According to Aberdeen almost two-thirds of companies use some sort of global supply chain visibility technology, though many of these systems provide just simple ?where is my shipment? status information and often are homegrown or department based. However, commercial software is making inroads.

Nearly a third of firms report using commercial software, which often includes order line-level tracking, event management, and analysis functionality. Many companies are using multiple technologies, which leads to disparate information sources that are more timeconsuming to use and more challenging to do reporting and analysis against. Nearly a third of firms use a commercial transportation management system for domestic shipment tracking, and 17% use a commercial supply chain visibility system. More than half use their transportation carriers? online tracking systems, and more than a quarter use their third-party logistics provider?s visibility solution. In addition, 44% of companies report using spreadsheets as part of the way they track domestic shipments.

?Companies planning on building robust visibility systems internally should think twice, as the upfront costs can be huge,? warns a vice president of supply chain who attempted an in-house development project. ?If you use an on-demand commercial system, your upfront costs are much lower. Moreover, if the system doesn?t work as expected or your people don?t use it that much, then you have a much easier exit strategy.?

Key Questions to Ask When Evaluating Vendors
Following are 25 questions and decision factors to consider when selecting a visibility solution.
1. On-demand (software as a service) or installed on-premise system?
2. International or domestic focused? Shipment and/or manufacturing process focused?
3. Pre-existing connections to your suppliers, transportation carriers, or freight forwarders?
4. Trading partner enablement program to help connect and train trading partners regardless of their IT sophistication (e.g., EDI, XML, RFID, Web form, fax, phone)?
5. The cost of connectivity and any economies of scale that the technology vendor brings based on its business?
6. Data quality diagnostic tools and data quality monitoring and improvement support?
7. Order line-level tracking?
8. Tracking and reporting by the data keys that your users want (e.g., purchase order number, container number, SKU, promotional code, supplier location, warehouse location)?
9. Ease of configuring role-based dashboards and views (e.g., for merchandisers/purchasing managers, warehouse managers, inbound transportation managers)?
10. Pre-existing reports provided with the system? Ease of business users modifying report templates for their own needs? Ease of business users configuring ad hoc reports? Which specific data fields can reporting be done off?
11. Alerts off of event data that does not meet milestones or other criteria (e.g., quantity on the advance shipment notice (ASN) does not meet the quantity specified on the purchase order) and alerts off of missing data (e.g., did not receive an ASN on the date expected)?
12. Escalation policies and workflow?
13. Resolution workflow and logistics process management features (e.g., system configured to trigger a transshipment order in the ERP)?
14. Ability for users to make changes to system data (e.g., update shipment status information or submit new instructions for deconsolidator)?
15. Ability for users to add comments on resolution actions, special conditions or events, etc.?
16. At-rest and in-transit inventory monitoring capabilities and ability to ?forward predict? inventory positions, say, 10 days forward based on current event information and milestone plans?
17. Ability to monitor supplier pre-shipment activities such as raw material procurement, cut/sew/dye process steps, etc.?
18. Ability to track containers that have a separate itinerary from their content (e.g., for reverse logistics processes, monitoring of detention, demurrage)?
19. Ability to track and monitor costs as orders progress? Cost allocation to SKU level? Other supply chain costing capabilities?
20. On-ground country support (e.g., in Asia) and services for trading partner enablement or process monitoring, management, and resolution?
21. Pre-configured scorecards for suppliers, carriers, etc., that are easily modifiable?
22. Ability to calculate data such as average lead time by lane or lane segment, lead time variability, dock turnaround times, perfect order metrics and other performance metrics?
23. Analytics and visualizations to identify supply chain bottlenecks, process variability, and improvement opportunities?
24. Document and label preparation and printing support (e.g., packing list, commercial invoice)?
25. Logistics execution support ? appointment scheduling, booking, reallocation/redirection of goods in-transit, revised instructions to deconsolidator, etc.?

Top Traps for Visibility
When implementing visibility systems, companies often fall into some common traps. Based on Aberdeen research into visibility system deployments, here?s what to keep in mind:

Trap #1: Defining the Grand, Perfect Strategy
Visibility is an on-going journey that requires new organizational skills and many midcourse adjustments as trading partners and business strategies evolve. Too many companies spend years talking about how to gain better visibility but never pull the switch on taking action. Instead, identify smaller, simpler to digest projects and get started now. Don?t expect other departments to be supporters of the initiative out of the gate. Getting our merchants on board was challenging,? says a retail vice president. Clearly articulate the value for each role in the organization before, during, and after the rollout via a continuous marketing and education “initiative. ?We had our purchasing managers, IT department, and logistics group involved in the process of selecting our visibility vendor,? reports a high-tech executive. ?To gain buy in, we made it a collective decision.?

Trap #2: Turning on Too Many Alerts and Status Milestones in the Initial Rollout
Instead, start with the smallest set of event data possible that will still drive value. ?Keep it simple,? advises a retail director of corporate transportation and logistics. ?The more complicated it is, the more open to data errors it will be.? Some companies, for instance, start with receiving status messages from their freight forwarders and then work to hook up smaller carriers and the supplier community in later stages. Many companies that gain the most value from visibility solutions work hard to minimize the number of e-mail alerts used in order to prevent alert overload, which can drive staff away from using the system. Instead, they become masters at using exception reports and on-line task sheets to manage activity. For instance, a user may configure the system to deliver a daily report of orders in which the advance shipment notice does not match the purchase order line-item quantities or a report that identifies containers approaching the end of their free storage time at a deconsolidator. In general, small and midsize companies find they can effectively use exception alerts, while large organizations with huge shipping volumes find they work more productively by using exception reports.

Trap #3: Failing to Focus on Data Quality
Companies that don?t spend sufficient time and resources on data quality will find that users will not be able to find statuses in the visibility system for many of the orders they wish to track or will see data that is incomplete or makes no sense. This is the quickest way of derailing a visibility project as users will revert to previous methods, such as calling the logistics group or tracking by spreadsheets. Set up processes to monitor data quality from each trading partner connected, measuring timeliness, completeness, and accuracy of data. Expect the quality of data to be poor at first: Many companies report data quality of 50% from their trading partners when they first bring up a visibility system; by identifying issues and collaboratively working to resolve them, this level can be brought up into the 90+% range in a few months. You may also need to build cross-reference tables to avoid receiving large amounts of ?orphan? status data that cannot be linked to specific shipments, orders, etc. Some vendors provide trading partner enablement and data quality monitoring technology and services that can greatly assist in making the visibility data accurate and usable. Ensure that data quality becomes part of the scorecarding and selection process for your trading partners and logistics. Configure the visibility system so it will automatically monitor the date completeness, timeliness, and (for key data fields) accuracy from each trading partner. Make inputting status information (via EDI, XML, or web form) a requirement for suppliers and carriers to do business with your organization. Some companies apply penalties for noncompliance, such as a $50 invoice deduction for each day a document is late.

Trap #4: Expecting a Visibility System to Reduce Lead Times and Inventory Levels Automatically
Using a visibility system to track and alert against shipments will help improve customer service capabilities and on-time delivery performance, as well as help distribution centers, retail operations, and manufacturing facilities better plan workload. However, using a visibility system to make lasting, structural improvements to the supply chain requires analytical discipline. Companies achieving the highest value from visibility technology apply statistical process control and Six Sigma analysis methods to identify recurring points of variability and delays, research their underlying causes, and take corrective action. Actions can include changing the routing of goods to avoid bottlenecks, closer collaboration with a supplier or logistics partner to prevent recurring problems, or changing inventory policies. This will result in continual improvements in lead times and process reliability. For instance, a European pharmaceutical company that was able to reduce inventory by $55 million in its first year of running a global visibility system through resetting its lead times found that disciplined analysis of its visibility data in its second year let it take additional days of lead time out here and there across its supply chain, resulting in an additional $45 million in inventory savings. One quick opportunity area is to use visibility data to measure actual lead times across your network and update your inventory and customer service system with these times. Many companies find that their systems contain ?worst case? lead times rather than accurate lead time averages. Updating the lead time values can result in quick reductions in safety stock levels, the ability to shorten order promise dates for customers, and the ability to better schedule when to drop sales orders from your ERP system to your warehouse system. One consumer goods company, for instance, found that inaccurate lead time data in its SAP system was causing some orders to be delivered five days early, while others were being delivered 20 days late.

Trap #5: Failing to Leverage New Advances in Service-oriented Architecture and Portals
Companies considering improving their visibility capabilities need to educate themselves on service-oriented architectures, Web services, and portal technology. Supply chain visibility solutions can leverage these advances in three primary ways:

? Easier data integration. Web services and service-oriented architectures make it easier to pull information from your enterprise?s legacy systems and access data from transportation carrier, freight forwarder, and third-party logistics provider systems.
? Easier information access. An increasing number of visibility systems come with portal tools that can be used to create role-based views, such as a different dashboard for a warehouse manager versus a purchasing manager or merchandiser. Best-in-class visibility adopters report using these capabilities to provide visibility information to hundreds of users across a company. In addition, Web services can help integrate status information and query capabilities into other enterprise applications, such as systems for customer
relationship managers. This minimizes training requirements and improves productivity by letting users access visibility information while remaining in their primary enterprise system. Disciplined analysis of its visibility data led to an additional $45 million in inventory savings.

? Composite workflows. Service-oriented architectures support the construction of composite workflows that can span multiple applications. For instance, the visibility system can orchestrate the resolution of shipment delays by triggering an expediting action in a transportation system or a transshipment order in an ERP system. Companies seeking to use visibility technology to drive process management, process consistency,
and process automation should evaluate how service-oriented architectures and toolsets can support this advanced functionality.

Source: Aberdeen Group

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