By David Parker
One of the fundamental challenges in supply chain management has been a lack of visibility that leads to inaccurate forecasts, poor planning, delayed shipments, poor decision making, inadequate customer service, higher risks and loss of revenue. How do you know if you need to improve visibility within your supply chain?
Start by identifying the visibility gaps that have the most significant business impact in terms of business resilience, cost control and competitive advantage.
Companies are finding that gaps in visibility inside manufacturing facilities, distribution centers, and between locations are constraining their digital transformation.
These visibility gaps are caused by:
Supply chain disruptions are not limited just to external forces. Many organizations do not have the means to continuously monitor the flow of parts through a manufacturing process or to track product flows in a distribution center. Consider how that visibility might yield operational savings.
Visibility also does not end when the finished product leaves the shipping dock. Consider the value of being able to monitor the location and condition of finished products for scenarios like recalls or to determine if certain parts are experiencing high failure rates. Being unable to track down products shipped to customers can have liability consequences in the case of a recall.
It is also advisable to factor in the level of detail that you need. For example, tracking product condition at the pallet level is cheaper than at the SKU level, but there may be a payoff for having such fine-grained information for high-value components.
Supply chain visibility is about more than just protection and cost control. It can also be a powerful competitive tool. According to an IDC study of 1,839 respondents across three regions and six sub-industries within manufacturing, 65% of firms view the supply chain as a source of competitive differentiation in today’s marketplace. With technology offering ever-more options to streamline processes, this should be an important consideration for any company.
Consider that Amazon revolutionized e-commerce and solidified its market leadership by innovating with overnight or same-day shipping accompanied by comprehensive tracking and delivery notifications. Those features gave the company a significant edge over its competition, enabling Amazon to continue to innovate while others play catch-up.
Supply chain visibility enables rapid response to market conditions that makes that balance possible. Visibility should extend to the point of sale and even beyond to enable manufacturers and distributors to see inequities before they develop into “out of stock” lost sales. If you have a store that’s selling ten iPhones a day and another that’s selling two, you need to be able to ship more phones to the stores that sell ten. It is becoming essential to have this assessment conducted in real time to allow your business to be agile and able to dynamically adjust to the changing needs of the markets and customers you serve.
The same opportunities are available in business-to-business markets as well.
The entire supply chain can be thought of as a complex workflow of many interlinked processes. Visibility helps supply chain professionals understand the tradeoffs in various alternative decisions, leading to the optimal choice for mitigating business risks.
The massive disruption caused by COVID-19 has clearly pushed real-time supply chain visibility to the C-suite. Given this environment, most companies now understand the need to increase visibility by rapidly accelerating digital transformation in their supply chains and adopting modern, cloud-based technologies like IoT, digital twins and AI/ML to help drive insights across their enterprise to ultimately deliver automated execution of business processes. At this point, you are truly on the path to a data-driven enterprise where exception-based management of the business becomes the normal mode of operation.
Learn how your organization can apply analytics and AI/ML to location, condition and contextual data to deliver continuous real-time visibility throughout your supply chain ecosystem.