GLOBALIZATION & VISIBILITY
Companies have widely differing interpretations
Views on supply chain visibility
There is a growing need for supply chain visibility, but in what form? Do companies need visibility of the inbound, outbound and/or internal supply chain? And who has full end-to-end supply chain visibility extending beyond their tier one suppliers? Husqvarna, Henkel and Alpro share their insights in this article.
By Marcel te Lindert
chains. Trends such as globalization and e-commerce have significantly increased complexity and unpredictability, and sup- ply chains have lost all their buffers as a result of the financial crisis. That has cre- ated major challenges, especially in com- bination with the growing international tension caused by the new trade barri- ers imposed by the likes of the USA and China and the currency devaluation in emerging economies such as Turkey and Argentina. How can we prevent an inci- dent in one link in the chain affecting the whole process? The answer: visibility. Visibility is one of the most commonly used words in a supply chain context, but the precise interpretation of visibil- ity differs from one company to another. Whereas one company might invest in visibility for its inbound supply chain, another might focus on the outbound supply chain – and many organizations are still struggling to gain visibility of the internal supply chain. In fact, companies
T
he demise of the Lehman Broth- ers financial institution has funda- mentally changed the face of supply
like Unilever use three different control towers: one for each part of the supply chain.
Another difference relates to the level of visibility. Some companies are look- ing for visibility at the operational level (where are my goods?), others at tactical level (what is the customer demand?) and others at strategic level (how finan- cially robust are my suppliers?). But who has full end-to-end supply chain visibility – from the production of raw materials to the usage by consumers – at operational, tactical and strategic level?
Weather and climate
Husqvarna’s need for visibility is pri- marily focused on the strong seasonal nature of its business activities. The international company, headquartered in Sweden, manufactures and distributes products including forestry and horticul- tural equipment, irrigation products and building tools. Around 70% of its sales activities are concentrated in the first half of the year, when professionals and gardening enthusiasts invest in a new
Husqvarna lawnmower and consumers decide they need a Gardena sprinkler system. “This peak is different from the retail peak that occurs around the time of Black Friday or Christmas,” says Valentin Dahlhaus, Senior Vice President Group Operations at Husqvarna. “The exact timing and size of our peak depends mainly on the weather and climate. Our need for visibility is primarily focused on questions such as: what is the customer demand, where will it occur, what is the product offering and which inefficiencies are preventing us from achieving high service levels and high inventory turno- ver rates?”
Over recent years, the need for visibility has increased considerably in line with the growing number of sales chan- nels and the individualization trend; gardening enthusiasts and profession- als are demanding products that meet their specific needs. “The online chan- nel has grown significantly, particularly in North America and Europe. This has led to much more production in smaller batches, such as 15,000 products instead
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SUPPLY CHAIN MOVEMENT, No.31, Q4 2018
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