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Dude, Where's My Product? How to Keep Track of Your Global Supply Chain

As manufacturers extend their supply chains to remote areas of the world in the search for lower costs, knowing the whereabouts, or location, of the goods in production and in the pipeline are more important than ever. For example, domestic products may move door-to-door in 5 days, while 35 is the norm from coastal China.

But lower-cost areas of inland China now require 45 to 60 days to deliver goods, due to the lack of sufficient infrastructure to rapidly move product from the factory to the ports.

All of which is leading manufacturers to ask themselves, "Where's my product?"

Global Supply Chain Essentials
Help can be found in two subcategories of the supply chain management (SCM) applications market: inventory optimization and supply-chain network design programs. According to the Supply Chain Management Market Sizing Report, 2006-2011 from AMR Research, these segments are exploding at rates of 32 percent and 29 percent, respectively, far above the 5 percent increase now seen in the overall SCM market.

The reasons are clear: Inventory optimization reduces overall inventory while maintaining high customer service, improving working capital, and reducing risk, AMR says. Similarly, network design applications help manufacturers analyze network and logistics flows, optimize sourcing decisions, simulate network dynamics, and analyze network risk. These capabilities are essential for global supply network success.

Real-time visibility into global sources reduces the risk of oversupplies when demand levels change. "Pumping two to three months of supply into the product flow is a very expensive commitment on the manufacturer's side," says Stephen Slade, senior director for Oracle's Applications and Industries Marketing Group. "Suppose there's a manufacturing change involved and these parts are already built--who pays for the replacement or returned parts?"

Real-Time Logistics
When evaluating IT solutions, manufacturers should look for those that provide material and product logistics information in real time. "As parts move along the production process, their status should be reported and recorded in real time and forwarded to the recipients down the line," Slade explains.

"Workflow engines should conduct exception notification and send alerts when shipments are early or late. Then, operational planners and logistics personnel have a dynamic plan that includes changes in product shipments, so they can react accordingly," he adds.

Go with the Flow
Manufacturers should also look for SCM technology that allows the entire supply chain, from producer to consumer, to participate in the product flow cycle. Then, as priorities change, partners can refine materials flows.

"Tracking hundreds, thousands, or millions of SKUs and delivery destination point combinations can not be done manually," Slade points out. "Only a fully integrated technology, middleware, and applications package can offer the results global enterprises need to stay competitive in today's rapidly changing world."