SUPPLY CHAIN IN EMERGING MARKETS: HOW ISIMPLAN AND DDMRP CAN BE USED TO IMPROVE VISIBILITY ACROSS YOUR SUPPLY CHAIN

Since the early 1990s, when the concept of supply chain visibility was introduced as Supply Chain Event Management [1], the need for end to end supply chain visibility has been rising on the list of top supply chain improvements which organisations need to address. This is highlighted by a recent GEODIS survey which showed that improved supply chain visibility is considered the third most important strategic objective for organisations to achieve, up from sixth two years previously [2], [3]. This is particularly true in emerging markets, where modes of transport vary drastically, access to some geographic locations is limited at best, and resources are limited [4], gaining visibility across the supply chain is a challenge [5]. Supply chain visibility, also known as supply chain transparency, can be defined as the ability of an organisation to access data about any part of their supply chain (from production suppliers to customers) in real time [6]. The ability to have sight of all aspects of the supply chain provides businesses with the building blocks for increasing their agility, and ultimately can lead to massive inventory reductions without reduction in customer service [7]. Other benefits of increased supply chain visibility include [6]:

• Enhanced end-to-end business process efficiency
• Visibility to supply chain “blind spots”
• Real-time visibility to customer requirements
• Enhanced customer responsiveness
• Superior handling and execution
• Decreased material and labour costs
• Better inventory management
• Improved business metric monitoring and outcomes
• Optimized logistics and transportation efficiency

The concept of supply chain visibility may seem straightforward, however with increasingly complex supply chains, and a shift to customer centric business plans [8], the attainment of this utopian goal is proving a more daunting task than ever. In emerging markets this task is made even more challenging due to the uniqueness of every region[9].  Piotrowicz and Cuthbertson have identified a number of barriers to supply chain visibility in emerging markets [10], as listed below:

• Limited transport and logistics infrastructure which can be of poor quality where existant.
• Lack of supply chain structure resulting from a fragmented supply chain and narrow supply base.
• Shortage of basic skills and/or knowledge specifically related to supply chain and logistics. This is often exacerbated by a lack of resources to address the skills gap.
• Poor strategic supply chain planning.

Many organisations are focused on creating visibility across their entire supply chain, however only 6% of organisations recently surveyed have achieved this [2]. This low success rate highlights the difficulty of creating end to end supply chain visibility, but also shows that it is not impossible. While supply chain visibility is of high strategic importance, organisations need to understand that visibility alone is not the ‘magic bullet’ to efficient, responsive supply chains. This is doubly true in emerging markets where access to resources needed to achieve full visibility are limited [4], [10]. In order to fully leverage the benefits of supply chain visibility, it needs to be combined with a move toward demand driven supply chain management  [11], [12]. For organisations in emerging markets to overcome the barriers to supply chain visibility and take advantage of the benefits of improvements in this key area, it is imperative that they take a proactive approach to strategically planning their supply chains. A well-structured plan for the implementation of software that can provide visibility to demand and supply data is the first step in ensuring that organisations are able to improve their supply chains. This will allow them to ‘know sooner and act now’ [13]. A number of technologies exist which address both the need for increased supply chain visibility and the need to be able to respond to actual demand and supply fluctuations in real time [14]–[16], many of which have incorporated the increasingly popular Demand Driven Material Requirements Planning (DDMRP) methodology developed by Carol Ptak and Chad Smith [17], [18]. iSimPlan is one such technology and has the added benefit of being developed in the emerging African market, for the emerging African market. iSimPlan is the first Driven Institute Compliant DDMRP software developed in Africa, with a specific focus on assisting organisations in emerging markets to overcome barriers to supply chain visibility while moving towards a demand driven supply chain and delivering a world class product. iSimPlan provides visibility to all buffered items within and organisations’ supply chain, as well as any demand and supply data linked to that item, in as much detail as an executive or planner could want, from high level overviews, to document level detail. An added benefit to organisations based in Africa is that iSimPlan support and training staff are close at hand when needed. This is enhanced by the coaching and change management training that come as a prerequisite to any implementation. These features provide organisations with a competitive advantage that will allow them not only to grow, but to thrive in any market.  

Would you like to improve your supply chains’ visibility while simultaneously improving its responsiveness?

 

Contact us to find out more about a Proof of Concept trial for your organisation.

 

References

[1]         Ortec, ‘Supply Chain Visibility’. [Online]. Available: https://ortec.com/dictionary/supply-chain-visibility/. [Accessed: 08-Oct-2018].

[2]         GEODIS, ‘SUPPLY CHAIN WORLDWIDE SURVEY’, 2017.

[3]         N. Privett and D. Gonsalvez, ‘The top ten global health supply chain issues: Perspectives from the field’, Oper. Res. Heal. Care, vol. 3, no. 4, pp. 226–230, 2014.

[4]         T. Nieuwoudt, ‘Supply Chain Challenges in Emerging Markets : Key Issues in Logistics & Supply Chain’, Strategic Marketing Africa, pp. 32–36, 2015.

[5]         T. Nieuwoudt, ‘The urgent need for greater supply chain visibility in Africa’, Strategic Marketing Africa, pp. 24–25, 2016.

[6]         Techopedia, ‘Supply Chain Visibility (SCV)’, Techopedia. [Online]. Available: https://www.techopedia.com/definition/14021/supply-chain-visibility-scv. [Accessed: 08-Oct-2018].

[7]         N. Shmuel, ‘From zero visibility to night vision at Shamir Optical – Global’, Supply Chain Quartely, 2017.

[8]         Barloworld Logistics, ‘Embracing change for a sustainable future’, pp. 1–88, 2015.

[9]         A. Avasthy, D. Ashutosh, Y. Malik, and J. Weydringer, ‘Winning supply chain strategies for African markets’, CSCMP’s Supply Chain Quarterly, 2015. [Online]. Available: http://www.supplychainquarterly.com/topics/Strategy/20150331-winning-supply-chain-strategies-for-african-markets/. [Accessed: 03-Sep-2018].

[10]      W. Piotrowicz and R. Cuthbertson, Supply Chain Design and Management for Emerging Markets. 2015.

[11]      B. D. Williams, J. Roh, T. Tokar, and M. Swink, ‘Leveraging Supply Chain Visibility for Responsiveness: The Moderating Role of Internal Integration’, J. Oper. Manag., vol. 31, no. 7–8, pp. 543–554, 2013.

[12]      T. Weiner, ‘Supply Chain Visibility’, 2014. [Online]. Available: http://www.mepsupplychain.org/supply-chain-visibility/. [Accessed: 08-Oct-2018].

[13]      Aberdeen Group, ‘Supply Chain Visibility: Know Sooner, Act Now.’, 2016.

[14]      M. Christopher, Logistics and supply chain management, 4th ed. Pearson Education Limited, 2012.

[15]      M. Mitchell, M. Bourdé, K. Butner, and C. Hawker, ‘Transforming your supply chain to on demand: Competitive advantage or competitive necessity?’, p. 51, 2003.

[16]      J. Budd, C. Knizek, and B. Tevelson, ‘The Demand-Driven Supply Chain; Making It Work and Delivering Results’, 2012.

[17]      C. Ptak and C. Smith, Demand Driven Materials Requirements Planning (DDMRP). Industrial Press, Inc., 2016.

[18]      R. Miclo, F. Fontanili, M. Lauras, J. Lamothe, and B. Milian, ‘An empirical comparison of MRPII and Demand-Driven MRP’, IFAC-PapersOnLine, vol. 49, no. 12, pp. 1725–1730, 2016.