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What is the Hub and Wheel Model? How to Create Visibility into Your Supply Chain with Clear Communication

What is the Hub and Wheel Model?
How to Create Visibility into Your Supply Chain with Clear Communication

By Kelly Meyer, SWK Technologies, Inc., APICS NoCo Events Team & President Elect


 

How Are You Dealing with Volatility?

In the world of food & beverage supply chains, there are a lot of moving parts to manage, which requires visibility and open channels of communication throughout your organization. With fluctuating customer demand, the need to manage raw materials, shelf life and finished goods, today’s supply chains can be complex and volatile. As a result, your organization needs to be flexible and agile, with the ability to adapt quickly. Without the proper information in hand, you are operating in the dark and at a very high risk. Consider this:

  • Are you having a difficult time forecasting consumer demand?

  • Are you having difficulty tracking expiration dates and waste?

  • Are you holding too much inventory that’s not being pushed out, or making too much product with the same problem?

  • Is all this costing you money?

Avoid the Bullwhip Effect ... Visibility is the Key

Visibility into all the spokes in your wheel – the interrelationships within the supply chain – becomes your competitive advantage. Fragmented data can affect a food manufacturer’s daily operations in multiple ways and cost you money, for example: with over stocking and waste. Most information about customer demand can be quickly lost upstream in the supply chain, and although you cannot control industry trends, fluctuations, buying behavior, and seasonality, maintaining a history of this data in your system will help you manage your costs, time, and risk. A lack of visibility into your data can be one of the largest contributors to the bullwhip effect.

Transparent data will equip you to be prepared for shifting needs. Internally, it is important to know what stock you have on hand at all times and where your inventory is being held, with visibility into expiration dates. This will allow you to better manage the flow within your distribution processes, such as pick/packing/shipping and ensure you are complying with the food safety regulations.

How to Communicate … Are You in a Silo or Hub and Wheel?

Imagine a group of people talking but someone doesn’t hear the person right in front of them. That describes siloes of information. If you can have a hub of a wheel where everyone in the group are spokes, their roles are clearly defined and transparently connected. All members of the group can see and hear everyone clearly. Information gets disseminated more efficiently and transparently.

In other words, siloes require people to do much more work by tracking down the information they need, with paper trails and phone calls, which costs far more money and opens up the process to error.   

Why is Technology Vital in Your Supply Chain?

With the hub and wheel model, all departments are talking to each other, confidently optimizing how product flows from end to end. Roles and tasks are clearly defined and integrated which helps teams communicate to external teams as well as themselves.

When teams are siloed, they sometimes don’t know what they don’t know. What is on hand or shipped? What money has been spent? What is being made? What materials are on hand to make it? All these processes could be more automated with the right technology.

Start small but think really big. You want to pace your business and make sure systems are running efficiently without siloes. With the right technology, you can mitigate your risk because you are managing your growth with transparent data. Relationships are built between departments to grow business while pacing that growth adequately. You can run a more collaborative business practice including your suppliers and customers and manage volatility.

The Solution ...

The solution is a fully integrated, single database, “real time” Business Management Solution. This allows visibility into what’s on hand, anytime. Information and data are transmitted seamlessly and there are no more siloes. Since there is no middleware and you are on one single database, everyone in the company is simply looking at one single version of the truth. No one is left in the dark and you are confident your customers are being taken care of.

You no longer chase emails or misfiled papers. You don’t need to find joe to ask him. You don’t need to refresh or second guess. Agile decisions can be made and errors are reduced. Everyone is a spoke of the wheel and has visibility into the hub which houses data they need for financial trends, regional trends, buying/selling trends, and seasonal fluctuations and availability. Create your hub and wheel model of communication and stay ahead of volatility. 


Kelly Meyer, Sales Executive at SWK Technologies, Inc. has been working with ERP systems for over five years and helping businesses succeed for over ten years. She volunteers with the APICS Northern Colorado chapter, bringing her community building expertise to their many events.