By Kate Hare, Vice President of Customer Success
Any incident, no matter how small it may appear to be, and regardless of whether it’s a product defect or business process defect, can paralyze a supply chain. The increased visibility, shared information, and collaboration provided by TraceLink Agile Process Teams for Supply Chain Issue Management (APT-SCIM) ensures that subject matter experts from both sides of the customer and partner relationship are equipped with the tools necessary to focus on potential shared issues that can result in disruptions.
When the container ship Ever Given ran aground in the Suez Canal in 2021 and completely blocked one of the world’s most important shipping lanes, thousands of supply chain managers were left chasing down information from their freight forwarders to find out how they were impacted.
Empowering and encouraging supply chain partners to log seemingly small issues immediately when they occur, and creating a defined team to digitally assess the issue, increases the chances that one of these subject matter experts will spot and avert a supply chain disruption. Without this visibility, the likelihood of identifying and resolving issues before they become a major disruption to the supply chain is very low.
Building a strong relationship with supply chain partners to notify you about small issues also applies when the potential for much larger disruptions strike. When the container ship Ever Given ran aground in the Suez Canal in 2021 and completely blocked one of the world’s most important shipping lanes, thousands of supply chain managers were left chasing down information from their freight forwarders to find out how they were impacted. Hundreds more ships got delayed as the six-day closure dragged on.
This occurrence has led to more supply chain managers trying to determine the best way to mitigate the impact of disruptions in the future. While a supply chain issue management solution cannot prevent a disruption of this scale, it certainly can improve communications with supply chain partners and mitigate the negative effects. For example, a supply chain partner could immediately create an incident to notify you that your shipment will be delayed and collaborate with you to find alternatives to mitigate the impact on customers, such as using air cargo for the next shipment. The Ever Given was ultimately delayed by authorities in Egypt for 106 days and disrupted many supply chains.
A key step in building stronger relationships with supply chain partners is a common understanding of the supply chain processes that need to be improved. APT-SCIM customers use the issue resolution history from disruptions, like the example above, to support process improvement programs such as Six Sigma. Companies with high standards for on-time, in-full deliveries to customers work with supply chain partners to understand the “defects” in current supply chain processes that would allow a disruption to impact a customer.
For example, a TraceLink manufacturing customer measured 8,400 defects per million (DPM)—a Four Sigma Level. Working with top supply chain partners over a multiyear period using a very methodical approach to issue reporting, well documented resolutions and continuous improvement projects, they reduced this number to 200 DPM, achieving a 96% reduction in DPM!
Combining a Six Sigma DMAIC process improvement methodology with APT-SCIM not only improves the immediate resolution of issues, but also greatly reduces the number of issues and the disruptions that they cause. With this powerful combination, organizations not only reduced DPM, but have reduced supply chain disruptions by as much as 97%. The result is a more agile and resilient supply chain that suppliers and other trade partners are enthusiastic about participating in.