Visibility in today’s logistics is an issue on the agenda of every supply chain manager. The awareness of the importance and future relevance of the subject is given, but the approach still turns out to be a complex project in reality. As part of our supply chain visibility blog post series, the following use case is intended to illustrate a practical approach and specificity of supply chain visibility with the value it brings to logistics.
Track and trace of shipments
Supply Chain Visibility (SCV) provides shippers and merchants with an overview of the physical location and condition of their goods so they can quickly respond to irregularities. In standardized supply chains with diverse goods it is often assumed that an increase in visibility does not significantly improve the logistic processes. But the value of real-time visibility data in terms of track, trace and condition is evident when shipments suffer damages and losses without documentations and responsibilities.
It wasn’t me…
… is the answer that a major distributor of luxury goods often hears when it asks its LSPs and business partners about the cause of damages of its shipped goods. The fictive online mail order retailer NobleLifeEurope (NLE) in our use case sells luxury articles in the textile, accessories and household sectors and sends them throughout Europe to its customers from its headquarters in Germany. NLE cooperates with several LSPs and distribution warehouses, which in turn carry out transports and deliveries with their subcontractors and service providers. In the past year, there has been a growing number of complaints from customers that products were damaged or defective on arrival. In its research into the cause and responsibility of the damages, NLE encountered major inconsistencies. Although there were documentations on the transition of goods and responsibility at the interfaces in the supply chain, these were sometimes hardly resilient due to incorrect and incompletely filled forms, untraceable documents or illegible records. The review of documents took an extremely long time, as no digital archiving had taken place. Added to this was the refusal of many LSPs to be held liable for damages, as they said that the damage could not have happened in their responsibility. Many customers complained to NLE that it would take too long to process their claims and to compensate for the goods.
Quality management and supply chain visibility go hand in hand
In order to identify and eliminate the cause of the increased damage, NLE wants to improve its quality management with the help of visibility. In addition, it wants to improve the service to its customers and speed up the damage handling process in case of damages. For this purpose, NLE uses a visibility provider in the form of a collaboration platform. On this collaboration platform, the LSPs have ready-made quality documents available, which must be completed and signed online in the event of a transfer of goods and responsibility by both parties. The signed document is then available in real time on the online portal for all parties involved including the mail order company. Thus, NLE has a digital, continuous and transparent quality management at its disposal. In addition, NLE decided to provide shipments with a value of more than €100 with smart sensors in IoT devices. On these sensors, parameters can be individually programmed to be measured by the sensors. This data is also uploaded to the portal in real time and is available to NLE for inspection and evaluation. In a first step, NLE had vibrations and tremor programmed as a value to be measured. NLE can thus track severe shocks to its shipments and directly alert the responsible service providers regarding causes and proactive improvements in the process and also track these retrospectively.
Individual approach to visibility
With its visibility application and quality management collaboration the fictive company NobleLifeEurope was able to decrease the occurring damages by over 50% during the next couple of months. Through the close cooperation and communication with its business partners critical points of the supply chain could be detected and improved proactively. Also, the tight communication with all parties strengthened the partnerships. The damage handling could be sped up and thereby the service to the customer was improved. NobleLifeEurope will now extend the measured parameters of the smart sensors to temperature, humidity and pressure. Thereby each shipment can be equipped with a sensor individually customized to its product.
At this point we would like to highlight again, that our example company NobleLifeEurope is fictive to protect confidential client information but it is based on real companies.
Gaps in transparency defect every supply chain. Some will do so in the daily business, some in exceptional situations, some might have only a small impact at the beginning, some cause high financial losses. This above described example shows that data and information at decision-relevant points in the supply chain have long since ceased to be only a nice-to-have. Nowadays they are the basis of control and management. The wide range of technical implementation options of SCV allows companies to test and expand applications piece by piece and to realize improvements in a wide range of areas of their business.