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Supply Chain’s ‘Perfect Storm’ Makes Visibility Even More Crucial

Never have supply chains been more complex. And the industry’s “perfect storm” of challenges has created an unprecedented urgency to monitor everything from shop floor efficiencies and labor practices to shipping logjams and inventory allocation.

“If you can’t measure it, you can’t improve it,” said Paul Magel, president, application solutions group, at software solutions company CGS. “And if you don’t have the visibility, you don’t even know what you’re measuring.”

For manufacturers, shop-floor level efficiency is a critical issue, from machine output to how much employee time is wasted during “off-standard time.” And until problems are spotted and identified, they cannot be corrected. After deploying BlueCherry’s Shop Floor Control solution, however, Sri Lankan manufacturer Star Garment clocked a 90 percent reduction time in non-productive/off-standard time.

Compliance issues are also key. Not knowing what’s happening up and down your supply chain not only costs brands and retailers valuable money and time, but could also land them in hot water with regulatory agencies and consumers demanding ethics transparencies. Companies that partner with “reputable quality manufacturers” only to find work is subcontracted out are particularly at risk. CGS recently added a Contractor Management System that adds visibility into this situation, making sure that any work farmed out complies with all agreed-upon rules.

Even within a fully transparent supply chain, there are still so many moving parts and independent “bubbles” that need to be digitalized and linked for visibility and real-time tracking. It’s all about collecting data, and using it effectively. “Back office is the new black,” Magel said.

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“The future is going to be very much based on logistics and the integration of sustainability,” said Sourcing Journal founder and president Edward Hertzman in discussion with Magel. “A lot of companies’ abilities to be agile and have a more robust supply chain is going to be part of that. It’s going to be the marrying of human capital and technology, if anyone thinks they can do one without the other, I think they’re wrong.”

Visibility particularly comes into play with the increase of brands selling direct to consumer, as they now need to manage their own DTC business and their wholesale business with retailers, and manage inventory flow to both operations.

Brands thinking they can just cash in on DTC retail’s higher margins might face harsh logistic realities if they can’t properly manage both businesses and keep all channels—and customers—happy.

“How can brands make money doing all those things with the [retail] returns and everything else if they don’t have a strong technology backbone?” Magel asks. “That’s the secret source that everybody’s working on today. And the smart ones are investing in technology, sometimes over investing, and trying different things to figure it out.”

As the snow globe that got shook up during the great supply chain disruption hasn’t settled yet, companies still face many unknowns. How much physical space you need for buy online, pick up in store, return in store, ship from store using those distribution centers? How much should brands invest in connections to marketplaces versus connections to their wholesale customers? How do they prioritize those orders?

“We don’t know exactly where everything is going, so we’ve got to be prepared,” Magel said. “But if I don’t have the information and knowledge, and if I don’t have access to information across my entire supply chain, there’s no way I can optimize the inventory.”

Click the image to view the Fireside Chat and learn how CGS can help your company develop better visibility along your entire supply chain.