Supply Chain Visibility – Essential to Efficiency & Results

If your supply chain is a network of closely aligned moving parts, then doesn’t it make sense that if a breakdown occurs, it’d be easier to fix the problem if you could tap into each individual part to find out exactly where the failure was occurring?  The alternative, of course, would be having no control over your supply chain, and having to dissect the chain, link by link, until you found the source of your problem.

Thankfully, the “roll the dice” approach to supply chain management has become outdated, as new technology and logistical capabilities are giving businesses unprecedented insight into their component parts.  Businesses are increasingly realizing the value of having visibility into each part of their supply chain, so they can ensure the net result is a well-oiled, well-functioning machine.

But what exactly do we mean when we refer to “supply chain visibility?”  A survey by Capgemini consultants of executives from 300 leading companies worldwide, defined visibility as “knowing where products and inventories are, being able to monitor order progress, and being able to anticipate unplanned events in the supply chain, like delayed transport or non-conformance quantities in the production process of subcontractors.”  Supply chain visibility was so important for this group, that 45 percent ranked “improving supply chain visibility” as their top concern.

For many businesses though, gaining insight into the supply chain is easier said than done.  But it doesn’t have to be that way.  A number of relatively straightforward solutions are available to help achieve enhanced visibility:

  • Choose the Software option that’s best for you: Not surprisingly, technology is key to having insight into the many different suppliers and businesses that make up the typical supply chain.  But not every software solution is suitable for every business need.  You’ll need to shop around, and ask a lot of questions.  Of course larger businesses can afford to have customized software solutions designed to meet their exact specifications, but most businesses will need to adapt “out of the box” solutions as best they can.
  • Cloud Technology: A relatively new concept in logistics management, cloud technology allows a business to “rent” space on an outside server, and to store any and all data on that server.  A business can then allow outside vendors access to that stored information, so that each party can update records and be aware of the status of certain shared projects.  For supply chain managers, cloud technology is rapidly becoming a preferred way to track shipments – with small-to-medium sized businesses expected to spend $100 billion on cloud computing by 2014.  A huge advantage of cloud technology is that it allows businesses to access customized software – the costs of which are shared by fellow users — without having to shoulder the costs alone.
  • Logistics Provider Expertise: A good logistics provider will offer a high degree of visibility so that you can pretty much have 24/7 access to your shipment’s whereabouts.  This is particularly important if you’re shipping to Canada, and your shipment will need to not only clear the arduous Canadian border clearance process, but also enter a Canadian distribution network.  Be sure that your carrier (a) can offer 24/7 visibility for the entire transit cycle; and (b) will keep control of your shipment for the entire cycle, and that it will not be offloaded to an unknown third party.

With a solid supply chain visibility process in place, a business can better manage inventory, and more proactively plan for unexpected disruptions:

  • Coordinated deliveries: If your business relies on components from several different providers, visibility will allow you to coordinate schedules so that materials arrive when you need them.
  • Global Coordination: As today’s supply chains become increasingly global in nature, it can be much more difficult to manage vendors located in different parts of the world.  With a good technology solution in place, vendors can easily provide project updates and transit status reports.
  • Weather: While the 2011 Japanese earthquake stands as a worst-case scenario for weather-related effects on supply chains, it’s important to plan for the unexpected.  If your supply chain includes manufacturers or warehouses located in snow-prone states, make sure you have a Plan B in place to keep your materials moving.  Similarly, hurricane season comes every year – rather than take a chance that your supply chain won’t be affected, work with your logistics carrier to develop an alternative should you suddenly find that your preferred network is unavailable.
  • Infrastructure Delays: When the city of Los Angeles shut down a critically important section of the 405 Freeway last summer, many feared a traffic-crippling “carmageddon” would ensue.  While good advance planning helped to avert the disaster, the potential existed for major disruptions.  Would your supply chain have had alternate plans in place?  Major highway and bridge closings are usually publicized weeks in advance by state or federal highway departments – but the key is to make sure your aware of the information, and make necessary adjustments.
  • Labor Disputes: What if one of your key parts suppliers faced a strike by one of its labor unions?  It’s essential that you are aware of all potential labor disruptions among your suppliers, and that you have a plan in place to minimize any impact on your supply chain.

Supply chain visibility allows a business to see the many moving parts that comprise its operations.  Businesses are now able to pinpoint problems –even anticipate problems – and have fixes available before any serious disruptions occur.  And for many businesses, control of the supply chain is also a competitive advantage, since operations run much smoother, with less redundancies and a higher degree of accountability.