The Power of Information

October 2nd, 2013 - by andrewh

by Mike Challman, VP North American Operations, CLX Logistics

Sophocles, a Greek playwright from the 5th century BC, once wrote, “Not knowing anything is the sweetest life.”  Clearly, Sophocles never worked in supply chain management.  Those of us who have made a career of the logistics arts could write our own tragedies about the consequences of not having the right information at the right time.

What is the ‘right information’?  Seems like a simple enough question.  However, we sometimes consider some information to be important that really is not relevant to the job. Other times, we might base a decision on information that is flawed in some way or get accurate information too late to be helpful.

Some of the key attributes of meaningful supply chain information are as follows:

  • Relevant

We live in an age where technology provides us with the ability to capture data that surpasses anything we could do in the past.  Enterprise Resource Planning (ERP) systems, Transportation Management Sytems (TMS) and freight payment systems offer reams of data about your supply chain.  But, just because something can be tracked and reported doesn’t mean that it deserves your attention.  We can become enamored with information because it’s interesting.  However, ask whether it is relevant to helping improve service, reduce costs, or support other supply chain efficiency gains.

  •  Timely

Information that can support supply chain decisions or corrective action needs to be available within sufficient time to assess, understand and include it in the decision process.  Supply chains move fast so information must move at the same velocity.  For example, if a customer shipment is delayed enroute, the logistics team must have the ability to know status immediately to take corrective action or, at a minimum, notify the customer of the delay.  You don’t want to learn about a service failure from the customer.

  •  Reliable

Worse than ‘not knowing anything’ is using information that is wrong or misunderstood.   Accurate calculations are vital.  As information is often derived from multiple places (ERP, TMS, etc.), ensure that the source content and context are understood to prevent confusion.  For example, information about freight costs for a calendar month can yield different numbers from different sources.  The TMS may report on what was shipped while the freight pay system may report what was paid.  Neither is wrong, so understanding the context is critical to the reliability of the information.

  •  Objective

To steal the tagline from the 1981 film “Absence of Malice” — suppose you picked up this morning’s supply chain reports… and everything they said was accurate… but none of it was true?  Data is impartial; but, as it becomes information, outside factors may affect it so that it takes on a slant or spin.  For example, a service reliability report might state Adjusted On-Time Delivery as 99.9%.  But, what if the ‘adjustments’ excluded a type of failure important to you?  It’s essential to understand the assumptions or influences behind the interpretation of data.

  •  Cost Effective

One final question that often doesn’t get asked:  Is the information worth the cost?  Data capture, review, cleansing, correction and analysis can be time-consuming.  Report development and production isn’t free, either.  A healthy information management program will recognize that effort and expense and validate that the ‘juice is worth the squeeze’.  Periodically, reviewing what is being produced and distributed is also critical.  Over time, information that was once valuable may become unnecessary.  Finding and eliminating those relics will bring efficiency and cost control to your supply chain information management efforts.

Our business vocabulary reflects what today’s information environment has become – we talk about the ‘Cloud’, we talk about Big Data.  The incredible degree to which we can capture and report information is exciting and can provide a great competitive advantage in the management of your supply chain… if the information is kept manageable.  Focus on these five attributes and you will be able to do that.

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