Track & Trace, Supply Chain Visibility, tracking, GPS, etc. Are businesses confusing these concepts with each other?
1. When it comes to tracking logistics, what do you think about it?
When it comes to tracking in the supply chain, logistics, or transportation industry, probably like me, the first thing that comes to mind is information about the truck’s location, the driver’s location, the goods’ location, etc.
Location tracking has long become a regular thing, not only in logistics but also in life. We are used to tracking Grab drivers, Now deliverymen, or the location of delivery trucks with black boxes. We need as much information as possible and as quickly as possible. Gradually, the concept of Real-time Tracking is no longer strange.
By definition, Track & Trace is precisely the tracking of an asset's location while stationary or moving. Track & Trace contains geolocation, GPS (Global Positioning System), etc.
But Track & Trace is merely location tracking, and it is a smaller part of Supply Chain Visibility.
So, how extensive is Supply Chain Visibility?
2. Is only Track & Trace enough?
Location is still the most important information we need, especially with the logistics industry’s characteristics. But today, in the 2020s, we can track more than that. The concept of Supply Chain Visibility extends much more than just location tracking.
Trucks and conventional location tracking systems can't tell us about the vehicle's fuel level, tank temperature, the number of times the car brakes hard, etc.
Besides the information about the truck is the information about the cargo. With a conventional tracking system, it is impossible to know whether the goods are stored at the right temperature, picked up in sufficient quantity, or remain intact when delivered to the customer.
Finally, after the goods status is the order and recipient status. How can you know if the order has been received successfully or not? Is there anything missing? Has the recipient returned anything, or is he/she satisfied?
3. Real-life examples of Supply Chain Visibility
In fact, many businesses have solved the above questions in their own logistics system.
Grab can use their system to track the vehicles' location, like a delivery van. Grab knows your location and requirements, which means you are the order. Grab knows the timeline when the driver picks you up, i.e., picks up the goods, and when to drop you off, i.e., drops the goods. Finally, Grab knows if you are satisfied with the service through the driver rating system.
In terms of freight transportation, Tiki, Shopee, and Lazada can also do the same thing: track the location of drivers and recipients, track pick and drop timelines, track order status, and finally, satisfaction rating.
4. So, what can you track?
With Supply Chain Visibility, there are two broad categories that you can monitor and manage: Resources and Processes.
Every business owns a large number of resources or assets over time. In logistics, supply chain specifically, resources include warehouses, customers, vehicles, goods, orders, etc.
For each resource, there is a range of data that you can monitor and manage in real-time, such as:
Vehicles: location, cost types, speed, tank temperature, fuel level, etc.
Goods: location, quantity on shelves, quantity in order, quantity in delivery, product characteristics, delivery status, etc.
Orders: order status, the amount collected, order to be re-delivered, etc.
Drivers: working status, driving vehicles, delivery in progress, salary and bonus, KPIs, etc.
And tons of other resources.
Besides resources, processes are an integral part of your management and tracking system. The logistics industry needs to follow the process to ensure time, quality, and safety.
Supply Chain Visibility shows you the entire transportation/warehousing process on your desktop so that you can control and ensure compliance at your fingertips.
For example, if the manufacturer/shipper could not track and control their goods, Supply Chain visibility helps track your delivery of precious goods to the carrier. A manufacturer can track the entire transportation process as follows. The manufacturer creates an order on the system, then uses an optimization algorithm to choose the most efficient carrier for the order. The carrier then receives the order, logs in the system with his account to confirm and deliver it to the driver. The driver uses the mobile application to update the progress on the delivery route, such as pickup, stopover, delivery, and road incident. Shippers can monitor this whole process without calling or sending Zalo messages to check.
5. Three factors to achieve Supply Chain Visibility
When businesses want to achieve visibility or traceability (Supply Chain Visibility) in their supply chain, three critical factors are considered.
The scale of Supply Chain Visibility
Businesses need to clarify what Supply Chain Visibility means to themselves. In many definitions, Visibility can be defined as transparency during transportation. It means tracking when the goods begin to be shipped and recording every route of the goods to the final recipient. On many other levels, the scale of Visibility ranges from supplier to manufacturer and customer.
Another meaning of End-to-End Supply Chain Visibility extends even further than tier 1 suppliers, which is, tracking right from raw materials to finished products.
Clarifying the scale of Supply Chain Visibility has an impact on the amount of data you need, the complexity of the technology, and the collaboration between stakeholders in the supply chain to achieve your goals.
Components of the solution
Managers need to understand that Supply Chain Visibility is often a combination of many different software solutions, except for some circumstances. You need the knowledge and resources to put those solutions together to create valuable data. These include solutions to collect and transform information into digital form, solutions to transmit that information to participants in the supply chain, and analytical solutions to support managers' decision-making.
The right questions
What components do businesses need, and what KPIs should they pay attention to? Visibility often begins with a manager who simply “wanted to know more” about product flow. But such general questions are often difficult to put into practice. The right questions need to target supply chain issues like risk, inventory, transportation, etc.
6. Backlogs of End-to-End Supply Chain Visibility
Supply Chain Visibility is a concept that comes from technology development. Therefore, the software system is the first necessary element.
The fact is that you can track all the information mentioned above if investing in technology. However, currently, in the logistics industry, there is almost no single standard system. You can track location with one system, control orders with one system, and control telematics with one system. An even greater difficulty is that the manufacturer uses one system, the transporter uses one, and the distributor uses another.
This situation leads to communication fragmentation, preventing us from achieving End-to-End Supply Chain Visibility.
The second difficult factor is people. Visibility means transparency. So how to convince people to get out of the traditional way of doing logistics, then train them to use software for work and apply a new, transparent, but more controlled working process.
In the following articles, Abivin will delve into these two people and system issues.
Meanwhile, you can watch the speech of Mr. Pham Nam Long - CEO of Abivin, at the World Knowledge Forum 2020 on how Abivin helps businesses optimize, manage and monitor their supply chain comprehensively.