Many suppliers, carriers or logistics operators are hesitant to be fully transparent with their customers. Often, companies detect shortcomings through this information. However, they prefer to handle problems before the customer becomes aware of them.
On the other hand, many shippers are not comfortable sharing data with their suppliers or vendors. In these cases, there are concerns about intellectual property, financial margins or security risks.
This is understandable, as information makes it possible to detect and monitor the situation at all times. However, this behaviour can result in a lack of trust between the different links in the supply chain.
Transparency helps to build trust. When industry players are able to demonstrate that they have the tools and capacity to resolve potential contingencies, they make excellent supply chain partners.
In this way, the visibility and transparency of these partners create an atmosphere of real collaboration. Over time, the links in the supply chain learn to complement each other and drive efficient practices for all parties.
Many supply chain actors already have Big Data tools or systems to track their operations. With them, they can collect copious amounts of information and gain visibility into their transactions. Analyzing this data makes it easier to predict, anticipate problems and improve collaboration with their partners.
Post-Covid: A Shift in Collaboration
For many people, the world stopped with the Covid-19 pandemic. For many companies, however, it accelerated. The crisis has allowed a real focus on need. In the new environment, supply chain management has become essential.
What has happened since March has made it possible to learn and realize that it is necessary to make supply chains simpler. The customer is more empowered than ever and has access to a greater diversity of channels.
This is also why there is a need to design a supply chain that is a real strategic asset for the company. There are examples of companies like Ikea and Zara that have already done this, or Amazon itself, which saw that it was time for the logistics business to make a difference and gain a strategic advantage.
The complexity of the environment has forced collaboration, both vertical and horizontal, which is presented as a fundamental tool in the supply chains of the future. Value has been placed not only on supply chain management but also on the work of carriers.
In reference to just-in-time, there are many duties in relation to the supply of demand and the optimization of inventories: not playing everything on one card at the supplier level, giving priority to alternatives with shorter supply lead times and having contingency plans can be good strategies.
Why Companies are Stepping Up
Fortunately, technology companies continue to develop solutions to solve these challenges, providing their managers with never-before-available tools that translate into data to improve end-to-end visibility.
According to the most recent studies, the supply chain of the not-so-future breaks from the previous model because of its emphasis on three attributes:
- It’s demand-driven.
- It’s data-driven.
- It relies on integration.
Visibility is one of the key elements of this new supply chain configuration. Visibility over processes and operations comes from data, obtained in real-time and coming from objects, not only from people, to increase the flexibility of the network, improve its connectivity and allow optimizing follow-up actions that minimize risk and take better advantage of opportunities.
According to a PwC survey, the supply chain is seen as a strategic asset for 45% of the participants in the study, who consider that maximizing its flexibility and adapting its configuration to the new canons is imperative. Among the most important results of the study we find:
Companies that recognize the supply chain as a strategic asset achieve 70% higher performance levels than those that do not share this view.
Leaders focus on delivery, cost, and flexibility to meet increasingly demanding customer needs. Uniformity is on the decline and has been replaced by customization. Supply chains need to be tailored to the needs of different customer segments.
The trend is to outsource production and delivery while retaining overall control of core strategic functions. Investments by leaders in mature and emerging markets are focused on differentiating supply chain capabilities. In turn, this reflects a growing interest in new technologies in tandem with the quest for sustainability.
U.S. Cotton Trust Protocol Takes Action
In a bid to overpower vague supplier networks with little data offerings, the standard owner of the U.S. Cotton Trust Protocol has joined forces with TextileGenesis to form the Protocol Consumption Management Solution (PCMS).
The solution aims to target fiber-forward traceability within the Trust Protocol’s data collection. Establishing in 2020, the U.S. Cotton Trust Protocol is a standard for industry-wide cotton sustainability and was established to encourage farmers to strive for efficient use of water, land, carbon, and energy.