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A General Model of Supply Chain Visibility
By: Jonah McIntire www.supply-chain-visibility.com
Business Leaders Expect Visibility to be Impactful
• The 2009 Supply Chain Officer’s study by IBM shows that Supply Chain
Visibility is the top concern, but not the top priority, for SCOs…
• Gartner identified six major competencies to focus on within supply chain
execution, of which four (Global Trade Management, Inbound
Logistics, Flow Management, and Labor Management) require
decision making supported by SC visibility…
• An AMR study in 2008 showed visibility as the most strategically important
technology investment for supply chains with revenue over $1
Billion USD
• A 2008 academic study in Sweden showed an empirical improvement of
~3% in ROA for 14 companies completing a visibility initiative
By: Jonah McIntire www.supply-chain-visibility.com
Let’s spend 30 minutes on the
following…
1. Defining visibility as a process
2. A general supply chain visibility model
3. A visibility effectiveness Model
By: Jonah McIntire www.supply-chain-visibility.com
Technology… Business Goal…
• Is purchasable… • Defines a final, desirable state
• Is subject to technology cycles • Has inherent value
•Concerned with upgrade paths and • Can be achieved and lost
interoperability, etc…
What is supply chain visibility??
Strategy… Process…
• Provides guiding principles for how • Renders inputs into outputs by
to use resources doing work
• Is difficult to evaluate independent • Can be measured both as a black-
of its implementation box, and by sub-processes
By: Jonah McIntire www.supply-chain-visibility.com
The Need for a Visibility Effectiveness Framework
Total Supply Chain Effectiveness
Cost Service
Agility Resilience Reliability Responsiveness
The Black Box of Visibility
Processes
By: Jonah McIntire www.supply-chain-visibility.com
Supply Chain Visibility Processes
Interconnect Extract into Interrupt
Capture Data
Data Intelligence Decisions
Information
Materials The Black Box of Visibility
Processes
Total Supply Chain
Capital Effectiveness
By: Jonah McIntire www.supply-chain-visibility.com
Materials… Supply Chain Visibility Processes
Capital…
Capture
• Cases, Data Interconnect
Capture Items, Pallets, etc
Interrupt
Extract into payable / receivable
• Accounts
Data Intelligence Decisions
Data
• Aggregates of weight, counts • Past payments
• Cost of capital
Information…
Information • Summary data
• Sales levels
• Sustained markup
Materials The Black Box of Visibility
Processes • Conceptual objects
• Forecasts Total Supply Chain
Capital Effectiveness
• Purchasing Agreements
• Maximum Capacity
By: Jonah McIntire www.supply-chain-visibility.com
Why Use a General Visibility Model?
Interconnect Extract into Interrupt
Capture Data
Data Intelligence Decisions
Scoping… Performance…
• Who is the stakeholder list? • Enables decoupling successful
Departments, locations, staff? from unsuccessful processes
• Where does visibility end and • Enables measuring the visibility
begin, what systems or tasks are initiative below total impact
involved?
• Enable cross-organization
benchmarking and best-practices
By: Jonah McIntire www.supply-chain-visibility.com
Tier 1 Supply Chain Visibility Processes
Interconnect Extract into Interrupt
Capture Data
Data Intelligence Decisions
Tier 1 Supply Chain Visibility Effectiveness
Sensitivity Accessibility Intelligence Decision
The capacity to The capacity to The capacity to Interruption
capture data as it relevantly extract data in The capacity to
appears in the interconnect data ways which interrupt decisions so
supply chain and prepare for identify high- that different, and
its later usage value data and better, outcomes
relationships emerge
By: Jonah McIntire www.supply-chain-visibility.com
A General Model of Visibility Effectiveness
Tier 1 Visibility
Effectiveness Metrics
Supply Chain Visibility Effectiveness
Decision
ROA Sensitivity Accessibility Intelligence
Interruption
Assets
Revenue The Cost-Benefit Space for Visibility Metrics
Expense
Tier 2 ROA Metrics
By: Jonah McIntire www.supply-chain-visibility.com
Visibility Effectiveness: Draft Tier 2 Metrics
Supply Chain Visibility Effectiveness
Decision
ROA Sensitivity Accessibility Intelligence
Interruption
Draft Tier 2 Metrics: Qualitative Examples:
• Sensory Completeness • DC Manager “-We don’t see inbound
• Sensory Redundancy deliveries except from specific suppliers…”
• Sensory Accuracy / Bias • Buyer “My POs don’t show as “in-transit”
• Sensory Depth of Detail until a week after they ship…”
• Sensory Timeliness • Accountant “Every quarter get’s closed
improperly because we don’t know about
goods delivered FOB on the last few days”
• Stores Staff “The shipment has an ETA,
but it is always 2-3 days earlier than actual
delivery”
By: Jonah McIntire www.supply-chain-visibility.com
Visibility Effectiveness: Draft Tier 2 Metrics
Supply Chain Visibility Effectiveness
Decision
ROA Sensitivity Accessibility Intelligence
Interruption
Draft Tier 2 Metrics: Qualitative Examples:
• Ease of Access / Use • DC Manager “We only have one super-user
• Universality of Object Definitions who can track & trace well”
• Longevity • Buyer “I can track WIP by PO#, but after the
factory I have to use container #s, BOL #s, case
#s, etc”
• Accountant “Shipments from 2008 have
actual freight cost, but 2009 records only show
the assumed PO freight factor… cross-year
comparisons are impossible”
• Stores Staff “I can’t lookup all shipments to
my store at once, I have to look for Warehouse
shipments first and then store-to-store
transfers next”
By: Jonah McIntire www.supply-chain-visibility.com
Visibility Effectiveness: Draft Tier 2 Metrics
Supply Chain Visibility Effectiveness
Decision
ROA Sensitivity Accessibility Intelligence
Interruption
Draft Tier 2 Metrics: Qualitative Examples:
• Ease of Use • DC Manager “Inbound volume forecasts are
• Analytical Accuracy sent, but only once per month. The system
• Analytical Re-Usability should create a new forecast whenever
• Automation of Analysis something changes”
• Analytical Relevance • Buyer “I think landed cost is rising, but I have
to push large data sets to Excel to calculate
rolling-window metrics”
• Accountant “Landed-Cost is on a weekly
Executive Dashboard, but the calculation
ignores DC bypass shipments”
• Stores Staff “I have to run four separate
reports to calculate when out-of-stock items
will be available again”
By: Jonah McIntire www.supply-chain-visibility.com
Visibility Effectiveness: Draft Tier 2 Metrics
Supply Chain Visibility Effectiveness
Decision
ROA Sensitivity Accessibility Intelligence
Interruption
Draft Tier 2 Metrics: Qualitative Examples:
• Depth of procedural integration • DC Manager “I am sent an automated report
• User satisfaction with the when a store receives a carton as damaged in
decision-procedure, the inventory system; what am I supposed to
including the point of do with this alert?”
interruption… • Buyer “It would take a lot of time and effort
• Transparency to how the visibility to always consider chargeback trends when
intelligence is affecting or issuing new POs, so I only review them before
should effect the seasonal POs”
decision making process • Accountant “I run a report on all charge-
backs that are pending, and then have to email
each supplier-buyer pair individually. It would
be better if the alerts were system-generated
directly to the relevant parties”
By: Jonah McIntire www.supply-chain-visibility.com
Visibility Effectiveness: Draft Tier 2 Metrics
Supply Chain Visibility Effectiveness
Decision
ROA Sensitivity Accessibility Intelligence
Interruption
Net Sales
- Net Profit
Total Cost
÷ Net Margin
Net Sales
X Return on
Assets
Net Sales
Total Asset
÷
Ave Current
Assets Turnover
+ Total Assets
Ave Fixed
Assets
By: Jonah McIntire www.supply-chain-visibility.com
General Model of Visibility
General Model of Visibility Effectiveness
Sensitivity
Information Accessibility Intelligence Decision
The capacity to The capacity to The capacity to Interruption
capture data as it relevantly extract data in The capacity to
Materials in the
appears interconnect data ways which
The Black Box of Visibility interrupt decisions so
supply chain and prepare Processesidentify high-
for that different, and
its later usage value data and better, outcomes
Total Supply Chain
Capital relationships emerge
Effectiveness
By: Jonah McIntire www.supply-chain-visibility.com
Example Visibility Effectiveness Scorecard
As-Is Option A Option B
ROA
Revenue
Assets
Costs
Sensitivity
Completeness
Consistency
Timeliness
Accessibility
Ease of Use
Ease of Access
Intelligence
Accuracy
Relevancy
Re-Usability
Decision Interruption
Depth of Process Integration
User Trust
User Satisfaction
By: Jonah McIntire www.supply-chain-visibility.com
www.supply-chain-visibility.com
Name Jonah McIntire
Mobile +86-139-176-66237
Email Jonah.mcintire@googlemail.com
