Hanjin ordeal highlights importance of visibility

Guy Courtin, vice president of industry and solution strategy at GT Nexus, said shippers should think of visibility as a tool to monitor and connect all of their trading partners, whether product suppliers or transportation vendors.    The first question many shippers and third-party logistics companies asked themselves when news broke that Hanjin Shipping was filing for bankruptcy was “do I have any cargo on board Hanjin vessels?”
   If the answer to the first question was “yes,” or “I don’t know,” then the second question was, “where are those ships.”
   It often takes calamity or desperation for companies to see what they need, and in many cases, a lack of distinct visibility into where there cargo was only came to light in the minutes and hours after Hanjin began unraveling.
   Due to the incredibly interconnected nature of global trade, many shippers didn’t even know if their cargo was aboard a Hanjin ship even if they knew they hadn’t booked directly or indirectly with the carrier.
   Guy Courtin, vice president of industry and solution strategy at the supply chain technology provider GT Nexus, compared the way cargo may move through multiple parties to the way mortgages can be sold between multiple entities.
   “This is a story that emphasizes the importance of network visibility,” he said. “Where’s my inventory, what’s the status of it?”
   Courtin said most companies still take visibility for granted.
   “It’s easy to think that this is table stakes now, that you’ve got to know where your stuff is,” he said. “But it’s a difficult challenge to put all the tools and systems in place to take advantage of what’s out there.”
   Disruptions like Hanjin’s demise highlight the extent to which companies’ brands are tied to their enterprise partners, whether it be a supplier or a transportation vendor. Courtin likened the fallout of a shipment sitting idle on an anchored Hanjin vessel to that of a retailer using a supplier that’s violating human rights.
   “These brands are a reflection of them to some point,” he said. “Someone will fill Hanjin’s breach, but the brand they’re carrying, they’ll feel the effect of that on their brand. People who didn’t get their stuff at a retailer don’t care that there was a strike in Long Beach or that Hanjin went bankrupt. They want their stuff and they’re pissed.”
   GT Nexus, when it merged in 2012 with Tradecard, got deep insight into supplier compliance, and when it was posited whether shippers should perform the same due diligence with their transportation vendors, Courtin said maybe so.
   “Retailers are leaning on suppliers – we do lot of work to make sure they’re compliant, and also measure their risk and their credit rating,” he said. “We take the data out there, and create a digital mirror of supply chain, and make smarter assessments. These brands are going to become more sensitive to these types of situations from who they source from. What kind of data do they need to make those decisions. That’s our opportunity to be that partner and bridge that gap.
   “I don’t think carriers are going to become a competitive advantage, but they can hurt your brand and you have to look at that in that way.”
   In the meantime, Courtin discussed with American Shipper the idea that visibility ought not to only be a tool that gets dusted off when there’s a significant problem, like a tsunami or a volcano or a bankruptcy.
   There are opportunities to bake visibility into operations in a way that drives better performance and unearths unknown facts.
   “What else can you do around better visibility,” Courtin said. “There’s not much you can do around re-routing that order of two pallets of sneakers. But is there some way to take that data and make it a network view, to see where I’ve promised inventory.
   “You can play with scenarios, be smart about your inventory placement. If you go to some of these companies, though they’ll say ‘it’s cool, but it’s not high on my priority list. I’d like to believe some of the savvier retailers who know that the data is out there are going to start pulling this together. It’s not not about a carrier going out of the business, or a tsunami. It’s what else can I do with this that’s the exciting part.”