What Is Supply Chain Visibility and Why Is It Important?

by Josh Biggs in Ecommerce on 31st August 2021

As you have been indulging in the world of the supply chain, you might have come across the “supply chain visibility” term. These terms are still in the same circle as the supply chain meaning.

The supply chain has its own uniqueness so that each case can be different from one country to another. But if you have been working in a particular industry where the supply chain is strongly relevant, it should not be surprising that disruptions in this category have been the long-lasting problems that many companies are facing.

There are some factors that can cause problems in the niche, including natural disasters, extreme weather conditions, inventory problems, logistic problems, crimes, and so on.

Experts suggested that these pitfalls and loopholes took place due to the poor quality of supply chain visibility.

For example, a corporation could not be aware of the precise location of its suppliers. As a result, they were unable to predict when the things they had purchased would arrive at their destination address. It’s also worth noting that the covid-19 limits have made shipping and logistics more difficult, which has a knock-on effect on the smoothness of the distributions.

Before going further, it is important to understand the supply chain visibility first.

What is supply chain visibility?

In a nutshell, supply chain visibility is the method of tracking supplies from suppliers and manufacturers through the particular organization supply chain visibility tools to the customers. The old definition was too narrow because it usually worked in the B2B environment.

But now, one can also use the term to describe the same thing in the retail environment. That includes G2B, B2B, as well as B2C. In retail, which involves business and clients, this can mean the tracking abilities of the suppliers to the end-users or customers.

If the SCV is of high quality, it will be possible for the person in charge to retrieve all of the important information about each order, including its receipt, the status of its materials, the status of its supplier(s), the manufacturing programme, the delivery dates, shipping details, and the customer information.

It is necessary to have the correct information available in real-time in order to achieve “visibility.” That means that those who have access to the material must be kept up to date with the latest developments.

It is critical to be able to structure the current status of all components in the supply chain in order to be successful.

Manufacturing professionals must design the most efficient stocking and delivery procedures possible. This is a critical task.

It is critical to have a solid workflow and integration between the manufacturing organisations, suppliers, and distribution networks. Each system should speak in the same language so that it is possible to determine the location and status of a certain order at a glance.

Clients will be able to check on the status of their orders with confidence because of the high level of visibility. When a disruption occurs, the integration of the systems of the parties concerned will allow for problem solutions to take place. As a result, it is critical that all parties involved in the order transaction agree on the same common ground and methodologies to be used in the transaction.

Why is supply chain visibility important?

Nowadays, there are thousands of global supply chain professionals who have been struggling with logistical issues. The supply chains in modern times have never been simpler because of certain uncontrolled factors, such as cross-border policies, transportation, cost of fuel, paperwork, and so on.

According to the findings of the study, just six per cent of the organisations examined were able to declare that they had achieved complete visibility of all supply chain elements, including internal, inbound, and outgoing components. Unfortunately, the companies who claimed this visibility have chosen not to reveal their identities, so we are unable to verify the authenticity of the information provided to us by them.

However, we can conclude that increasing visibility is extremely important because it has a high correlation with product availability and delivery turnaround time.

Despite the fact that only 6% of organisations obtained complete visibility, only a handful of companies achieved half of that. It is not an exaggeration to state that clients are completely unaware of the current status of their items. When objects are fully visible, it is undeniably a significant improvement in quality. These accomplishments have the potential to reduce errors and lower total supply chain operating costs across all processes.

Techniques and Tools to Enhance Supply Chain Visibility

The complexity of the supply chain is a major challenge for every company. Just like in the other premises in the company, there is no one-size-fits-for-all solution. It will be down to the main objective of the organization or company.

The goals must be realistic in accordance with the current organizations’ available resources, technology, systems, as well as expertise of the people. In many cases, the existence of third-party logistics is very important. A company that wants to have a high SCV must work with a logistics specialist who can understand their main objective.

The deployment of supply chain visibility software has become increasingly crucial in recent years. Suppliers, logistical partners, and software developers must all support this adoption approach.

EDI processing, also known as electronic data interchange, is required in order to read the information from the supplier.

The other technique is to employ a specific supply chain modelling software package that has the capability of retrieving and processing information from a data storage system or database.

When it comes to direct tracking, the Internet of Things will be beneficial. It is extremely conceivable to integrate complex components into trackings, such as RFID, Internet of Things sensors, and tracking networks, depending on the availability of resources.

It is possible to monitor additional metrics through the use of IoT sensors, including temperature, moisture content, and weight, among others.

Facilitates Forecasting

So, what’s next?

If a particular company can make use of supply chain visibility, it is imperative to facilitate demand management.

Demand management is a process of predicting future demand. With this activity, a supplier can keep their inventory in check so that they can deliver the supplies to the clients without any hassle.

The SCV can really give real-time insights for demand prediction. Therefore, organizations can drive more revenue and improve their pricing plans.

Categories: Ecommerce