The Importance of Supply Chain Visibility

By: David Adams, Director, Business Intelligence and Project Management, Unyson

David Adams, Director, Business Intelligence and Project Management, Unyson

When it comes to business lack of information leads to decisions based on guesswork or rules of thumb. This, in turn, can cost your company money and customer goodwill. Supply chain visibility makes it possible to make fact-based decisions quickly, so you can optimize results. According to research firm Gartner, “Supply chain leaders can improve performance and lessen risk by using multi-enterprise, collaborative software for real-time insights across the value network.” Here are a few ideas about how supply chain visibility can help you improve business outcomes.

Balance Supply and Demand

Customer requirements change quickly, which can leave you with excess inventory unless you quickly take steps to cancel or delay your own orders for materials. Supply chain visibility provides the insight you need to make the right decisions to prevent excess inventory.

You can also use insight to orchestrate demand. Knowing where you have excess goods can help you decide to run promotions or sales to recover the right balance.

“Supply chain visibility makes it possible to make fact-based decisions quickly, so you can optimize results”

Rapid Response to Supply Chain Disruptions

It’s a fact of life that problems happen, but natural disasters, labor strikes or political turmoil can cause unplanned interruptions in your supply chain. Aberdeen Research reports that the three most common supply chain disruptions are damages, late goods, and quality issues.

Having real-time visibility into the entire supply chain enables you to make rapid decisions about changes in schedules or working with alternate suppliers to ensure stable supply. You can also proactively notify customers so they can postpone sales or issue rain checks to their customers. Being proactive helps in gratifying customers with your service. They may not be happy about the delay in delivery, but they will appreciate the insight so they can make their own fact-based decisions.

Optimize Processes

It’s possible to optimize individual steps in the supply chain yet end up with a sub-optimum supply chain. The result? Longer lead times, more inventory and higher overall costs.

When you have visibility into the entire supply chain, you can work with your full supplier base to optimize processes. You may find ways to increase communication and make overall processes simpler.

Improve Long-Term Planning

As you work with customers and suppliers to optimize your supply chain, you gain visibility into future needs. Seasonality, promotions, new brick-and-mortar store openings, even launching a new e-commerce site can all affect demand. By working together on future visibility, you may uncover the need for increased headcount, new equipment or a second shift well before the need reaches crisis proportions.

Increase Customer Satisfaction

Companies with the most supply chain visibility outperform their competition. Aberdeen Research reports that in retail supply chains, best-in-class companies received perfect orders 95 percent of the time, while all others only achieved an 86 percent rate. Best-in-class companies also decreased their out-of-stock situations by 9.9 percent, while other companies suffered with a slight increase in stock-outs.

This means that your customers will achieve better results in their own businesses when you improve your supply chain visibility. In turn, they can increase satisfaction in their own customer base.

Manage Global Suppliers

Supply chains today are global, and that can extend lead times. Visibility into shipment and customs status can improve your planning, allowing you to optimize production and shipping schedules. As a result, you will have less unplanned downtime, more complete shipments, better customer service, and lower overall costs.

These are just a few areas where supply chain visibility can improve your performance. You will achieve better performance to schedule, ship more perfect orders, and reduce excess or obsolete inventory and associated carrying costs. It is well worth the effort to orchestrate your supply chain for maximum visibility.