The increased globalization of manufacturing and recent events such as the Covid-19 pandemic have placed a greater emphasis on supply chain management. Now more than ever, being able to deliver goods anywhere and anytime is crucial to satisfy your customers and increase your sales.
Supply chain visibility is critical for business success today. Dealing with intricate supply chains requires transparency to avoid disruptions, prevent customer complaints, and reduce costs.
However, supply chain visibility (SCV) can be challenging to achieve. But it is far from impossible. With the right strategies and tools in place, any business can overcome the inherent challenges associated with SCV.
What Is Supply Chain Visibility?
As companies have split up parts of their supply chains to make production more efficient, it has become more challenging to manage their operations effectively. These challenges require greater transparency to address increasingly complex systems.
SCV refers to the capability of tracking sub-assemblies, individual components, and finished goods as they move from suppliers to manufacturers and ultimately to consumers. SCV includes the visibility of information inside a company as well as across partners within a supply chain.
Generally, problems with SCV are easier to address within a company due to the increased control over participants and established systems. Increasing SCV among partners spanning the globe can be more challenging due to cultural differences, language barriers, and the lack of incentives or motivation of external players.
Types of SCV
As is probably clear by now, SCV is a rather broad concept. It involves aspects of supply chains that vary by company and industry. However, SCV provides valuable information to benefit supply chain professionals in three core areas.
Where Are Your Products?
Visibility in supply chains can help in determining the real-time location of goods. This information can aid firms in making purchase decisions, cash flow determinations, and alerting stakeholders of the status of orders. Ultimately, these benefits can help your bottom line and ensure that your customers are more satisfied with their experience using your company.
How Much Are Your Transportation Costs?
When supply chains become more extensive, managing larger order volumes, handling a greater number of shipments, dealing with more extensive carrier networks, and monitoring a large number of fulfillment locations become more challenging.
Changes in early return dates (ERD), an increasingly common problem these days, further complicates the ability of firms to track their transportation costs accurately. Changes in ERD often result in storage fees, demurrage penalties, chassis rental costs, and other charges. These costs represent unanticipated threats to the sustainability of operations.
SCV allows you to assess your overall transportation costs better. This access to information allows for better budgetary decisions, improved cost-benefit analysis, and better bottom-line results.
Tracking and Recording Transactions
SCV allows a firm to better analyze freight information and information on past transactions as well as associated problems with past orders.
This is critical for a firm to reduce costs and identify areas that need improvement. Another bonus of this process is that it makes complying with all relevant regulations easier, which is particularly valuable for firms that operate in many different countries.
Benefits of SCV
There are important reasons why 93% of supply chain leaders focus on improving supply chain visibility. The overall goal of SCV is to gather valuable information about the operation of supply chains, reduce risks, enhance customer satisfaction, improve efficiency, and generate greater profit.
Transparency in supply chains can help transform a company’s operations by improving relationships with suppliers and customers.
Also, the increased visibility in supply chains is valuable in improving internal practices. This opportunity is due to identifying inefficiencies in supply chains that can be addressed.
In addition to these advantages, there are four compelling reasons to enhance your supply chain visibility.
Serves Your Customers
To attract loyal customers, you need to make your products available at the right place and time. Today’s consumers demand fast delivery and the ability to track orders until it reaches their door. SCV is crucial in ensuring that you develop trust, leading to customer acquisition, retention, and satisfaction.
The supply chain represents a big part of a company’s operations and budget. So inefficiencies in a supply chain negatively impact your bottom line. SCV provides the opportunity to identify and address any hiccups in a supply chain, thus eliminating their harmful effects on your balance sheet.
Helps with Added Complexity
Supply chains are becoming increasingly global as technology and infrastructure have provided significant opportunities to tap into markets worldwide. In addition to the many valuable benefits that the global nature of supply chains has produced, it has also made tracking and managing supply chains more challenging.
This is why establishing new systems is critical in meeting new demands. OL USA can help.
The global nature of supply chains involves more bureaucratic processes and regulatory requirements in the procurement, acquisition, distribution, and taxation of commodities. You also need to make sure that your supply chain partners are behaving in a manner that reflects your brand.
SCV helps ensure that these issues are properly monitored and your operations run smoothly.
Ways SCV Can Help Your Business
Only six percent of firms are satisfied with their current levels of SCV, despite supply chain experts ranking SCV as one of their top priorities. So why exactly do supply chain professionals value SCV so highly?
Improved supply chain visibility can help your business in several important ways.
Better Manage the Global Scope of Your Supply Chain
Any given shipment may have over 200 interactions involving more than 30 persons along its journey. And we all know how challenging it can be to track goods when many players are involved.
Businesses face risks, and their brand reputation is at stake as products travel from the supplier to end-users. This flow is particularly important for perishable goods that require special care to ensure their quality.
This is one of the primary advantages of SCV; it helps you and your partners track the flow of goods more effectively.
Identify Workflow Inefficiencies
The absence of real-time information in supply chains can result in business inefficiencies.
For example, over a hundred million hours, equivalent to $1.98 billion, are lost annually in the UK alone in terms of production, acquisition, and freight-management tasks.
If there is real-time monitoring throughout the shipping process, such inefficiencies may be readily eliminated. Additionally, this information allows you to shift from a reactive, contingency-based planning strategy to one that is proactive and be better prepared to handle unexpected events.
As a result, you experience increased revenue, lower fees, and better control over your finances.
Better Handle Unexpected Supply Chain Disruptions
It may be the understatement of the year to say that no organization wants its supply chains to fail, but it’s crucial to plan to reduce risks because no supply chain is immune to breakdowns and disruptions.
For example, a late shipment caused by bad weather conditions or logistics service delays might have a cascading effect on the supply chain’s productivity.
To compensate, a manufacturer may need to stand idle, a retail shop may be forced to work around a product scarcity, or a distributor’s staffing levels may need to be adjusted until the shipment finally arrives.
An organization can have contingencies in place for unexpected disruptions with careful planning and supply chain visibility—access to real-time data results in more accurate forecasts and improved inventory management.
Secure Product Integrity and Trust
Another common issue is that businesses risk their product integrity as goods travel from supplier to end-users. It’s especially critical for perishable goods to be treated with exceptional care as they must comply with unique quality, safety, and legality requirements. Additionally, fragile and sensitive goods should preserve their identity during transport.
Environmental conditions during travel time for these items should be maintained at optimum levels to reduce waste and costs and avoid putting public health at risk.
Companies in major industries such as healthcare and pharmaceuticals must adhere to strict regulations, which might pose additional hurdles if they can’t ensure product safety during shipping.
Eliminate Inaccessible Real-Time Data
Access to reliable data is a critical component in supply chain visibility. Without current and timely data, a business can’t gain insights into its operations and solves supply chain issues they may face.
The lack of transparency in the supply chain and inaccessible real-time data increase risk factors in guaranteeing product compliance, analyzing demand, and determining diagnoses for disruptions.
A firm’s level of supply chain visibility can ultimately determine whether it succeeds or fails. It is crucial for a firm’s overall efficiency and long-term financial performance.
OL USA offers end-to-end supply chain visibility solutions for the effective management of strategic, operational, and financial supply chains. We offer a comprehensive range of services that integrate cutting-edge technology and an innovative data analytics approach that can easily be integrated with your current system.
Contact us today if you want to reduce costs and eliminate inefficiencies and waste in your supply chain.