Supply Chain Visibility: What is it and what should I do about it?
Supply chain visibility refers to tracking and tracing products and materials as they move through the supply chain, from purchase order cut to raw materials mapping to their SKUs to finished goods delivered to the customer. It involves collecting and sharing real-time data across the entire supply chain network, enabling companies to make informed decisions and take corrective actions when necessary. The importance of supply chain visibility cannot be overstated, as it significantly impacts the efficiency, communication, risk management, and customer satisfaction of a company's supply chain. The 2023 CGS Supply Chain report shows that 57% of companies plan to improve supply chain visibility in the coming year.
Why Supply Chain Visibility is Important
Improved efficiency and reduced costs: Supply chain visibility enables companies to identify bottlenecks, reduce waste, and optimize their operations, resulting in improved efficiency and reduced costs. By having real-time data on inventory levels, production status, and shipping schedules, companies can better manage their resources and avoid overproduction, stockouts, and excess inventory. For instance, if a company has visibility into its suppliers' inventory levels and production schedules, it can adjust its production accordingly, avoiding stockouts and reducing the need for safety stock. This results in cost savings for the company, reducing the need for excess inventory and the associated costs.
Improved communication and collaboration: Supply chain visibility allows companies to share real-time data across the entire supply chain network, enabling better communication and stakeholder cooperation. Having a single source of truth for supply chain data allows all stakeholders to have visibility into the same information, reducing the risk of miscommunication and misunderstandings. This improves collaboration among suppliers, manufacturers, distributors, and retailers, resulting in smoother operations and better customer service.
Improved risk management: Supply chain visibility enables companies to identify and mitigate risks, such as disruptions in the supply chain, quality issues, and regulatory compliance. With real-time data on the location and status of products and materials, companies can quickly respond to supply chain disruptions, such as delays or quality issues. This reduces the risk of stockouts and improves the overall resilience of the supply chain. Additionally, supply chain visibility enables companies to monitor compliance with regulatory requirements, such as environmental regulations and labor laws, ensuring that suppliers and manufacturers meet the required standards.
Increased customer satisfaction: Supply chain visibility enables companies to provide better customer service by improving order tracking, delivery times, and product quality. By having real-time data on the status of orders and shipments, companies can provide accurate and up-to-date information to customers, reducing the risk of customer complaints and improving customer satisfaction. Additionally, by ensuring that products meet quality standards, companies can reduce the risk of returns and improve customer loyalty.
Challenges in Achieving Supply Chain Visibility
Despite the benefits of supply chain visibility, achieving it takes time and effort. Some of the common challenges include:
Siloed data: In many cases, supply chain data is siloed, meaning stakeholders can access different data sets or are trapped in different systems. Siloed data can lead to inconsistencies and miscommunication, making it challenging to achieve supply chain visibility.
Legacy systems: Many companies have legacy systems not designed for real-time data sharing, making it difficult to achieve supply chain visibility. These systems may be outdated or lack the necessary functionality to support supply chain visibility.
Complex supply chain networks: Supply chain networks can be complicated, with multiple tiers of suppliers, manufacturers, and distributors involved, making it difficult to collect and share real-time data across the entire supply chain network.
Benefits of Improved Supply Chain Visibility
By overcoming these challenges, companies can reap the benefits of improved supply chain visibility. Some of the key benefits include:
Increased agility and responsiveness: Supply chain visibility enables companies to respond quickly to demand, supply, and market conditions changes. By having real-time data on inventory levels, production status, and shipping schedules, companies can adjust their operations and supply chain strategies to meet changing conditions. This improves the agility and responsiveness of the supply chain, enabling companies to stay ahead of the competition.
Better inventory management and reduced costs: Supply chain visibility allows companies to optimize their inventory levels, reducing the risk of stockouts, excess inventory, and obsolescence. With real-time data on inventory levels and demand patterns, companies can adjust their inventory levels and ordering schedules to match demand, reducing the need for safety stock and excess inventory. This results in cost savings for the company and improved inventory management.
Improved customer experience: Supply chain visibility enables companies to provide better customer service by improving order tracking, delivery times, and product quality. By having real-time data on the status of orders and shipments, companies can provide accurate and up-to-date information to customers, reducing the risk of customer complaints and improving customer satisfaction. Additionally, by ensuring that products meet quality standards, companies can reduce the risk of returns and improve customer loyalty.
Better risk management: Supply chain visibility enables companies to identify and mitigate risks, such as disruptions in the supply chain, quality issues, and regulatory compliance. With real-time data on the location and status of products and materials, companies can quickly respond to supply chain disruptions, such as delays or quality issues. This reduces the risk of stockouts and uncertainties, and improves the overall resilience of the supply chain. Additionally, supply chain visibility enables companies to monitor compliance with regulatory requirements, such as environmental regulations and labor laws, ensuring that suppliers and manufacturers meet the required standards.
Strategies for Improving Supply Chain Visibility
Supply chain visibility is a critical factor in the success of a company's supply chain. The 2023 CGS Supply Chain report highlights the importance of this, with 57% of respondents planning to improve supply chain visibility in 2023. By achieving supply chain visibility, companies can reap various benefits, such as increased agility, better inventory management, improved customer experience, and better risk management.
At Turbine, we're building an all-in-one platform for managing inventory and finances. From cutting a purchase order through customer fulfillment, we integrate with all the tools you're already using to centralize and track the product at every supply chain step.
If you're ready for better supply chain visibility, it's time to consider Turbine. We'd love to chat. Sign up for our waitlist, or drop us a note at hello@helloturbine.com