Supply Chain Management is an umbrella term that covers a wide range of concepts related to the logistics of managing the entire manufacturing process of a product from sourcing the raw materials to the delivery of final goods. Efficient Supply Chain Management not only ensures timely delivery of goods to keep customers satisfied but also brings down costs for the manufacturer by reducing wastage. Supply chain logistics are a complicated set of principles that are difficult to implement ideally because it is hard to coordinate efficiently between different entities involved in various stages of the chain. That’s why Blockchains can be very useful to successful supply chain operations as they allow the trust to be managed across the network. Let’s take a look at some of the concepts like E2E in Supply Chain Management for a better understanding of how it functions.
How Can Supply Chain Operations Be Improved?
Since the entire manufacturing process consists of several steps along the way with different organizations, supply chain logistics involve a lot of paperwork. Usually, delays due to paperwork cost anywhere from 25-35% of the total delays in the process. The organization of cross-border paperwork has not seen any massive reworking since the mid-1960’s. Blockchains can help reduce this paperwork tremendously and modernize this aspect of supply chains for more efficient execution.
Blockchains are especially useful in this scenario as they can help establish trust between different entities who are not familiar with each other. Typically, various entities involved in the supply chain do not like to share information with others in the fear that the information they shared could be used to undermine their business. By leveraging blockchains, these entities can share information on a case by case, permissioned basis. This eliminated the need for sharing all of the information while still making the shipping process more efficient.
End to End: A New Approach
E2E or End to End supply chain management refers to the entire supply chain operation being designed so that there is greater interoperability among the different pieces of the supply chain puzzle. Experienced supply chain shaman Lora Cecere writes on her website that a lot of the companies get the fundamentals of E2E logistics wrong. She claims that while there is no doubt that these companies can benefit from E2E, they are just doing it wrong. E2E are very useful for big companies because it allows them to have much greater control of the workflow at any given time. If there is a team that is dedicated to the planning of E2E supply chains, it can make changes to the chain in real time. For example, delays in one part of the shipment can be adjusted for in the following sections such as comprehensive knowledge exists with a team. According to Cecere, businesses should instead begin with a clear goal in mind and refer to the following guidelines when designing their E2E systems:
Companies should not get over dependent on technology and use it without rethinking the planning architectures. In doing so, some of the redundancy can be taken care of.
Companies should be aware of the four distinct layers of planning functionality – strategy, tactics, operations and their executions. Since these layers often work simultaneously and have different time horizons, planning cycle and levels of data granularity they can help with better planning.
For E2E systems, the supply chain begins at the channel and ends with the supplier. The flow of information, in this case, should go both ways. What most companies seem to get wrong is that they instead start in the middle which makes for difficult planning further down the line.
Each layer involved in the supply chain needs to be conscientious of the entire connection between the suppliers and the consumers and plan accordingly. This is called consumption logic. There needs to be consumption and synchronization between the layers.