How Can Businesses Achieve Supply Chain Visibility?

As businesses deal with many products with multiple suppliers and logistics partners spread globally, they face higher risk from supply chain inefficiencies. But how do you define and recognize inefficiency in your supply chain? Let us begin by asking a few questions.

Is there a lack of communication between the supply chain stakeholders?
Do your products reach late to the customer?
Do the customers receive the wrong items which they have to return?
Have you met all the legal and ESG compliances in your country?
Do you know where you are spending every dollar across the supply chain?

If you are facing one or more of these problems, you may not have end-to-end supply chain visibility.

What Is Supply Chain Visibility?

Supply chain visibility (SCV) is a business’s ability to view and track every touch point in its supply chain. This includes all the steps between placing an order, receiving the raw materials, and delivering the final product to the end customer. Supply chain visibility aims to make real-time data available at every step so that the team is accountable and can make informed and data-driven decisions.

Types of Supply Chain Visibility

The following types of supply chain visibility have a direct impact on a business’s fundamentals, such as profitability and statutory compliance –

Rate visibility – This is the rate or cost of cargo transportation. Given the large number of customers, multiple geographical locations, cargo companies, and high order volumes, rate visibility has become increasingly complex.
Shipment visibility – The location of cargo is a fundamental part of SCV. It helps businesses decide when to schedule, repurchase, deliver products, and make timely payments. These factors improve operational efficiency and greater customer satisfaction, given they can track their shipments at each step.
Demand and supply visibility – Accurately forecast the market demand and align the supply accordingly so that there is never a short supply of items. End-to-end supply chain visibility shows you the bottlenecks you can handle before they disrupt the supply of goods.
Inventory stock visibility – Depending on the demand and supply, you can stock the inventory in the warehouse. It ensures that neither there is a shortfall nor overstocking of any item, thus always keeping a healthy cash flow and stock availability.
Activities visibility – Transparency within the supply chain includes tracking quotes, e-way bills, bills of material, order receipts, proof of delivery, payments, and more. It also includes managing, analyzing, and sharing that information with relevant stakeholders. This helps organizations trace each order throughout the supply chain with accuracy and react promptly to any problems.

Importance of Supply Chain Visibility

Supply chain visibility keeps operations sharp and smooth. It helps achieve greater customer satisfaction, growth, and compliance. One can summarize the importance of these 4 Cs –

Complexity

Modern supply chains are large and complex, comprising diverse supplier networks and logistics companies. You need the right supply chain management software and KPIs for end-to-end SCV that helps establish transparency and trust.

Compliance

Both domestic and international supply chains have steep compliances to meet, including trade agreements, government tariffs and taxes, procurement rules, and sustainability norms. You also need to consider your brand’s reputation and ethical business. SCV helps companies monitor and manage all variables, including money exchange rates, political and social unrest, weather changes, etc.

Customer

Customer satisfaction depends on multiple factors, such as delivering the right product at the right time, an efficient cancellation and returns policy, and great customer service. Additionally, companies can provide direct supply chain visibility to the customers so that they know where their order is.

Competence

Supply chains comprise a bulk of the company’s operating budget. Any inefficiency can directly impact the bottom line and the ability to compete in the market. SCV lets companies quickly spot and fix problems that could potentially cause a loss of revenue.

Lastly, supply chain visibility helps companies meet environmental, social, and governance (ESG) obligations. Up to 80% of greenhouse gas (GHG) emissions happen within the supply chain rather than the production itself. By working closely with suppliers and logistics partners and with a clear SCV, you can meet the ESG compliance goals that apply to your geography.

What Are the Issues Affecting Supply Chain Visibility?

Businesses that overlook the significance of Supply Chain Visibility (SCV) or fail to implement it put themselves at risk of operating with diminished efficiency, resilience, and agility levels. The common challenges any business could face in SCV are –

Multiple supply chain management systems inside and outside the organization.
Teams and verticals work in silos with minimal or no communication.
No access to real-time supply chain data.
Lack of efficient communication between the supply chain partners and business decision-makers.
Ad-hoc/maverick spending on procurement that is unauthorized.
Poor inventory, order, or warehouse management.
Difficulty in anticipating internal and external risks.
Lack of relevant technology and digital transformation due to lack of funds or resistance to change within the team.

How To Achieve Supply Chain Visibility Using the Best SCM Software?

Supply chain management software collects important information from every touchpoint and layer within your supply chain. It presents this complex information in a quantifiable manner that is easy to understand and analyze.

Choosing the best SCM software depends on your business needs. A simpler SCM software may not fulfill the needs of a large business, and a complex system may be unnecessary for a small business. Here are some of the key functionalities you should look for in SCM software to achieve supply chain visibility –

Capture complex data onto a digital control tower from diverse data points.
Automatically analyze the data based on pre-defined rules and present it as per the KPIs.
Share the data easily within and outside the department with relevant access control.
Categorize the supply chain according to specific processes, products, or categories.
Identify and flag ESG issues before they become more significant risks.
Use technologies such as artificial intelligence (AI) for predictive analysis.

Conclusion

Defining real-time supply chain visibility can vary across different businesses. To ensure successful implementation, it is crucial to begin by clearly outlining the desired end goals and then collaborate with a supply chain management partner to implement the appropriate technology in a reverse-engineered approach.