What is Supply Chain Visibility and How to Achieve It?

Key Takeaways

• Supply chain visibility refers to the ability to track and monitor the flow of goods, information, and processes throughout the supply chain. It enables organizations to have a real-time, end-to-end view of the supply chain, from the sourcing of raw materials to the delivery of products to customers.

• The benefits of supply chain visibility can be boiled down to four key factors: dissect complexity, ensure compliance, improve customer satisfaction, and increase competitiveness.

• The 4 key elements to achieve high supply chain visibility include a single source of truth for the operational data, immediate alerts to identify supply issues, historical data to facilitate improvement & forecast, and simulation of alternative plans to see the next best actions.

What is supply chain visibility?

Supply chain visibility refers to the ability to track and monitor the flow of goods, information, and processes throughout the supply chain. It enables organizations to have a real-time, end-to-end view of the supply chain, from the sourcing of raw materials to the delivery of products to customers.

Supply chain visibility is enabled by supply chain management technology, which provides real-time data on logistics and other aspects of the supply chain. Companies use these data to manage inventory shortages, prevent bottlenecks, comply with regulations, and track products through to delivery.

A Deloitte report found that just 13% can map their entire supply chain network, and that up to 22% have no visibility beyond their immediate suppliers. There's a long way to go on supply chain visibility, but digital transformation is crucial if firms are to thrive.

4 Reasons why supply chain visibility is important

What makes supply chain visibility so important? The ability to gain insights into the inner workings of a supply chain can inform operations, improve customer satisfaction, ensure compliance, and drive company growth. Ultimately, the benefits of supply chain visibility can be boiled down to four key factors, which we refer to as the "four C's":

Complexity

Modern supply chains are global in nature, with a diverse network of suppliers and partners. Achieving visibility across this complex network requires not only the right software and key performance indicators, but also a level of trust and transparency. Without visibility, logistical issues can arise that may damage customer relationships and erode profit margins.

Customers

Meeting customer demands is critical to business success, and this requires having the right products available at the right time and location. Customers expect fast delivery and the ability to track their orders from loading dock to doorstep. By providing supply chain visibility, companies can improve customer satisfaction, retention, and acquisition.

Compliance

International supply chains are subject to a range of regulatory requirements, including changing trade agreements, procurement rules, and government tariffs. Additionally, companies must ensure that all partners within their supply chain are behaving ethically to maintain their brand reputation. Supply chain visibility allows companies to monitor and manage variables such as monetary exchange rates, extreme weather, and political or social unrest that could delay shipments and impact compliance.

Competitiveness

Inefficiencies within the supply chain can have a direct impact on a company's bottom line. Given that the supply chain often represents a significant portion of many companies' operating budgets, reducing inefficiencies is crucial. Supply chain visibility enables companies to identify and address inefficiencies throughout the chain, thereby reducing costs and increasing competitiveness.

4 key elements to achieve supply chain visibility

A single source of truth for the operational data

In industries with complex supply chains, such as aerospace manufacturing, there is a vast amount of data to manage. By storing all operational data in one central platform, teams can easily access information without switching between various systems and apps. This saves time and improves efficiency, allowing teams to focus on proactive measures rather than corrective measures to prevent supply issues such as part shortages.

For example, a production controller can instantly know which parts are critical to source, which suppliers to contact, and which customer orders to potentially delay, which enables them to take the necessary actions in a timely manner.

Immediate alerts to identify supply issues

Just knowing what's happening isn't enough - you need to know where the problems are and act quickly. That's why receiving immediate alerts when something goes wrong is crucial for keeping the operation running smoothly. And with recommended actions based on key metrics like OTD, Sales, Inventory, and Planning Adherence, teams can quickly prioritize their response and make data-driven decisions to resolve the issue.

Historical data to facilitate improvement & forecast

When it comes to supply chain visibility, staying in the know is crucial. But sometimes, the past can be just as important as the present - especially in the age of advanced data analytics. By using historical and contextual data about suppliers, equipment, machines, bills of materials, and customers, you can create accurate forecasts for future shortages and risks.

To truly excel in supply chain management, it's essential to have a comprehensive history of issues and solutions for every object in your chain. This knowledge can be invaluable in solving future problems quickly and effectively. By leveraging this wealth of information, you can stay one step ahead of issues and keep your supply chain running smoothly.

Simulation of alternative plans to see the next best actions

Supply chain visibility always serves better supply chain management. However, the unpredictability of supply chain events can leave professionals feeling unsure about their next steps. This is where simulation of alternative plans can prove useful.

More advanced supply chain management technology can also allow users to interact with the data and simulate many prospective scenarios playing with supply events or production events to navigate and optimize the supply chain performance. Furthermore, many users can collaborate live and enrich the simulation with inputs from multiple teams.

For example, for any action that you take, when rescheduling a work order, making a pull-in of a PO or anticipating a customer order, the technology can instantly compute feasibility and the impact on your north star metrics. You can customize which components (PN) to take into account for material coverage status computation, include or exclude events, and even take into account Time Since New (PN aging). By enlisting the help of advanced algorithms, you can compare various plans and choose the next best actions.

This simulation approach provides supply chain professionals with more valid evidence and greater confidence in their decisions, as they can explore multiple scenarios and predict their impact. Moreover, it allows teams to work more collaboratively and efficiently by providing a shared understanding of the supply chain's dynamics.

Conclusion

In conclusion, supply chain visibility has become crucial for organizations to manage their supply chains effectively. With the ability to track and monitor the flow of goods, information, and processes throughout the supply chain, organizations can improve customer satisfaction, ensure compliance, and reduce costs, thereby increasing competitiveness.

However, achieving supply chain visibility can be challenging due to the complexity of modern supply chains. To achieve supply chain visibility, organizations need a single source of truth for operational data, immediate alerts to identify supply issues, historical data to facilitate improvement and forecasting, and the ability to simulate alternative plans. Therefore, companies need to leverage technology to enable real-time data on logistics and other aspects of the supply chain to achieve end-to-end visibility and drive digital transformation for their supply chains.