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This research note is restricted to the personal use of Stephen Oudet (Soudet@deloitte.fr).

Why Supply Chain Leaders Should Aim for End-to-End Supply Chain Visibility by 2016
1 November 2013 !"#$002%&3'% (hristian Tit)e *nd+to+end suppl, chain visibilit, is a -e, capabilit, for becomin. demand+driven in a mature value net/or-. This research clarifies /h, suppl, chain leaders should aim for implementin. visibilit, and collaboration solutions0 and ho/ improved visibilit, /ill impact the or.ani)ation.

O er ie! "mpa#ts
1 There are man, drivers for end+to+end suppl, chain visibilit, (*2*S(2)0 /ith enterprises .ainin. si.nificant 3ualitative and 3uantitative benefits b, collaboratin. internall, and /ith business partners throu.h the support of enablin. technolo.,. 1 4s visibilit, and collaboration platforms are maturin.0 more and more enterprises are implementin. solutions and services0 allo/in. them to mana.e activities alon. their e5tended value chains more effectivel,. 1 Sense and respond are critical processes for suppl, chain visibilit,. Onl, /hen visibilit, is coupled /ith advanced anal,tics and control /ill it help companies to obtain the full benefits of functionalities available.

$e#ommendations
1 6our suppl, chain visibilit, initiative should be a top priorit,. *ven if ,ou are on a lo/er suppl, chain maturit, sta.e0 start evaluatin. visibilit, options0 but approach them in a more modest and careful /a, alon. a road map that allo/s ,ou to evolve to *2*S(2. 1 7ush vendors to outline their road maps for visibilit, solutions. 8e a/are that visibilit, is not onl, about sensin. data0 but also ho/ to model9simulate it and ta-e appropriate action across ,our e5tended ecos,stem. 1 Once ,ou have ,our foundational suppl, chain visibilit, capabilities in place0 start incorporatin. emer.in. anal,tic capabilities into ,our decision process /ith predictive and prescriptive anal,tics. Onl, /hen visibilit, is coupled /ith anal,tics and control /ill it support an appropriate and profitable response. 1 !nvesti.ate innovative technolo.ies to also include unstructured data such as :e+ listenin.: about supplier financial and demo.raphical insi.hts. Those technolo.ies support data from different sources as basis for additional opportunit, and risassessments in ,our .lobal value net/or-.

Analysis
*2*S(2 is .ainin. interest in toda,;s .lobal suppl, chains because there is an increasin. need for net/or- collaboration to reduce ris- /hile maintainin. efficienc, and improvin. 2 performance. <aster insi.ht into issues means 3uic-er resolution and less disruption. *mer.in. visibilit, solutions and services0 mainl, /ith a multitenant architectural setup and provided in the cloud0 help to enhance multienterprise0 multitier collaboration b, providin. near+real+time insi.hts to transactions0 content and relevant suppl, chain information. 8ut man, end+user or.ani)ations are not ,et mature enou.h to ta-e full advanta.e of the technolo., available. =hen implementin. visibilit, solutions0 most companies still ta-e a more siloed implementation approach0 rather than e5ecutin. on a road map of initiatives that leads to an end+to+end vie/. 8ut even at a lo/er sta.e of maturit,0 a siloed visibilit, pro>ect could be started to .ain benefits.

%i&ure 1' "mpa#ts and (op $e#ommendations for E2ESCV

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Sour#e) *artner +o ember 201,-

"mpa#ts and $e#ommendations (here are many dri ers for E2ESCV. !ith enterprises &ainin& si&nifi#ant /ualitati e and /uantitati e benefits by #ollaboratin& internally and !ith business partners throu&h the support of enablin& te#hnolo&y
?ere /e address the follo/in. fre3uentl, as-ed 3uestions# 1 =hat are the drivers for suppl, chain visibilit,@ 1 =hat 3ualitative and 3uantitative benefits have companies .ained@ 1 4s inventor, reduction is one of the -e, benefits0 ho/ can this easil, be achieved@ There are multiple drivers for investin. in suppl, chain visibilit, solutions and services (see :Anderstandin. the "rivers0 Terminolo., and (onte5t for Suppl, (hain 2isibilit,:)# 1 The ma>or ones are the desire for hi.her order fulfillment rates9improved service levels0 the drive for hi.her profitabilit, and increased revenue .ro/th0 the /ish for increased operational efficienc, alon. /ith increased competitiveness and havin. a more a.ile response to demand0 /hile also reducin. ris-. 1 Other influencin. factors are a comple5 application landscape that prevents visibilit,0 select suppl, chain functions bein. heavil, outsourced0 mar-et pressure to better collaborate /ith brand o/ners for better service and the need to enhance data 3ualit, as the basis for less manual interventions. Throu.h the implementation of multienterprise applications offerin. collaboration and visibilit, capabilities0 companies can .ain a number of 3ualitative and 3uantitative benefits. The top benefits derived from *2*S(2 include reduced inventor, levels0 better on+time performance0 reduced variabilit, in lead times and financial benefits0 such as freein. up of /or-in. capital or optimi)ed frei.ht char.es. 4ctual numbers from individual visibilit, initiatives captured in our recent surve, state the follo/in. (see :Ase (ases for Suppl, (hain 2isibilit,:)# 1 !nventor, savin.s of 20B of value 1 !ncreased forecast accurac, of about 2%B 1 !mproved SC4s to consistent D&B levels 1 <rei.ht char.e reductions from %B to 3.%B of volume 1 "ecrease of inventor, on stoc- from >ust over 10 da,s to fe/er than seven da,s 1 Eeduction in /or-force b, 10B 1 4nd also of interest0 calculatin. the EO! of the implementation is onl, one ,ear Eeduced inventor, levels are certainl, of utmost importance to enterprises. 8ut ho/ can this easil, be achieved0 even /ithout the implementation of sophisticated visibilit, applications@ One /a, /ould be throu.h differentiated inventor, policies b, sta.e of product life c,cle0 the 3ualit, of demand si.nals and the len.th of suppl, lead times. Ee.ardin. lead times0 companies could use the follo/in. procedure to easil, .ain benefits# 1 <irst0 companies often have the /ron. baseline data for lead times and variabilit, in their applications0 either *E7 and9or suppl, chain mana.ement (S(F). So capturin. and storin. this information over time0 reco.ni)in. patterns and understandin. deviations allo/ reduced lead times and also stabili)e variabilit,. 1 Second0 operational en.a.ement is necessar, to catch e5ceptions in moves alon. the e5tended value chain. =ith this information in hand0 lead times in relevant applications can be revised. 1 Third0 -no/in. and understandin. all this could be used for structural chan.es. $lobal sourcin. and supplier mana.ement strate.ies can be rethou.ht and net/orstructures optimi)ed.

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Recommendations: 1 7osition visibilit, solutions in business+case evaluations as an enablin. technolo.,0 providin. a platform for multienterprise0 multitier0 process end+to+end collaboration. 1 Anderstand that drivers for visibilit, are not onl, enterprise+driven G such as hi.her profitabilit,0 increased revenue .ro/th and better operational efficienc, G but also from the mar-et0 /ith business partners loo-in. for improved service levels and better collaboration and data 3ualit, from ,our suppl, chain. 1 *valuate ,our lead+time master data settin.s for accurac,. Anderstandin. patterns and deviations allo/s for reducin. lead+times and stabili)in. variabilit,. 1 2erif, safet, stoc- and safet, time parameters. 8, .ainin. visibilit, over time0 ,ou could also manuall, or d,namicall, ad>ust those plannin. parameters.

As isibility and #ollaboration platforms are maturin&. more and more enterprises are implementin& solutions and ser i#es. allo!in& them to mana&e a#ti ities alon& their e0tended alue #hains more effe#ti ely
?ere /e address the follo/in. fre3uentl, as-ed 3uestions# 1 =h, is suppl, chain visibilit, critical to a compan,;s transformation >ourne,@ 1 =hat are the la,ers or capabilities necessar, to .ain full visibilit, benefits@ 1 =hen is the ri.ht time to start an initiative@ *2*S(2 is a core capabilit, for a mature demand+driven value net/or- (""2N). =e discuss ho/ to connect demand0 suppl, and product information across the internal and e5tended value chain via technolo.,0 people and business process. This can be initiated throu.h three activities# (1) >oint collaboration alon. processes supported b, technolo., (e...0 collaboration portals)H (2) inte.rated and harmoni)ed information0 a.ain supported b, technolo., (e...0 master data mana.ement IF"FJ solutions)H and (3) investments in multienterprise0 multitier supplier and channel partner visibilit,. 2alues companies have achieved throu.h the implementation of *2*S(2 include reduced inventor, levels0 better on+time performance0 reduced variabilit, in lead+times and financial benefits. The abilit, to efficientl, pre+empt problems and respond to suppl, chain disruptions is enabled b, *2*S(20 but re3uires additional capabilities and fi.urin. out the ri.ht response. This0 to.ether /ith controlled access and transparenc,0 combined /ith response plannin. and simulation0 allo/s companies to mana.e activities more effectivel, (see:Fultiple 7rocesses0 7artners and "ata Ob>ects Fust 8e (onsidered to Obtain 8enefits <rom Suppl, (hain 2isibilit,:). There are five layers or capabilities necessar, to .ain full benefits of suppl, chain visibilit, (see <i.ure 2). Fan, enterprises still do not ta-e advanta.e of all five capabilities0 and vendors often do not provide all of them in their solution offerin.s0 althou.h their portfolios are maturin..

%i&ure 2' E2ESCV Collaboration Layers

Sour#e) *artner 1+o ember 201,-

The lo/er three la,ers are referred to as the foundation0 /ith the collaboration hub as a platform that allo/s data sensin. (based on different architectural options such as e5chan.es or portals0 but al/a,s incorporated in a comprehensive suppl, chain pro.ram /ith .overnance or 3ualit, as -e, aspects beside pure architecture). 8ut the top ones are then the ones enablin. demand sensin. and tailored response based on simulation and optimi)ation0 .eneratin. value for the compan, and even the business partner communit,. There are multiple an.les to *2*S(20 /ith the aim of unif,in. multienterprise processes. Those are cross+functional and collaborative0 spannin. not onl, /ithin the or.ani)ation and then /ithin functional silos (li-e plan0 source0 ma-e0 deliverH in reference to the Suppl, (hain Operations Eeference IS(OEJ model)0 but across business functions and also outside the enterprise0 providin. a real end+to+end process vie/. 4 visibilit, road map /ill help ,ou to evolve into *2*S(2# 1 Sta.e 3 in our .eneral suppl, chain maturit, model (see :!ntroducin. the <ive+Sta.e "emand+"riven Faturit, Fodel for Suppl, (hain Ceaders:) describes internal collaborationH Sta.e K in the maturit, model is all about e5ternal partner

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collaboration. So0 suppl, chain visibilit, applications are a :must: for transformin. suppl, chain from an inside+out to an outside+in endeavor. 1 8ut even at a lo/er sta.e of maturit,0 functionall, focused and often siloed visibilit, pro>ects should be started to .ain benefits. <or e5ample0 simple trac-+and+trace capabilities /ould allo/ for a better picture of a lo.istics suppl, chain0 /hat to e5pect in a /arehouse for e5ample0 even /ithout havin. harmoni)ed *E7 s,stems or implementin. a central master data hub (-e, activities for a lo/er+sta.e maturit, compan,). !t is never too earl, to start. ?o/ever0 those /ith a lo/er suppl, chain maturit, should plan their road maps more carefull, to ensure that foundational activities can be levera.ed into later *2*S(2 efforts. Recommendations: 1 6our suppl, chain visibilit, initiative should be a top priorit,. *ven if ,ou are on a lo/er suppl, chain maturit, sta.e0 start evaluatin. visibilit, options0 but approach them in a more modest and careful /a, alon. a road map so ,ou can evolve to/ard *2*S(2. 1 <irst define the scope of suppl, chain visibilit,0 then pic- /hich /or-stream ,ou /ant to initiall, implement0 al/a,s havin. an e,e to/ard true end+to+end visibilit,. 1 Anderstand that ,ou cannot solve end+to+end visibilit, G /ith re.ard to multienterprise and multitier aspects G /ith ,our established *E7 bac-bone or /ith an, sin.le vendor solution. 2isibilit, re3uires an additional collaboration la,er on top of core business applications0 connectin. ,ou /ith ,our business partners. 1 The value of *2*S(2 technolo., comes from ho/ it enables9supports core suppl, chain domain capabilities (e...0 in the plannin. domain)0 but it re3uires a lot more functionalit, than >ust *2*S(2. Therefore0 as of no/0 it re3uires onl, one application0 but based on different use cases ,ou mi.ht end up /ith a selection of solutions. 1 (arefull, evaluate the approach to be ta-en0 from developin. in+house to implementin. pac-a.ed applications to outsourcin.. Trade+offs /ith re.ard to cost0 functionalit,0 ris- and spend /ill impact /hich approach /ill be ri.ht for ,ou. 1 Eedesi.n ,our information architecture to include cloud+based shared process and information la,ers0 /hich sit above ph,sical assets0 suppl, chain and operational applications. 1 7ush vendors to outline their road maps of visibilit, solutions. 8e a/are that visibilit, is not onl, about sensin. data0 but also to model9simulate it0 and ta-e appropriate action.

Sense and respond are #riti#al pro#esses for supply #hain isibility' Only !hen isibility is #oupled !ith ad an#ed analyti#s and #ontrol !ill it help #ompanies to obtain the full benefits of fun#tionalities a ailable'
?ere /e address the follo/in. fre3uentl, as-ed 3uestions# 1 =h, is it not enou.h to simpl, capture data to .et end+to+end suppl, chain visibilit,@ 1 ?o/ can unstructured and9or publicl, available data help to further increase visibilit,@ 1 =hat are the -e, hurdles for achievin. *2*S(2@ Cimitin. suppl, chain data to onl, bein. captured in a predominantl, structured format /ill constrain enterprises in their abilit, to obtain full benefits of functionalities available. 8eside the data aspect0 there are several challen.es to be overcome in order to achieve full benefits. These are certainl, not related to technolo.,0 but more or.ani)ational0 such as an internall, focused compan, culture0 a siloed or.ani)ational setup or the lac- of s,nchroni)ation across processes or data. Technolo., can also be a hurdle0 in re.ard to the disparate s,stems or multiple data e5chan.e standards used. "o not for.et that the maturit, of the /hole ecos,stem is a critical element of *2*S(2. Often0 the lac- of maturit, of smaller business partners ma, hinder collaboration throu.h the use of advanced technolo.ies. Sense and respond are critical processes for suppl, chain visibilit,. Onl, /hen visibilit, is coupled /ith anal,tics and control /ill it help companies to ta-e appropriate action (see :Optimi)in. 8usiness 7erformance =ith Suppl, (hain 4nal,tics:). The startin. point is a hi.h+resolution0 near+real+time (also referred to as :ri.ht+time:)0 multienterprise picture on a core set of business ob>ects across the suppl, chain0 but then this data needs to be evaluated. =ith the provisionin. of enhanced capabilities0 scenarios can be simulated and anal,)ed in conte5t /ith trends0 anomalies0 threats and opportunities so that a best business decision can be made. <inall,0 action items for business ob>ects are distributed to relevant partners and the impact of those actions are measured (see <i.ure 3).

%i&ure ,' Visibility 2ro#esses and Steps

Sour#e) *artner 1+o ember 201,-

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=e /ant to stress a.ain that visibilit, is not onl, the traceabilit, of ob>ects alon. the suppl, chain. This /as the initial functionalit, G the basic covera.e ans/erin. the 3uestion :=here is m, material0 m, order@: and the trac-in. and tracin. of products on the /a, bet/een business partners0 either inbound or outbound0 mainl, b, usin. electronic data interchan.e (*"!) technolo.,. !t is no/ the broader abilit, to ans/er the 3uestions# :!s m, suppl, chain follo/in. the plan@: and :?o/ do ! operate the net/or- profitabl,@: (i.e.0 ensurin. that ,our compan, is operatin. accuratel,0 respondin. fast and proactivel, doin. thin.s that /ill then result in better efficienc, and performance0 and0 ultimatel,0 success). 4nd thin-in. even one more step ahead0 havin. collected all the data0 it could be not onl, to react to disruptions (referred to descriptive and dia.nostic anal,ticsH see :<our "rivers Shape the 4doption of Suppl, (hain 4nal,tics in 2013:). !t is also about avoidin. them in the future0 utili)in. the ne5t level of predictive anal,tics (loo-in. into /hat /ill happen) and prescriptive anal,tics (ho/ /e can ma-e somethin. happen). (rucial data has man, sources G structured and unstructured G /here different partners in the e5tended value chain have different data ob>ects under control and available for collaboration. The evolution of the !nternet to/ard a collaborative net/or- allo/s users not onl, to consume content0 but also to contribute content and share -no/led.e. The ease of access to technolo., and services enables a far .reater number of users to publish content and provide their o/n information. 4nd ne/ services and soft/are (blo.s0 $oo.le *arth0 etc.) are as eas, to use as common des-top soft/are0 and become increasin.l, po/erful. ?avin. information at the earliest possible point0 alon. /ith inte.ration of different pieces of information0 allo/s 3uic-er response. !nnovative technolo.ies support the collection0 interpretation and visuali)ation of unstructured data# 1 :*+listenin.0: for e5ample0 involves collectin.0 structurin. and publishin. suppl,+ chain+relevant data. "ata mi.ht be related to technolo.,0 innovation0 or suppliers and sources from private or.ani)ations0 national statistics0 ne/s a.encies0 .overnment and educational institutions0 or /ebsites and >ournals. 4l.orithms then anal,)e data and reduce information overload and avoid information overe5posure0 deliverin. onl, useful information to the users. 1 $eota..in. then allo/s for visuali)ation of companies; value chains0 /ith different data sources as the basis for opportunit, and ris- assessments. *5amples /ould be the visuali)ation and verification of N+tier supplier locations0 assessin. them re.ardin. disasters and political or financial impacts0 thus allo/in. for multitier supplier selection and supplier mana.ement. Recommendations: 1 7romote outside+in thin-in. in ,our or.ani)ation to start to overcome common hurdles0 such as an internall, focused compan, culture or a siloed or.ani)ational setup. 1 Once ,ou have ,our foundational suppl, chain visibilit, capabilities in place0 start incorporatin. emer.in. anal,tic capabilities into ,our decision process0 /ith predictive anal,tics loo-in. into /hat /ill happen and prescriptive anal,tics e5aminin. ho/ ,ou can ma-e somethin. happen. Onl, /hen visibilit, is coupled /ith anal,tics and control /ill it allo/ ta-in. an appropriate and profitable response. 1 Ta-e advanta.e of enhanced technolo., capabilities once ,ou have captured data. These can offer simulation0 modelin. and /hat+if scenario capabilities0 allo/in. for the best business decision. 1 !nvesti.ate innovative technolo.ies that also include unstructured data such as :e+ listenin.: about supplier financial and demo.raphical insi.hts. Those technolo.ies support the collection0 interpretation and visuali)ation of data from different sources as a basis for additional opportunit, and ris- assessments in ,our .lobal value net/or-.

*artner $e#ommended $eadin&

Some documents may not be available as part of your current Gartner subscription. :"efinin. a Fultienterprise 4pplication 4rchitecture for Suppl, (hain Fana.ement: :Suppl, (hains Ee3uire Technolo., That 7rovides Fultitier 2isibilit,: :Fultitier Suppl, (hain 2isibilit, !mproves Suppl, (hain Eelationships and Eeduces Eis-:

Strate&i# 2lannin& Assumption

The deplo,ment of *2*S(2 solutions /ill increase up to %0B b, 201& from less than 20B of 1 end+user or.ani)ations bein. able to provide that visibilit, in 201L.

E iden#e
1

(urrent position and outloo-# 1 End-user or&ani3ational ie!4There is a lot of discussion about *2*S(20 /ith end+ user or.ani)ations reco.ni)in. the importance G ,et /hen comin. to actual initiatives it is mainl, siloed and /ithin one suppl, chain domain and not end to end. One of the -e, reasons is the lac- of maturit, of the ecos,stem0 but also the inabilit, to articulate a clear EO! for investin. in such solutions. So0 /e see a .ap in understandin. and e5ecution. 1 Vendor5pro ider ie! G On the other side0 soft/are solutions offer a lar.e variet, of visibilit, capabilities0 from a broader ran.e of functionalities do/n to niche offerin.s for either industr, or functionalit,. (urrentl,0 no provider offers a comprehensive :visibilit, suite: pac-a.ed application or services0 /ith end+to+end capabilities supportin. a multitude of use cases.

=ith chief suppl, chain officers ((S(Os) havin. visibilit, as one of their top priorities0 initiatives should rise0 success stories made public and the companies; mindsets shifted from :enterprise: thin-in. to a collaborative :communit,: approach.
2

On 23 and 2K September 20130 $artner hosted its annual *uropean suppl, chain e5ecutive conference in Condon. Nearl, K00 participants from end+user or.ani)ations and vendors

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attended this event, with a comprehensive agenda focusing on the reimagining of the supply chain. Supply chain visibility was one of the highest demand topics. It was debated at roundtables, presented with customer case studies and heavily discussed in numerous client interactions throughout the event.

2013 artner, Inc. and!or its "ffiliates. "ll #ights #eserved. #eproduction and distribution of this publication in any form without prior written permission is forbidden. $he information contained herein has been obtained from sources believed to be reliable. artner disclaims all warranties as to the accuracy, completeness or ade%uacy of such information. "lthough artner&s research may discuss legal issues related to the information technology business, artner does not provide legal advice or services and its research should not be construed or used as such. artner shall have no liability for errors, omissions or inade%uacies in the information contained herein or for interpretations thereof. $he opinions e'pressed herein are sub(ect to change without notice.

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