A Closer Look at Supply Chain Visibility
Supply chain visibility can mean different things. This depends on business goals, strategic priorities in the supply chain or simply greater insight into specific areas of the supply chain where traditionally there has not been a focus.
Supply chain software provides a holistic structure to incorporate data from within and outside a business, giving it an end-to-end view and opening the door to other business benefits, such as reduced transportation costs and an improved customer experience. What might supply chain visibility look like? For some, visibility is simply EDI, while for others it means a clear view of the current status and relevant history of orders, shipments and inventory and the variety of fluctuations that can happen across their varying life cycles.
For most organizations, visibility is derived from data taken from these various points of the supply chain lifecycle, and having that data integrated into one system of record is essential. One of the challenges, however, is that some relevant data may be generated by systems outside the company’s control, such as by a third party vendor. For example, if a company wants to know the status of an order being fulfilled by a vendor, it is reliant on that outside vendor to provide that information. And once it is provided, it must be accurate and clear in order to be useful.
Impact of Omnichannel on Supply Chain Visibility
Omnichannel has had a huge impact on operations and business models. But it has also had a tremendous impact on the need for supply chain visibility.
When a company has a more granular understanding of its inventory, it has far more ability to take advantage of that information. Visibility into inventory allows a company to do a better job accessing that inventory to fulfill a customer order, change transportation routes and balance supply and demand using market conditions. But before that can happen, a business needs data from a number of different channels and processes: from its warehouses, its stores and its finished goods supplier or manufacturer as well as from freight forwarders, 3PLs and local carriers. If this data cannot be consolidated and rationalized, a company is failing to exploit significant business value. With data as a primary resource, the architecture—how one collects and aggregates the data to make sense of it—becomes critical. The back-end systems that support and maintain the data must be open and able to accept input from different sources and in different formats.
Even something seemingly as abstract as social media data will begin to join more traditional types of data as companies seek to gain a holistic perspective of their supply chain. In addition, another common data stream is GPS feeds from computers aboard trucks or vessels, which can augment the status of shipments. By tracking any deviations in these data sets, logistics professionals are able to react and adjust more effectively than if they’d used traditional reporting methods that may not be available until weeks later.
Treat Visibility as a Long-Term Goal
Companies should view supply chain visibility as a journey—not as a single, overarching project but as a series of smaller initiatives with greater overall visibility as the final goal. Because supply chain visibility generally carries a long lead time before showing return on investment, taking on smaller components incrementally is usually a company’s best approach for getting these initiatives funded. For instance, a company can identify a particular pain point in the supply chain lifecycle or a business problem and build a visibility project to address it. These smaller projects take less time to formulate and report on to others in the business, increasing the likelihood of additional supply chain visibility initiatives being approved.
The flow of data is only increasing for businesses. Gaining visibility will become a more acute priority as supply chain and business leaders seek more value from their data, but it is unmanageable without the right tools in place for professionals to use to access and understand it.