Seeing beyond WMS

Bob Trebilcock, Editor-at-Large -- Modern Materials Handling, 11/10/2004

Like voice technology, supply chain visibility/event management is another technology that has been around for nearly a decade but is just now coming into its own.

“Some critical things have changed in the last few years,” explains Beth Enslow, vice president, enterprise research, Aberdeen Group (617-723-7890). “The most important is that visibility has evolved from a stand-alone application into a feature that’s been embedded into a lot of technologies already being used by companies, like warehouse and transportation management, ERP (enterprise resource planning), and supply chain planning.”

There has been another important change. Originally, visibility and event management were two distinct software packages. Visibility provided companies a view into the status of their inventory, orders and shipments. That view might have been internal, or external, like checking on the status of an order being shipped by UPS.

Visibility was passive. It required a user to seek out that information. Event management, on the other hand, pushed that information out there to the user through alerts.

Today, the two have merged. “You rarely find visibility without some kind of event management and alerting capability tied in,” says Enslow.

Instead, the real distinction is whether a company uses these applications internally to monitor their inventory levels or their productivity on the warehouse floor during a shift. Or, whether a company uses these applications externally, to monitor the events in the supply chain.

“One of the things we found is that managers spend nearly 40% of their time fighting fires because of supply problems,” Enslow says. “With event management, you can monitor events at the supplier, like whether raw material needed for your order has arrived; whether production occurred as expected; or whether your order is in-transit.”

One of the reasons visibility has been slow to take off until recently, Enslow says, is that a company has to change its processes to be exception focused to really see benefits from these applications. “It calls for a pro-active mindset, and that’s a big change,” she says.

But for those companies that make the transition, the benefits are measurable and real. “Companies that are great at event monitoring are two to three times as likely as their peers to achieve extreme supply chain performance improvements,” says Enslow. “That is, they are achieving greater than 40% improvements in lead times, perfect orders, and data error reductions.”

Those are improvements that anyone can see.