Supply Chain Visibility: The Unfulfilled Promise

Recent studies of Supply Chain Management by numerous market research firms show that supply chain visibility is a high priority for most respondents. This is obvious, as visibility brings in the benefits of enhanced quality of the services provided, thereby, escalating the satisfaction of its customers. The other benefits are that of cutting down the transportation and handling costs, alongside softening the effects of disruptions. However, many organizations are yet to achieve a good supply chain visibility. This clearly reveals how companies are not really making headway in this regard. They need to understand first why the visibility part is particularly important. Forbes states that for visibility, the definition was a solution providing visibility to the order process (order placed, order adjusted, order accepted), inventory at rest or inventory in motion events, or supply chain risks, or providing a stand-alone supply chain analytics/event management solution not embedded in other solutions. The following illustration shows a clearer picture of the size of the supply chain industry in today’s market.

Image credits: Global Market Insights

The Importance

Visibility is the answer to increasingly complex supply chains. It is required to make the concrete benefit of supply chain visibility more tangible. Let’s look at five areas where the visibility is useful. Where is visibility especially useful? We look at the five problem areas and five solution examples.

• Procurement: The need for right information is a compulsion for any successful supply chain. Visibility will mandate security messages and complex customs procedures that often require very detailed information. This further helps in reliable planning and order management.

• Customer Satisfaction: Visibility leads to better service levels. The optimization of service levels has taken on increased importance in recent years. Visibility helps to identify potential disruptions in advance and thus take immediate action with service level agreements, promised lead times, and ongoing planning updates.

• Risk management: Another very important aspect of supply chain visibility is bringing transparency to risks in the supply chain and obtaining consistent, complete, and validated data. End-to-end transparency enables a basic understanding of the risks that exist and makes it possible to qualify them.

• Supply Chain costs: A key dimension of supply chain visibility is the real-time transparency of the ongoing processes such as the status of a customer order, the scheduling of picking an order, or the current location of a container. Transport capacities can be efficiently utilised if we have such information at our disposal.

The Answer to Increasing Complexity

The internet possesses the ability to compare products and services from all around the globe. With this, it has brought about a revolution in the commerce, thus playing a vital role in driving a change in the modern supply chains. Customers can shop around the clock with the facility of timeless delivery. Businesses nowadays are focusing on customers with demands, making it mandatory for the supply chains to maintain or optimize their levels of service. Several challenges are posed due to complex products, shorter product cycles, volatile markets, and an unknown number of business partners spread across the world, that increase the disruption risks. These challenges are further amplified when they are entangled with one another, thereby giving rise to the need for new supply chain strategies. However, the only route to overcome this complexity is through comprehensive visibility along the entire supply chain and IT support. To pursue this, companies are now exploring technology’s role in improving the traceability and trackability of products. The Internet of Things is believed to be the saviour technology that can completely address the issues faced in the existing supply chain networks.

Summarizing

Supply chain visibility is the IT-supported monitoring and visualization of every process workflow within the supply chain, right from the producers to the end customers. It is still an unfulfilled promise in many organizations. However, extended visibility solutions can deliver their full benefit only if supply chain partners are integrated. The processes and data needed to bring about visibility require cross-functional knowledge transfer and information sharing, both within the company and between the partners. This is the only way for visibility to deliver on its promise of helping businesses adapt to changing conditions and remain competitive in the long term.