Spotlight on Metrics: Supply Chain Visibility

Summary

Dela faced supply chain disruptions when its apple puree supplier couldn't deliver on time, impacting revenue and damaging relationships with distributors. The COO, Dante, identified a lack of visibility into inventory across the supply chain as the root cause. By improving supply chain transparency, Dela gained real-time insights into inventory levels from suppliers to retailers. This allowed for better early detection of potential issues and proactive problem-solving. After two years, Dela's efforts led to increased agility, reduced costs, improved traceability, and strengthened relationships, boosting the brand's credibility as a sustainable producer.

Takeaways

• 😀 Dela faced major disruptions in its supply chain when its apple puree supplier couldn't deliver, leading to missed shipments and revenue loss.
• 😀 The missed shipments harmed Dela's brand and damaged relationships with outbound distributors who were unable to meet inventory commitments.
• 😀 Dela's COO, Dante, identified the root cause of the issue: a lack of visibility into current inventory levels across the supply chain, including sub-suppliers.
• 😀 Supply chain visibility involves tracking inventory levels from suppliers to customers, offering an end-to-end view from raw materials to final sale.
• 😀 Dela's supply chain spans multiple tiers, from first-tier suppliers like XJF Foods to third-tier suppliers like farmers providing fresh apples.
• 😀 A malfunction at one of XJF Foods’ processors, coupled with a plant disease affecting apple orchards, significantly impacted apple puree supply.
• 😀 Dante believes that the benefits of improving supply chain visibility far outweigh the implementation costs, such as enhancing network agility and resilience.
• 😀 With improved supply chain transparency, Dela can detect potential upstream problems early, such as production stoppages, and take action to prevent disruptions.
• 😀 Successful supply chain visibility requires strong collaboration across all tiers of the supply chain, enhancing planning and reducing inventory costs.
• 😀 After two years of effort, Dela’s enhanced supply chain visibility allowed it to build relationships with 20 new processors and improve brand equity by emphasizing ethical and sustainable practices.

Q & A

What issue caused Dela to miss shipments to its outbound distributors?

Dela missed shipments because its apple puree supplier was unable to supply the required apple puree, which disrupted the supply chain and caused delays in deliveries to distributors.

How did missed shipments affect Dela's business?

The missed shipments negatively affected Dela's revenue, damaged its brand, and strained its relationship with its outbound distributors. This led to unmet inventory commitments and lost sales opportunities.

What is the root cause of Dela's supply chain problems, according to its COO Dante?

Dante identified the lack of visibility into current inventory levels among Dela's suppliers and sub-suppliers as the root cause of the problem.

What is supply chain visibility, and why is it important for Dela?

Supply chain visibility, or transparency, refers to having a clear, end-to-end view of inventory across the supply chain. It is crucial for Dela because it helps prevent disruptions, improves planning, and ensures a smoother operation by allowing early detection of potential issues.

What does an end-to-end view of inventory in the supply chain mean?

An end-to-end view of inventory means being able to track the inventory levels across all stages of the supply chain, from raw material producers to the final point of sale, including all suppliers and customers.

How many tiers are involved in Dela's supply chain, and what are they?

Dela's supply chain involves three tiers: first-tier suppliers, such as XJF Foods; second-tier suppliers, which are processors who supply the first-tier suppliers; and third-tier suppliers, which are the farmers who supply the processors with raw apples.

What specific issues did XJF Foods face in its supply chain?

XJF Foods experienced an equipment malfunction at one of its processors, which affected production. Additionally, three orchards in Washington state suffered a 40% drop in production due to a plant disease, and a fourth orchard went out of business.

What benefits does Dela expect from improving supply chain visibility?

Dela expects several benefits, including improved network agility, enhanced supply chain resilience, reduced inventory carrying costs, and better product traceability, all of which contribute to a more efficient and transparent supply chain.

How does Dela's improved supply chain visibility impact its relationships with suppliers and distributors?

The improved visibility helps build better relationships by fostering collaboration and transparency, enabling proactive problem-solving, and ensuring smoother operations across the entire supply chain.

What long-term impact did Dante's supply chain visibility initiative have on Dela's business?

The initiative helped Dela form relationships with 20 new processors worldwide, enhanced product traceability, increased brand credibility, and built Dela’s reputation as an ethical and sustainable food producer, thus boosting brand equity.