and your customers.
Want to find out more about the real value in visibility?