Guiaindustrial 13 Febero 2016

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Research note

Supply chain visibility: lost in translation?Vernon Francis

Graduate School of Management, University of Dallas, Irving, Texas, USA

AbstractPurpose – The purpose of this paper is to describe miscommunication about the ubiquitous term “supply chain visibility” (SCV), to propose a prdenition for it and identify its salient characteristics.Design/methodology/approach – A literature search was conducted to describe the widespread use of the term SCV and the miscommunication toccurs surrounding its use. The proposed denition and the salient characteristics of SCV are original conceptual contributions.Findings – The study nds that the term SCV is widely used in the supply chain management and logistics communities Many vendors, third plogistics providers, transportation and other companies profess to have or provide it, yet SCV remains one of the top issues consistently mentionsurveys of supply chain management professionals. This occurs in part because of the confusion surrounding its meaning.Research limitations/implications – Usage of the term SCV is ubiquitous and a complete review of all sources is not possible, revealing o348,000 sources from internet and academic database searches. Only selected, key results are from these sources are reported. The proposed denifor and characterization of SCV are the author’s conceptual contributions, open to discussion and debate.Practical implications – A precise denition of SCV along with its important attributes helps to promote consistent understanding, interpretation ato clarify communications, especially between vendors and logistics service providers.Originality/value – The proposed denition is new, as well as the discussion of its important attributes and implications.

Keywords Supply chain management, Integration, Corporate communications

Paper type Research paper

IntroductionSupply chain visibility (SCV) is a commonly used term inthe supply chain management (SCM) and logisticscommunities. Most vendors of SCM software, third party

logistics providers (3PLs), transportation companies andothers claim to have or to provide SCV capability. However,achieving SCV remains an important issue, consistentlyranking near the top of surveys of SCM professionalsuncovered in this research. What causes this difference inperception? It is due, in part, to miscommunication aboutSCV, a concept critically important for effective SCM, forlogistics efciencies and for customer satisfaction. Lackingheretofore has been a precise denition of SCV whichcaptures its salient characteristics. This paper proposes sucha denition for SCV, and explains its implications and itsrelationship to other denitions: What are the attributes of other denitions proffered for SCV and how does the newdenition compare? How can the new denition be used byboth practitioners and vendors to clarify the understandingof SCV and to help them achieve it?

Use of the term SCVThe use of the term SCV is ubiquitous; a recent internetsearch (www.google.com, January 8, 2007) returned over348,000 entries. A cursory review of these entries shows that

most of the links are to vendors of SCM software, to 3PLs,and to others touting the SCV capabilities of their softwareand/or the services they provide. A search of an extensivecollection of databases, ABI/PROQUEST, containing articlesfrom academic journals, newspaper and trade publications,was also completed. The databases contained in the searchare extensive, covering:. regional and local business publications;. more than 1,800 worldwide business periodicals, and

information on more than 60,000 companies;. more than 750 business periodicals and newsletters with a

trade or industry focus;. academic dissertations and theses; and. in-depth coverage of 195 countries, highlighting over 250

global economic.

This search, conducted on January 8, 2007, yielded theresults shown in the Table I.

Table I illustrates that the term is most commonly used inmagazines, trade journals and newspapers with relatively fewacademic journal references. As with the internet search of theterm “supply chain visibility,” any sample of these sourcesconrms that most of the entries are from vendors claiming tohave or to provide SCV, often adding adjectives such as totalSCV, global SCV, end-to-end SCV and real-time SCV.

The widespread use of the term does not imply, however,that it is easy to dene or that there is agreement about themeaning of SCV. Cecere (2005) noted:

The current issue and full text archive of this journal is available atwww.emeraldinsight.com/1359-8546.htm

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deviations from plan. Companies are provided with realistic estimates of when materials will arrive.

Visibility: The ability to access or view pertinent data or information as itrelates to logistics and the supply chain, regardless of the point in the supplychain where the data exists.

Tohamy (2003) precisely dened SCV as “capturing andanalyzing supply chain data that informs decision-making,mitigates risk, and improves processes.” Bradley (2002)mentioned “ . . . visibility – direct insight into the status of orders, inventory and shipments across the supply chain.”Cecere (2005) states that SCV is more than simply data, andis focused on process: “ . . . visibility is a business process, notjust a supply chain process.” Schoenthaler (2003) denedSCV as:

Visibility means that important information is readily available to those whoneed it, inside and outside the organization, for monitoring, controlling andchanging supply chain strategy and operations, from service acquisition todelivery.

Finally, McCrea (2005) says that:Supply chain visibility is the ability to be alerted to exceptions in supplychain execution (sense), and enable action based on this information(respond). In essence, visibility is a sense and respond system for the supplychain based on what is important in the business.

These denitions, while not totally consistent, do highlightimportant attributes of SCV. Some view SCV as primarilyrelated to software or information technology. Some extendthe meaning to include action and decision making about theimplications of data, thereby extending the domain of SCV toinclude another important concept – supply chain eventmanagement. Others note the importance of process andevents. Reference is made to “pertinent” data or “supplychain” data, but what these data include is not specied. Oneidentied the need for “realistic estimates of when materialwill arrive,” implying the existence of a plan as the basis forthese estimates. Table II summarizes the key attributes of these denitions captured by these authors.

The denition proposed in the next section captures someof these attributes, but purposefully excludes others. Notably,it includes the notions of monitoring of events, estimating orforecasting future events, reference to a plan and deviationsfrom it, processes, and status. It excludes reference toinformation systems or software applications, aiding decisionmaking, and mitigating risk. The reasons for these exclusionsbecome apparent when the salient characteristics of theproposed denition are explained later in this paper.

A precise denition of SCVThe following denition is proposed for the term SCV whichcaptures and unies these important characteristics:

Supply chain visibility is the identity , location and status of entities transitingthe supply chain, captured in timely messages about events , along with the planned and actual dates/times for these events.

Each of the italicized components of the denition isimportant and requires further explanation.

An entity is any object moving through the supply chain. Anentity can be an item (SKU), a form of packaging (e.g.cartons, packages, or cases), an entire customer order, a formof encasement for the order (e.g. a pallet, tote, or returnableplastic container), a shipment (a collection of orders with acommon origin and destination), a lading asset (e.g. acontainer, trailer, railcar or uniform load device (ULD) for anaircraft) or a vehicle (e.g. truck, train, ship, or aircraft).Entities form a natural hierarchy as illustrated in Figure 1.

This hierarchy implies that items are contained in packages;one or more packages constitute a customer’s order; ordersare encased in pallets, totes, returnable plastic containers orother form of encasement; encasements are often loaded intolading assets (container, trailer or ULD); lading assets aretransported by vehicles (truck, train, ocean vessel, or aircraft).The hierarchy is dened through association of pairs of entityidentiers. This hierarchy and its constituent associations arenot only natural, but necessary. An inquiry about an order intransit rst requires knowledge about the vehicle transportingthe lading asset, the encasements contained in the lading assetand the orders within the encasements. For example, Figure 1shows that SKU 89765433 is associated with a carton withbar code label 99763452; the carton is part of customer ordernumber KHT-56-03-A-070215; the carton is encased in apallet with “license plate” (bar code label or RFID tag) KHT-56-03-A-070215-47653; the pallet is part of the shipmentDFW-PHL-070215-46; the shipment is loaded within trailer JBH8976; and the trailer mated to the vehicle Truck JBHDFW-PHL-070215-3. These associations are necessary anddynamic as the entity transits the supply chain.

The identity of an entity is simply a unique identier for it.Examples include a carton’s serial number (often encodedinto a bar code or captured on an RFID chip), an order orshipment number, a trailer serial number and an aircraft tailnumber.

Location is the association of an entity to a position.Location is dependent upon the entity and its position in the

Table II Attributes of SCV denitions

AttributeVitasak(2005)

Tohamy(2003)

Bradley(2002)

Cecere(2005)

Schoenthaler(2003)

McCrea(2005)

Software, applications, information technology U

Track and trace U

Monitoring of events U

Estimates of future events U

Plan, deviations from plan U U

Data/infor: availability, capture, access or view U U U

Aids decision making U U

Mitigates risk U

Processes, focuses on processes, improves processes U

Status of orders, inventory U

Monitoring, controlling, changing strategy or operations U U

Supply chain visibility: lost in translation?

Vernon Francis

Supply Chain Management: An International Journal

Volume 13 · Number 3 · 2008 · 180–184

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hierarchy. As an example, when inquiring about the locationof a customer order, it may be necessary to know the locationof truck associated with the trailer containing the order.Locations can be static or dynamic. An order waiting loadinginto a container is static in warehouse. An order encased in apallet within a trailer associated with a truck en-routeexemplies dynamic location – the truck is in motion.

Status describes the state of the entity. An entity’s possiblestates are dependent on the processes affecting the entity. Forexample, status for an order might be “waiting to be picked,”“picking in progress” or “picked, packaged, awaiting loading.”Status for a trailer might be “parked – empty,” “beingloading,” or “parked – loaded”

An event is the specic time when a task within a denedprocess is complete and, equivalently, when the next task in aprocess begins; it is the specic time when the location or/andstatus of an entity changes. Thus, processes dene events.Examples of events are “order picking complete,” “trailerloaded,” “truck departed” and “aircraft parked.”

A message is a communication containing the informationabout an entity – its identity, location and its status. The formof communication is irrelevant: it can be an EDI transmission,automatic data capture, automatic or manual updating of aweb page, a telephone call or a fax.

Actual and planned times refer to the times when an eventis planned to occur and when it actually occurs. Without thisinformation in a message about an event, the inquiring partyhas no basis for judging whether occurrence of the event isproblematic or not. Thus, this denition of SCV presupposesthe existence of clearly dened processes that specify events,and a plan for the entity in question.

In summary, the denition proposed here is all about thenecessary and sufcient information (identity, location andstatus) required for entities, stationary or moving, that arehierarchically organized, making their way through the supplychain. This requisite information is transmitted in messagesabout events, as dened within processes. Date and time of actual event occurrence are compared to the correspondingplanned date and time to render transparent the implicationsfor decision making.

Characteristics of this denitionThe denition of SCV proposed herein captures severalimportant characteristics of SCV. First, it claries that precisedata elements required, specically identity, location andstatus. More or less information is not required. Second, ithighlights the hierarchal nature of supply chain entities andthe necessary associations among them. It is not possible toachieve SCV without these associations as, for example, anorder that moves via intermodal, transoceanic transportationis encased in a pallet and transits from a warehouse to acontainer to a truck to an ocean vessel to a truck, to a railcar,to a train, and again back to a truck. Third, SCV dependsupon dened processes to identify the salient events of anentity as it transits the supply chain. Fourth, the occurrence of an event generates a message that changes the location and/orstatus of the entity of interest. Fifth, the entity at the highestlevel of the hierarchy is the entry point for inquiry about it andthe entities with which it is associated. These associationschange as an entity transits the supply chain. Sixth, the meansfor and medium of message transmission are not important.The denition is technologically agnostic. Surely, any

implementation of SCV must contemplate the informationtechnology to be employed and how it must be integratedacross multiple participants with various levels of technicalsophistication and capabilities. However, the denition of SCV is independent of the how messages are transmitted,received and presented. Seventh, actual and planned dates/times for events are necessary to provide context and the basisfor subsequent evaluation of the implications for SCV, notablywhether the message represents a normal occurrence or ananomalous event. Eighth, the events that generate messages,their timing and frequency are not particular to the denition.These are dependent on the nature of the business and itscustomers, the purpose for inquiry and the inquiring party.Messages need not be “real-time” for meaningful and usefulSCV. Finally, the denition implies that SCV is a necessaryprerequisite for and input to decisions about operations,notably supply chain event management (SCEM). Theperspective adopted herein is that SCV is the “rawmaterial” required for effective decisions; the act of decisionmaking and the decisions themselves thus are not included inthe denition of SCV. For example, SCEM, a decisionprocess, accepts SCV messages, determines their implicationsand recommends, or at least provides the basis for, correctivecourses of action.

This new denition and its characteristics distinguishinformation for decision making from the process of decisionmaking itself. The denition also precisely species theinformation required, and its fundamental relationship toevents which, in turn, dictate the timing of messages

containing the necessary information. It identies thehierarchical organization of entities and their linkages whichmust be understood to achieve “total supply chain visibility.”The denition also makes clear the intimate connection of events to processes, and the necessity for comparisons of actual to planned events.

Other denitions include, allude to or imply some of thesecharacteristics, but none include all of them. Other denitionsdo not separate information for decision making from thedecision making process as is done here. This is a subtle butimportant observation: it permits clearer communicationabout SCV by focusing only on the information required tofoster effective decision making. Thus, the new denition is

Figure 1 Entity hierarchy

Supply chain visibility: lost in translation?

Vernon Francis

Supply Chain Management: An International Journal

Volume 13 · Number 3 · 2008 · 180–184

183



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Guiaindustrial 13 Febero 2016