The global pandemic has exposed the vulnerabilities in the supply chain and emphasised the importance of having visibility and control over the distribution process.
Supply chain visibility refers to the capability to monitor the movement of goods and services in real-time from the point of origin to the point of consumption. It enables companies to make informed decisions, mitigate risks, reduce costs, and improve efficiency.
In this article, we will discuss the fundamentals of supply chain visibility, its types, importance, components, best practices, and industry-wise case studies.
Fundamentals of Supply Chain Visibility
Supply chain visibility involves tracking and monitoring of products as they move through the various stages of the supply chain, from raw materials to finished goods.
The fundamentals of supply chain visibility include tracking inventory levels, production schedules, shipping routes, delivery times, and cash flow. By keeping a close eye on these parameters, businesses can ensure that they are operating efficiently, meeting customer demand, and staying competitive in a fast-paced marketplace.
The visibility data is collected in real-time from various sources, such as RFID tags, barcodes, and GPS trackers and are further analyzed to provide actionable insights.
The goals of supply chain visibility can vary depending upon the organization’s specific needs and objectives. However, some common goals include:
Improving supply chain efficiency and reducing costs: By having better visibility, organizations can identify inefficiencies, streamline processes, and reduce waste, which leads to cost savings.
Enhancing supply chain adaptability and responsiveness to changing market fluctuations: Visibility allows organizations to monitor and respond to changes in demand, supply, and other market factors, enabling them to adjust their supply chain operations accordingly.
Increasing inventory accuracy and reducing stockouts: With improved visibility, companies can maintain more accurate inventory data, helping them to prevent stockouts and minimize excess inventory.
Improving customer satisfaction and loyalty: Supply chain visibility can lead to better order fulfillment, on-time deliveries, and more accurate ETAs, which can enhance customer satisfaction and build loyalty.
Mitigating supply chain risks and disruptions: Enhanced visibility allows organizations to identify, assess, and mitigate risks that could impact their supply chain, such as supplier performance issues, geopolitical events, and natural disasters.
Types of Supply Chain Visibility
Each type of supply chain visibility provides unique insights into different aspects of the supply chain. Organizations must make informed decisions to prioritize their operations based on business objectives.
Here are the different types of supply chain visibility:
Location Visibility allows organizations to track the physical location of goods as they move through the supply chain. It involves the use of Internet of Things (IoT) technologies such as GPS, RFID, and sensors to monitor the movement of products and provide real-time updates on their whereabouts.
Impact: Improve logistical accuracy and order tracking
Cost visibility involves tracking the costs associated with each stage of the supply chain, from raw materials to finished goods. It provides organizations with a detailed view of their supply chain costs, enabling them to identify areas where costs can be reduced and efficiencies can be improved.
Impact: Optimize expenses and boost bottom-line
Time visibility involves tracking the time it takes for products to move through the supply chain, from the time they are ordered to the time they are delivered to the customer. It provides organizations real-time data on lead times, transit times, and delivery times, enabling them to improve order fulfilment rates.
Impact: Meet delivery TATs and customer satisfaction
Activities and Records Visibility
It provides organizations with real-time data on the activities of each transaction, such as orders, shipments, receipts, and payments and enables them to maintain documentation and address issues before they become problematic.
Impact: Mitigate risks and stay compliant
Key Components of Supply Chain Visibility
The key components of supply chain visibility include producers, vendors, warehouses, transportation companies, distribution centres, and retailers.
Let’s deep dive into these components and examine how they contribute to overall supply chain visibility.
Producers: Tracking the production processes of raw materials and manufacturing to ensure efficiency and timely production.
Vendors: To ensure that goods are available when needed, it is essential to monitor the movement of goods from multiple vendors to manufacturers and have real-time visibility into their inventory.
Warehouses: Tracking inventory levels and delivery times to ensure a sufficient stock to meet demand.
Transportation Companies: Real-time monitoring of the movement of goods ensures that transportation companies deliver goods on time and in good condition, increasing customer satisfaction.
Distribution Centers: Effective tracking of inventory levels, delivery times, and order accuracy helps ensure efficient operation, minimizing delays, and costs.
Retailers: Tracking sales data to avoid stock-outs to meet demand and quickly replenish inventory when needed.
8 Best Practices for Achieving Supply Chain Visibility
Establish clear guidelines and expectations for data quality and ensure data is accurate, timely, and relevant
Utilize a cloud-based supply chain control tower to centralize and share data in real-time
Invest in advanced technologies like IoT and RFID to track shipments and assets in real-time
Digital supply chain involves leveraging data analytics and machine learning to identify patterns and insights that can help optimize supply chain operations and improve decision-making
Use visualization tools and dashboards to make data accessible and understandable to stakeholders, and to facilitate communication and collaboration
Continuously assess and monitor supply chain processes to identify areas for improvement and track progress towards goals
Ensure data security and implement access controls to protect sensitive information and prevent unauthorized access
Foster a culture of transparency, accountability, and collaboration among stakeholders to ensure that supply chain visibility is prioritized and maintained
Case Studies: How Different Industries Benefit from Supply Chain Visibility
Supply chain visibility can have a significant impact on different industries. With real-time visibility of inventory, orders, and shipments, businesses can optimize their supply chain, reduce operational costs, and improve customer satisfaction.
Here are some examples of how different industries benefit from supply chain visibility:
Supply chain visibility plays a critical role in the retail sector, where product unavailability can result in a loss of sale. By having visibility into inventory levels, delivery schedules, and shipping times, retail companies can better plan for demand and ensure that they have enough inventory across all brands, sizes, and colours.
Walmart, for instance, implemented a system that tracks delivery trucks, enabling them to redirect shipments to the stores that need them the most. This ensures that products are available when customers need them, reducing the likelihood of stockouts and loss of sale.
Consumer Product Goods (CPG)
The Consumer Product Goods (CPG) industry provides goods to a range of entities, including distributors & retailers (general trade), large format chains (modern trade such as DMart, Spencer’s, and More Retail), and e-commerce platforms (such as Amazon, Flipkart, and Blinkit). Supply chain visibility is critical for the CPG industry to ensure the timely delivery of goods, minimize waste and inventory costs, and maintain product quality.
Raw Material Delivery: Anticipate delays in the delivery of raw materials, allowing CPG companies to take corrective action and minimize the impact on production
Production Planning: To match production planning to demand, minimizing excess inventory (wastage) and avoiding shortages (loss of sales)
Efficient Warehousing: Improve efficiency from automation to eliminate manual errors
Tracking Trucks in Transit: To ensure the timely delivery of goods and to maintain product quality by reducing the risk of damage or loss.
E-commerce companies have faced an increasing demand for fast and reliable delivery, and supply chain visibility plays a crucial role in meeting this demand.
By leveraging real-time data and analytics, e-commerce companies can improve their inventory management, optimize shipping routes, and provide more accurate delivery estimates to their customers.
Amazon has a vast network of warehouses and fulfilment centres, and they rely on advanced technology to manage their supply chain. By tracking the movement of goods in real time, they can anticipate and quickly respond to disruptions, such as weather delays or traffic congestion. The tracking is enabled through a Smart Lock – an Internet of Things (IoT) device – that not only provides real-time location coordinates but also ensures deliveries without any pilferage. Overall, the process enables them deliver packages faster and more efficiently, while also providing customers with accurate and up-to-date delivery information.
Enhancing Visibility with Supply Chain Management Software
Implementing supply chain visibility can be challenging for companies due to the complexities involved in collecting and analysing data from various sources.
This is where supply chain management tools come in. These are a combination of software platforms that help businesses manage and optimize their supply chain operations. They enable businesses to monitor inventory levels, track product movement, and manage production, logistics, and delivery schedules.
Supply chain management platforms typically include features such as inventory management, order processing, logistics management, and data analytics. One of the most significant areas is transportation.
Intugine is a cloud-based transportation management platform for managing multimodal visibility within the supply chain. The platform enables companies to track and monitor their shipments in real-time, providing insights into the status of each shipment and alerting any potential delays. The platform uses advanced analytics to analyze data and provide actionable insights. Unlock the full potential of your supply chain! Book a personalized demo with one of our supply chain experts today and discover how greater visibility can transform your business..
In conclusion, the importance of supply chain visibility cannot be overstated, especially in today’s fast-paced and uncertain business environment. Different industries can benefit from supply chain visibility, as seen in the case studies. As the business environment continues to evolve, organizations must prioritize supply chain visibility to stay competitive and meet customer demands. By implementing the best practices and leveraging the latest technologies, businesses can optimize their supply chain operations and achieve long-term success. Supply chain management software, such as Intugine, can help businesses achieve visibility by providing real-time tracking and analytics.