A recent piece from ChainLink Research on going from complexity to clarity suggests a “management dashboard” that allows a manager to see the status of the end-to-end supply chain and the potential implication of a decision with respect to its impact on key metrics is the key to getting a grip on your complex supply chain.
It sounds great in theory, but it’s very dangerous in practice. Why? In addition to all the reasons I’ve already given you on why dashboards are dangerous and dysfunctional (in this post and this post), when you start chaining dashboards from different systems, you introduce the following additional risks:
- inconsistent views
Different systems may calculate metrics in different ways. For example, the WMS (Warehouse Management System) may present an on-time delivery rate of 90% while the SIM (Supplier Information Management) System has an on time delivery rate of 85%. Which is right? What if they’re both right? For example, the WMS may calculate on-time as percentage of shipments that arrive on the designated day using arrival time while the SIM calculates the on-time as the percentage of shipments that arrive complete on the designated day.
- propagated errors
What if the dashboards propagate erroneous metrics that are used in calculations to produce even more erroneous metrics? For example, what if the WMS incorrectly calculates on-time using date and not delivery time, and doesn’t capture the reality that everything after 11:00 am is late (as the truck can’t be unloaded during the normal shift if it doesn’t arrive by 11:00 am)? An inflated metric is then passed to the IMS (Inventory Management System) which uses this metric in its perfect on-time metric, which calculates this metric using parts that pass visual inspection but not quality testing. An inflated metric is then passed to the SIM system which might calculate perfect orders using orders that pass initial component testing, but ignore failures or returns within the full integrated QC (Quality Control) testing process.
The more information you have, the less likely you are to notice missing information. For example, if you have a dashboard that tells you your highest spend categories, current sourcing projects, upcoming payables, on-time orders, missing orders, expiring contracts, current and past-due project tasks, etc. you might not notice that your logistics costs are going through the roof.
In other words, integrated dashboards don’t necessarily improve visibility, but they do increase risk!