Visibility and Security
in the Supply Chain
IN 2022 & BEYOND
The supply chain industry faced a number of new risks and challenges in 2021. In addition to the ongoing pandemic, the system is under pressure from a surge in consumer demand and shortages of product, containers, drivers, and supply chain capacity in general.
The story of the second half of 2021 was the historic capacity crunch that had containers full of goods sitting at ports for days and weeks, while a driver shortage left few options for keeping that cargo moving.
The need for visibility has never been greater.
The 2021 capacity crunch is not going away anytime soon, and presents a major opportunity for shippers to make themselves indispensable to their customers both now and in the coming years. Visibility allows you to verify the integrity and safety of shipments, as well as ensure product is moved more efficiently and at a lower cost.
This is especially true as we look ahead to 2022 and consider four trends in visibility and security shippers can expect to impact their business.
Digital transformation in the supply chain has been a growing trend over the past decade.
Visibility is redefined
for risk mitigation
From just in time
to just in case
What does resilience look like? According to Heather Wheatley, Senior Director Analyst at Gartner, it requires four investments:
It’s time to invest in visibility for greater security and integrity
At the same time, shippers and 3PLs can use visibility to keep carriers accountable. With capacity strained and drivers hard to find, some carriers will inevitably cut corners and sacrifice the integrity and security of cargo. The 3PLs and shippers with visibility of the location and status of their products can better enforce standard operating procedures. While there are many substantial issues to resolve to relieve the pressure on our supply chains, technology and the breakthrough on infrastructure legislation offer shippers and 3PLs an opportunity to actively address some of the biggest risks we face right now.
Why you need an integrity and
You can’t afford to be left in the dark anymore. There are too many risk factors at play to not have advanced tools to deal with disruptions, and not addressing those risks will prove costly.
Technology doesn’t just save you money, it gives you valuable insights into your business, providing you with data you can act on.
The digitization trend will continue to evolve and staying ahead of the technological curve gives you an advantage over competitors
Increased visibility in the supply chain is a strategic advantage that separates companies from the pack.
Gartner estimates that through 2024, 50% of supply chain organizations will invest in applications that support artificial intelligence and advanced analytics capabilities.
Like in many other industries, COVID-19 added new velocity to digital change. Now companies are in various stages of technology maturity, working to digitize complex systems. While many are eager to harness the power of data, supply chain leaders and their organizations are often not yet ready to reap the benefits of digitization, digital transformation, and data-driven decisions.
According to Gartner, 8 out of 10 supply chain executives say they made investments in technology, but they aren’t sure why they’re not getting better decisions.
Visibility is also helping shippers crack down on double loading and cargo theft by more closely tracking where trucks are and what cargo they’re carrying. Once the carriers understand you’re tracking for double loading, the problem tends to go away. Visibility creates transparency, which can guarantee the integrity and security of every shipment and address whatever new risks might arise in the future.
Many companies still lack sophisticated visibility into the location and status of their cargo, trucks, drivers, and more. They might have plenty of data, but not the technology to analyze that data and make informed decisions. With capacity strained, drivers hard to find, shipments commanding a premium, and carriers taking shortcuts, shippers and 3PLs can no longer afford to stay in the dark. They need to protect the integrity and security of cargo or find new efficiencies that relieve some of the pressure of the supply chain crunch.
According to Gartner, 68% of supply chain leaders feel they do not have the time to recover from high impact events before a new event arrives.
In 2022, supply chain leaders must take their risk management capabilities to a new level. They need to implement risk management strategies using real-time visibility and historical data-driven insights to gain control over shipments and mitigate the effects of any emerging challenges. For example, given recent driver shortages and the overall capacity crunch, minimizing road risks is essential. Real-time analysis of driving behavior – including speeding, cornering, and braking -- helps drivers make better decisions to stay safe. Drivers who understand they’re being tracked and assessed based on safety data tend to become safer drivers. Everyone wins when you can avoid accidents.
Visibility has a play in supporting a just-in-case model and managing supply chain flows and any risks associated with it. The 2021 supply chain executive order basically tells companies in key strategic industries, such as semiconductors and healthcare, to map out and start thinking about where they can mitigate risk within their supply chain flows by onshoring certain components and seeking out a more diverse range of suppliers and vendors for certain raw materials. The end goal is a supply chain built on resiliency and agility.
Given the current supply chain capacity crunch, everyone is rethinking and restructuring lean, just-in-time processes. The goal now is just in case, a hedge against the kind of disruptions that have become all too common.
Visibility can help, but only if it goes beyond just saying, “Here’s a dot on a map, that’s where your shipment is.” Risk management has taken on new meaning in the last couple years as first the pandemic and then the supply chain crunch and capacity shortages upended supply chains across the globe. No longer do we have the luxury of dealing with one crisis at a time.
According to Gartner, 75% of supply chain leaders report an increase in high-impact disruptions compared to five years ago. While risk management allows leaders to work proactively, resilient systems are still required for an effective response to a threat.
Response optionality, or the ability to choose new paths to avoid resource constraints
Disruption awareness, or the ability to anticipate disruptions and respond to a change in conditions
Responsive executive, or the ability to sense and respond dynamically
Intelligent responses, or preparing staff to make strong decisions in the face of adversity.
No, we won’t always have a global pandemic and a historic capacity crunch causing long-lasting ripple effects in the supply chain, but disruptions will never go away. Whether it's volcanic ash clouds or other natural disasters or political turmoil, we will always face external influences beyond our control. That's why building that resiliency and robustness into your solutions is critical: You can flex when those disruptions occur.
Visibility and Security Outlook: 4 Trends to Watch in 2022
Visibility becomes a
real-time compliance check
Shipping companies with superior technology have the upper hand. Right now, they are struggling with communications and compliance blind spots in a supply chain where they’re turning to unfamiliar carriers and the risk of double loading and double brokering has become more common.
You can win in the current market not just by being reliable but by being transparent and proving the integrity and security of the products you move. You need to be able to guarantee you’re meeting your customers’ or clients’ standard of care 100% of the time. Some clients have sensitive cargo that require the frequent monitoring of time and temperature.
Vaccines are a good example of this. COVID-19 vaccines have strict parameters around the temperature at which they’re stored. The Pfizer-BioNTech vaccine, for example, is shipped in a thermal container at temperatures between -90°C and -60°C (-130°F and -76°F) with dry ice. If you can guarantee — and prove in real time — those vaccines will stay at the proper temperature and won’t be double loaded alongside perishable products, for example, you have an advantage over your competitors that can’t.
Visibility becomes almost like a real-time compliance check on every single shipment to make sure products are moved in the proper way. Visibility not only allows you to manage risk but support quality processes as well. While many shippers have a certain level of visibility, most still lack the kind of technology that solves the complex problems of high-value, high-sensitivity cargo.
data opens new opportunities
Effective integration leads to democratization. Say you are shipping vaccines or other highly sensitive pharmaceutical products. Visibility can be provided through digital tools, such as a time and temperature sensor tracking system that feeds data to a mobile app that can be used by anyone regardless of their logistics experience. You just scan the external code on a box and you’ll know your product is at the right temperature.
Next, make investments in data literacy and visualization to empower your wider organization to leverage technology to solve multiple problems at once. This process is the democratization of data through data literacy efforts. It is the difference between investing in a supply chain solution and seeing the return on investment from that solution.
The key to making strides is simplifying and then democratizing. First, you need to find and close any gaps among your various solutions. Many organizations have no shortage of data, but what they’re lacking is context, which can only be achieved by integrating the various data sources.
The expanse of digital tools and the application of them has far-reaching benefits. Leveraging technology to support customers prepares them for the future and helps them grow in their journey toward digitization. It also helps you leverage data to improve your business.
There are also a number of risks stemming from the capacity crunch, from the costs of inefficiency to the increase in double loading and thefts by opportunistic criminals. With greater visibility, you can maximize the assets and drivers you have by finding more efficient routes, ensuring drivers bring shipments back from the warehouses where they unloaded, and more. Given the considerable expense of every container, every company across the supply chain should leverage visibility to do more with the limited resources they have.
It’s clear that capacity issues and driver shortages aren’t going anywhere anytime soon, and poor infrastructure will be part of our lives for years. This is where visibility comes into play. With shippers, 3PLs, and carriers pushed to their limits, adding visibility allows them to maximize the assets and drivers they have. Real-time analysis of driving behavior can help keep drivers safe and available by avoiding road hazards, red zones, and other risks.