What every supply chain chief really needs in today’s tumultuous world is an in-house Nostradamus – someone able to peer into the future and head-off yet more disruption, from whatever catastrophes the future has in store for already beleaguered supply chains.
But seers blessed with supernatural insight are rather thin on the ground, at least in B2B circles; I was unable to find even a single one on LinkedIn. And so it is that businesses have to make do with the next-best-thing to make supply chains more resilient: visibility.
Having a clear, end-to-end picture of one’s supply chain at any given moment in time is the goal. As the past two years of conveyor-belt shocks to supply chains have shown us, visibility has never been more important.
Yet knowing what is needed and achieving it are two very different things.
A recent CIPS & Deloitte report into procurement and supply chain resilience shows that rather than being visible, the supply chains of most public- and private-sector organisations are positively opaque.
The thrust of the report was that organisations are failing to measure the environmental impact of their supply chains – mainly because they can’t see it – but its findings are symptomatic of a wider trend among organisations that lack supply chain visibility.
Report shows just 13% of firms have supply chain visibility
The report found that just 13% can map their entire supply chain network, while up to 22% have no visibility beyond their immediate suppliers.
So, with this in mind, we asked a supply chain visibility expert to walk us through the business benefits of the ‘Nostradamus effect’, and why it is vital that organisations are at least ready for the future – even if they can’t see it.
Ryan Closser is Director of Project Management & Network Collaboration at FourKites, which connects global end-to-end supply chains through real-time visibility technology to help shippers, carriers, and 3PLs work better together.
Closser says: “In many ways, supply chains are still catching up to the modern technological age, as the lack of real-time data and cross-company collaboration has consistently held back their advancement and evolution.
“For example, if your inbound freight terms aren’t collected, you likely have no visibility into what’s coming into your facilities. This lack of visibility can lead to production delays and downstream stockouts at the point of sale.”
He adds: “A transparent supply chain enables you to see everything, including whether shipments are in transit, in the warehouse or distribution centre, and where they will be later. Extending visibility into every corner of your supply network unlocks business value through a variety of benefits.”
Here, Closser runs us through some of the most valuable benefits.
Better strategic planning
Few companies directly manage their entire supply chain, from raw materials to shipping finished products. By mapping the entire lifecycle and knowing where everything is at all times, companies can better plan for all possible scenarios.
This connection that exists between planning and reliable transit times allows us to be prepared for any change in volume and to attend to the urgency we may have in production changes.
Monitoring and benchmarking execution
Visibility doesn’t just aid planning; it’s critical for measuring the performance of your plan, ensuring that you can gauge the effectiveness of any changes you make in the future.
This gives operating teams more data to monitor operations in their region or site, meaning they can have more productive conversations with providers, as well as being able to drive improvements.
Reduce shipping fees
With hundreds of disparate systems used by carriers and freight forwarders, updates about milestones or ETAs can often come too late or be inaccurate, causing delays or excessive dwell time and, therefore, added demurrage and detention fees.
Visibility allows the underlying logistical issues causing the delays to be directly addressed. You cannot address what you cannot measure.
Improve lead times
Rather than constantly reacting to delays and exceptions, supply chain professionals should regularly examine their network design to identify optimal patterns within their flow of inventory. Such optimisation is useless unless you’re accounting for 100% of your network.
Better supplier collaboration
With deep visibility and data, you can answer critical questions about your supplier base. Questions like: How many suppliers make the most sense? Are my suppliers collaborative?
Being a preferred supplier is a big deal for many organisations because it helps them grow.
Increased customer and partner satisfaction
Imagine being able to proactively communicate to customers or address an issue before it becomes a problem. When employees have real-time insight into every shipment, everywhere – regardless of who owns the container or warehouse it’s in – they can.
The better you can collaborate and integrate with your carriers, the more effective you'll be at delivering on your customers expectations, which is, in the end, what it's all about.
Happy customers means happy employees. No one wants the mind-numbing task of manually tracking and tracing each shipment, and even less desirable is doing so after being yelled at by an angry customer.
The ability to track details at stock-keeping-unit (SKU) level – across both managed and unmanaged freight – with network visibility can enhance warehouse and labour productivity.
Optimise reverse logistics
Returned items are likely a black hole in your network – this means that 15% of your inventory is unaccounted for. Where a specific part or a SKU order with a vendor might take weeks, you could already have it in a bulk load somewhere within your network.
By gaining full visibility, you can improve command over inventory and, on top of that, reduce the credit cycle by knowing when shipments change custody.
Strengthen your sustainability strategy
The thing about Scope 3 emissions is that many of the largest sources are the ones over which a business has little-to-no direct control. But investing in greater visibility helps you spot where inefficiencies are occurring so that you can influence a better outcome and hit your sustainability targets.