Supply chain strategy improvement is the name of today’s game. With the rise of big data, IoT, and AI, everyone seems to be looking for innovative ways to reduce costs, improve efficiency, and create new value for their companies.
The old ways no longer fit the needs of today’s problem. But when it comes to supply chain, there are always new challenges, risks, and ways to answer its fast-paced market. The need to respond quickly and accurately to customer demand prevails—leading companies into a confusing state.
COVID-19 outbreak exposed flaws in global logistics networks as companies experienced massive supply chain disruptions leading to revenue loss during the pandemic.
One of the big names on this list is Nike Inc., which recorded a fall in net income by 40% attributed to reduced shipments, labor shortages, and other supply chain effects.
The failure of companies to anticipate sudden supply chain disruptions can be associated with a lack of supply chain visibility, which induces the inability to address shifts in demand and supply before they become crucial.
The need to have a proactive supply chain strategy has become more critical than ever. In this blog, we will consider some of the strategies companies can adopt to improve their supply chain. But before we get our hands wet, let’s go a few steps back and tackle some of the basics.
What is Supply Chain Visibility?
While it may sound daunting, supply chain strategy is actually the simple exercise of considering ‘how’ to do something. However, in today’s business environment, penetrating the entire spectrum of possible options (from which you will later choose one option) can be all but trivial.
A supply chain strategy is the overall, long-term vision and plan for how a company plans to compete in the marketplace. It is all about making sure your business can deliver products or services to your customers in the right amount, at the right time, in the proper order. Seems easy to digest, right?
It is about how you manage your company’s entire supply chain to achieve a competitive advantage. And that includes not just how you get your products from point A to point B, but also how you design them and how you get them into the hands of your customers.
The main objective of a supply chain strategy is to formulate a cohesive plan that will help the organization achieve its operations, costs, revenues, and competitive position.
Supply Chain Visibility (SCV) ensures total transparency in tracking components, raw materials, and final products on their way from supplier to the manufacturer and to the final customer.
Tracking an item from a manufacturing facility in South Asia to an assembly plant in the US to a wholesale distributor and on to the final customer demands a multifaceted approach requiring a combination of several partner systems.
Ensuring complete transparency within a visible supply chain requires real-time data about logistics and other supply chain operations so that companies can anticipate inventory shortages, prevent bottlenecks, and fulfill compliance directives.
How Increased Visibility Can Help You Scale Your Business?
Over the last two decades, companies have lost control and visibility of the outsourced parts of the supply chain. As a result, supply chain visibility plays a significant role in supply chain strategy.
Supply chain visibility allows companies to reshape or resupply according to the dynamic demand and supply balance. Achieving true visibility in your supply chain performance can unveil a multitude of data and analytics that can transform your operations and scale your business.
- More efficient: A visible supply chain network means increased operational efficiency allowing your products to reach your end customers faster.
- Reduce costs: Total visibility into supply chain operations help you anticipate disruptions and make proactive measures to minimize loss and increase profitability.
- Effective strategizing: Supply chain visibility enhances your ability to strategize every aspect of your operations effectively, from manufacturing to shipping
- Better data access: Get better data access to generate more customer and product-oriented insights.
- Increase customer satisfaction: With increased efficiency in your supply chain operations, you have the option to enhance or modify your delivery processes to increase customer satisfaction.
Now that we know how increased visibility in your supply chain can be pivotal for the growth of your business, it’s imperative to know about the roadblocks in the successful implementation of a supply chain strategy.
Challenges of Achieving Supply Chain Visibility
The modern supply chain is no longer a simple linear chain anymore. Instead, it involves complicated demand-driven parameters that pose hurdles to complete transparency within supply chain operations.
Here are the three major challenges to supply chain visibility:
- Sharing information and data: A supply chain can have several moving parts across the world with a single shipment having more than 100 interactions along its way from source to destination. The lack of a system to effectively track, monitor, and share information along the fulfillment pathway creates a challenge for companies to ensure real-time visibility into the supply chain operations.
- Supply chain disruptions: Potential disruptions related to weather, traffic, and geopolitical events in a region can cause a ripple effect in the productivity of an entire supply chain. Without forward-looking demand visibility, it becomes tough to evaluate issues in an organization’s manufacturing, retail, and distributing units and address them.
- Combing through data: Turning data into insights requires a good sense of what is important and what is not. Supply chain visibility can’t have the best possible effect unless you know how to disseminate relevant information from different tiers of your supply chain.
How To Achieve True Supply Chain Visibility?
To achieve true supply chain visibility, you have to clearly define your organizational goals, review your IT setup, and invest in an appropriate supply chain technology to streamline your interactions with suppliers, logistics partners, and other stakeholders.
- Determine the right SCV technology: First, analyze your supply chain to understand which module upgrades you need. The SCV software can be a simple point product or a package with several modules and capabilities to integrate supply chain operations with back-end systems like ERP and CRM.
- Promote process improvements: It requires eliminating manual or spreadsheet-driven processes and ensuring your decision-makers receive relevant information related to supply chain performance.
- Enhance operability: The right SCV technology streamlines the supply chain and identifies the necessary process improvements. You will gain deeper insights into your supply chain performance and identify potential areas of improvement.
Modern supply chains are already performance-enhanced with new technologies like supply chain simulation and advanced supply chain analytics.
Likewise, the concept of supply chain visibility has always existed in some form for decades, but now the present-day supply chain visibility tools are reaching maturity and rising to the top of industry leaders’ radars.
Achieving true visibility requires advanced software that gathers and transforms real-time data at every point of the sourcing process into crucial information that helps companies improve business decision-making and ensure success.