Top Operational Challenges Solved Through Supply Chain Visibility Solutions

Supply Chain Visibility is defined as a solution that gives a clear, end-to-end view of the movement of inventory and is a prevalent topic in the industry and has been for some time. Supply chain visibility solutions enable proactive decision-making and effective risk management. Specifically, it provides the data and metrics necessary to improve and control process around ordering, inventory, partner relationships, customer service, and risk.

Companies who lack visibility across their supply chain find it incredibly difficult to effectively manage their flow of goods, and there is no lack of tools that claim to provide that end-to-end visibility everyone wants. Over the years many companies have invested significant amounts of money to address their visibility issues yet most are still searching for a better option. The problem is not with the tools themselves but the fact that they are providing information based on inaccurate and incomplete data.

As the Supply Chain scales that inaccurate data increases exponentially and effects each and every one of the top ten challenges of the supply chain. We’ve aggregated the top pain challenges of supply chain management from our clients and the role visibility, and more importantly, accurate data plays in each one.  

Customer Service

Customer service depends on the ability to provide customers with as much information as possible and delivering the right product in the right quantity at the right time and place. Good customer service also depends on how much visibility is provided and whether delays, mishaps, and changes are communicated before they cause issues for the customer. Without proper visibility outstanding customer service is near impossible. Companies that have begun to invest in technology and tools to transform their supply chain and improve their visibility will rise above those that don’t because they will be able to provide and share accurate data with their customers.

Cost Control

Costs are affected by external factors as much as they can be by internal factors. For example, rise in fuel costs, increasing number of global customers and government regulations affect costs as much as an increase in the price of raw materials and shipping costs can. Business intelligence is the solution to this problem, but is only plausible when there is visibility within a company’s supply chain.Technology allows for more visibility which in turn provides the information necessary to make sound judgements and improve cost control.

Risk Management

Mitigating risk is crucial because a small disruption from a localized event can have extreme consequences. Such disruptions can materialize from both inside and outside the organization and vary in their effects. External risks are out of the company’s control and driven by events either upstream or downstream in the supply chain, while internal risks are within the company’s control and can be reconciled. Visibility provides detailed insights and fosters improved risk management allowing providers to forecast what may happen within their supply chains and how they can manage such events before they cause disastrous consequences.

Digital Transformation

The need for companies to invest in technology and begin the transforming their supply chain is imperative as we move towards a more digital world. Archaic ways of gathering, processing, and analyzing information will no longer be enough to keep up as customers become more demanding. To meet requirements and build agility and responsiveness into supply chain, visibility is crucial. Without it, companies will struggle to satisfy customers and remain profitable.

Data Quality, Security, and Management

Data powers supply chain visibility and without it companies cannot gather enterprise-wide insights into their global supply chains. Data has become an important tool in creating a balanced and efficient supply chain, yet most of the data needed to do so is scattered across various systems, entered in different formats, and impossible to view all at once on one screen. Current management of data is very manual and gathered from many different sources including carrier sites, internal notes and spreadsheets, resulting in internal and external silos that limit functionality.

Inventory Management

Visibility with respect to inventory management means knowing where inventory is at any given time and how well goods can be tracked as they move from the manufacturer to their final destination. When this information is readily available it enables quick responses to any disruptions within the supply chain. The best visibility tools offer predictive insights that allow for proactive solutions - like recalculating demand and redirecting supply whenever, and however, it is necessary. For example, with increased visibility mishaps are more readily anticipated and buffer stock can be preemptively dispatched or redirected to hit delivery windows. As a result, customers are happy and the amounts of buffer stock can be reduced, resulting in a leaner process. Without precise knowledge of actual consumer demand, inventory, and shipments, agility and responsiveness are impossible. Proper supply chain visibility helps cut risks, improve speed to market, reduce lead times, and help identify shortage and quality problems along the supply chain.

Relationship Management

Like any other proactive action in business, performance and trends must be monitored in order to make smart decisions. Buyer-supplier relationships play a large part in performance quality. For this reason, gauging performance and building a standard for high performance where communication, transparency, and visibility are valued is important for a company’s success and healthy business relationships. Companies that focus on their data and metrics have substantially better visibility and as a result form better relationships with their partners that can be leveraged to gain competitive advantage and become leaders within the industry.

All of these challenges must be met in order for companies to continue to create value for customers. Carrying out a very focused and honest review of a company’s supply chain partners, overall performance, and customer service metrics can pay big dividends, help identify internal and external drains on the company and inform any restructuring that may be necessary.

Many underperforming companies also have underperforming supply chains and accompanying customer service challenges, which more often than not, is the result of poor visibility. These negative outcomes can result in increased operating costs, loss of revenue and impacts on customer service which all affect earnings. Conversely, successful companies are very good at leveraging supply chain visibility and partner relationships to stay ahead of the game and establish themselves as industry leaders.

Nandini Nallasivan