Supply Chain Transparency (Visibility)

The emerging application of “Supply Chain Transparency” solves the predicament that most companies find themselves in: not knowing where the materials in their supply chains actually come from.

Supply Chain Transparency in GSQA® provides instant visibility of all of the value chain members that contribute to the material flow in a supply chain to a quality finished product.

Of course companies know to whom they send money for invoices of delivered materials. But the physical origin is much less certain. Shipped materials may not originate at the facility-of-record in a company’s ERP system. The goods in question may be manufactured at distant plants, at partner companies, or may be direct-ship products. These models have existed for a long time, but the lack of specific location knowledge is wearing thin as consumers worry about Country of Origin and the social initiatives surrounding responsible sourcing.

Quality professionals worry about managing sourced materials to comply with company quality standards without appropriate tools and systems. Executives contemplate the risks of fraudulent materials and falsified reports that might impact customer safety and company viability.

In the supply chain, members are suppliers of raw materials or of intermediate products made up of multiple components or raw materials. Those suppliers of intermediate products have their own suppliers, and so the supply chain extends backwards (or upwards) to an actual origin of each raw material. This is seen in the bill of materials of complex products which appear as an indented hierarchy of family relationships (who belongs to whom).

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Some of the steps in the value chain may be distributors and brokers, as well as co-manufacturers. Even enterprise feeder plants must be considered in the value chain as they provide bulk materials to meet their finished product plants’ specifications.

Supply Chain Transparency strives for the documentation and display of those connected relationships along the supply chain. In GSQA® the relationships are defined by the supply chain members themselves as they access the application online. By entering their biographical information and defining their suppliers for the materials in their finished products, the suppliers automatically generate the supply chain family tree. At any point, a company’s finished product may be an ingredient/component in their partner’s own finished product and act as another level in the supply chain to a quality final product.

The biographical information can also be location-specific data such as latitude and longitude for positioning on Google Maps and graphical displays by attributes. This new depiction capability allows visualization of information not previously defined or managed.

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An alternative to a geographic map is the hierarchical listing (below) of the multiple tiers that constitute the levels in the supply chain. In the image the first tier supplier to a GSQA® customer plant is shown in gold, and its two next tier suppliers backwards in the supply chain are shown in purple. One purple 2nd tier sub-supplier has defined its own supplier making that new company a 3rd tier member. Each last tier supplier has defined its material’s “origin”.

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As an alternative to the hierarchical display, the bubble diagram below reinforces the awareness that these separate entities/companies comprise a supply chain. Via the Transparency module in GSQA® they are joined together in a business relationship for supplying purchased materials to their downstream customers in the supply chain. In this display (which is automatically generated as supply chain data is entered) the arrows are active links to the material codes being shipped. The user can mouse-over a company symbol to quickly see biographical information. The diagram is adjusted by dragging the company symbols into different arrangements while maintaining their relationships.

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These visualization options and their underlying data create a new platform for fast analysis of supplier locations per material, early warning signals for problem suppliers, possible impact of disruptive natural events, and options for adjusting supply chain demand distribution.

Some of the specifics include:

It should be noted that the Transparency module is not where the active tracking of material movement in the supply chain takes place in GSQA®. This module creates the supply chain chart of its members. A similar sounding term “Traceability” builds on the transparency information with the movement of materials in the supply chain based on lot number, batch number, or serial number. Those elemental tracking entities have been augmented with the GS1 Global Trade Item Number (GTIN) for enhanced description of materials flowing in the supply chain.

So, when we add Traceability’s material movement tracking to the Transparency definitions, we now know

Adding the Traceability material movements can be another layer of valuable data.

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Please note that in GSQA® this hierarchy is not a static bill of materials, but a chart of the actual batches or lots that went into each level of the supply chain for the specific finished product batch. The truly practical supply chain configuration further describes the materials with quality information that helps identify the actual quality characteristics of the materials as acceptable or unacceptable, authorized or fraudulent, clean or contaminated, real or counterfeit. For additional insight concerning material conformance, please see the GSQA® discussion on Material Variability Management (http://gsqa.com/product-modules/material-variability-management.shtml)

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