The Importance of Supply Chain Visibility

    By Marlous de Klerk | Small Business

    The current economic situation has forced many companies to slim down, reducing inventories as they try desperately to avoid production ahead of demand. At the same time, a genuinely global supply chain has bought increased complexity. With the order-to-delivery landscape now involving a wide range of third party players, effective collaboration with the right partners has become a key element of success.

    Unfortunately, many businesses voice concerns over the stability of smaller players in their logistic networks, finding it difficult to manage information blackouts around shipments in transit and inventory at third parties. Despite the obvious importance of understanding the business’ entire ecosystem, cultural and technological issues have led genuine supply chain visibility to elude most companies.

    Visibility the new priority
    With the 24/7, always on, instant gratification social/mobile culture now firmly embedded everywhere, consumers place huge pressure on companies to supply quicker and cheaper without committing loyalty in return. Trends are there to be followed, and traders are expected to keep up. In this high pressure environment, traders can be confident that any information gaps in the supply chain are negatively affecting the bottom line.

    Difficulty viewing real time order, shipment and inventory information makes the effective leveraging of an international partner network impossible. Without transparency goods quickly become unavailable – whether through an unplanned physical lack of product, or an inability to locate what is actually available. And not being able to give customers what they want is a major issue. Accurate insight into all stock levels throughout the ecosystem has thus become a must have, along with end to end overviews of the entire supply chain, and insight into activity and transaction history throughout the partner community.

    Making complexity manageable
    At the top strategic level, companies are focusing their efforts in three main areas – improving internal cross-departmental visibility and integration, streamlining processes for easier monitoring, and increasing B2B connectivity throughout the partner network.

    The key statistic here is probably that 85% of companies now import or export. The major offshoot of this is that the number of external logistic providers (LSPs or 3PLs) involved within most supply chains has dramatically increased. The growing role of these external partners has made keeping everyone up to date with everything that’s going on considerably more challenging, even if many of these service providers do support a degree of track and trace capability.

    Sadly, in many cases they offer incomplete insight at the in-transit individual shipment level. In terms of trying to get a grip on the bigger picture, many businesses are left with serious doubts over whether outsourcing logistics activities is a good idea, regardless of an inability to service the entire supply chain effectively themselves.

    To be successful, companies must have the ability to coordinate and synchronize information, dynamically managing product and financial information at each step of the logistic process. This integration of, and access to, all relevant information makes it possible to respond to supplier issues and changes in customer demand effectively.

    In my next article, i’ll discuss data standardization and careful relationship management as the two key focus areas for ensuring everyone has access to all the information that they need.

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