What is supply chain visibility and why is it important?

What is supply chain visibility?

Supply chain visibility is the strategic capability to monitor every component of the supply chain from end to end. By providing real-time insights into inventory levels, shipment status, production schedules, and warehouse management, enhanced visibility can help you create a more responsive and resilient supply chain to better manage the unpredictability inherent in global markets. This not only boosts operational efficiency, but also supports regulatory compliance and shows you areas where you can improve the overall sustainability of your supply chain operations.

Supply chain visibility also provides a base of information that trading partners can use to work together, ensuring that all parties can act quickly and with informed confidence. This not only reduces risks and minimizes delays, but it is essential for maintaining a competitive edge and ensuring customer loyalty. Ultimately, supply chain visibility translates to quicker decision-making and more efficient operations, helping you to not only meet but exceed customer expectations.

Supply chain visibility vs. supply chain transparency

Both terms refer to better clarity across supply chain operations. While supply chain visibility is comprised of the measures used to gain this clarity, supply chain transparency specifically has to do with a company’s willingness and capacity to disclose key information—including financial, ethical, and environmental practices—for all the global suppliers, stakeholders, and logistical partners that they work with. And while these terms have different meanings, the fact is: Without supply chain visibility measures, systems, and technologies in place, it’s almost impossible to implement a transparent supply chain. Today’s business leaders know that their brand integrity, customer relations, and even profits depend upon their ability to demonstrate transparent and sustainable supply chain practices. Tools like blockchain, inventory sensors, and cloud connected data collection systems are growing in popularity for their ability to support transparency initiatives.

How does a visible supply chain work?

For your supply chain to work at its best, you should be able to see all of its component links from a single vantage point. Businesses have long sought to achieve this, but until recently, the technology simply didn’t exist to support the unified collaboration of people and systems. Today’s visible supply chains operate by empowering teams and by leveraging AI, machine learning (ML), cloud connectivity, automation, and advanced analytics. Below are some of the core components that go into achieving a more visible supply chain.

• Data integration: It’s one thing to amass an enormous amount of informative data, but its value can only be realized when it’s integrated into enterprise-wide systems—and strategically analyzed to deliver powerful insights and inform automation and decision-making. A unified data pool is essential for breaking down silos within the organization and ensuring that all stakeholders have access to consistent and accurate information.
• Continuous monitoring: A supply chain control tower represents cloud connected tools that can monitor operations from end to end. Connecting IoT devices, systems, sensors, suppliers, and partners to a centralized vantage point helps you identify and address disruptions proactively. By integrating data from all supply chain components, a control tower helps to boost your confidence and arm you with the intel you need to pivot and respond to both opportunities and threats.
• Analytics and reporting: From sales and operational planning (S&OP) to inventory management, and planning/forecasting, supply chain visibility relies upon your teams’ ability to get customized cross-business reports and to make fast confident decisions. Here is where all that data capture and integration pays off: AI-powered analytics and integrated, connected systems allow you to leverage and understand the big data sets you need to work with to compete in today’s market.
• Collaboration: Enhanced visibility improves coordination between all supply chain participants, from R&D teams to suppliers, manufacturers, shippers, and consumers. When combined with a supply chain collaboration platform that connects and integrates all the partners in your supply chain, clearer visibility informs true collaboration. Guesswork turns into assurances; reactiveness turns into preparedness.
• Risk management: Supply chains came into the spotlight during the pandemic when the whole world began to understand what business leaders have known all along: supply chains are as essential as they are vulnerable. And from raw materials to customer feedback, they have an enormous number of moving parts—all of which are susceptible to risk. The better able you are to see across your supply chain from a central digital vantage point, the greater your ability to mitigate risk and ensure compliance.

Benefits of visibility in the supply chain

Below are some examples of how you can benefit from greater insight into your supply chain operations:

• Agility and resilience: It’s essential to gather and analyze all your supply chain data so that you can quickly act upon it. True agility means you have the capacity to respond from end to end across your supply chain, to pivot, and to optimize your operations for a new business paradigm. Knowing when a challenge or opportunity is on its way is the first crucial step.
• Inventory planning and optimization: By providing a real-time view of inventory levels and operational status, companies can streamline operations and reduce excess inventory. Well- managed inventory optimization leads to cost savings and improved efficiency.
• Forecasting and demand management: Access to real-time and historical data enhances the accuracy of demand forecasting. Companies can align their production and inventory management more closely with actual market demand, reducing the risk of overproduction and stockouts.
• Enhanced customer service: Greater supply chain visibility improves the accuracy and reliability of order fulfillment processes. Timely and transparent shipping information increases customer trust and satisfaction by keeping them informed about the status of their orders.
• Environmental and social responsibility: Depending upon the nature of your business, your supply chain can contribute up to 90% of your total carbon and pollution output. Visibility is crucial for achieving sustainability goals and for meeting consumer expectations of ethical and responsible business practices.

Overcoming challenges with supply chain visibility tools

Of course, there are often hiccups when you try to initiate change and new strategic directions. But the good news is that—unlike global events and supply chain disruptions—these practical challenges are within your control to manage and overcome.

• Inconsistent data: Many supply chain managers are grappling with disconnected global systems and wildly disparate data sources.
  • Mitigation: By implementing AI-powered data integration platforms to harmonize and cleanse disparate data, you can establish a single version of truth that enhances decision-making.
• Disconnected processes and process gaps: Siloed operations can disrupt the flow of information.
  • Mitigation: A unified operational platform is an essential tool to boost collaboration. But ultimately, it’s equally crucial to work toward a business culture that is communicative and team-oriented.
• Technologies that are not integrated: Often with the best of intentions, suppliers, partners, and staff across your supply chain attempt to automate and coordinate their processes in a vacuum.
  • Mitigation: Acquiring the powerful tools and software you need is the first step. But it’s also essential to establish protocols and training to help people use it optimally, and to wean them off rogue apps and disconnected technologies.
• Poor communication: Advanced collaboration tools are often lacking or under-utilized.
  • Mitigation: With a networked supply chain visibility platform that connects data, processes, and all relevant partners, everyone can easily share critical digital documents and insights for faster communications and approvals.
• Over-reliance on manual data handling: Manual processes for data management slow operations and increase the risk of errors.
  • Mitigation: Adopt automation tools employing AI and machine learning to overhaul data collection and processing, significantly boosting efficiency and accuracy across the supply chain.

Trends in supply chain visibility technology

As businesses strive to enhance their operational efficiency and responsiveness, technology continues to evolve. Here are the key trends that are shaping the future of supply chain management:

• Extended transparency: Today’s business leaders seek deeper, real-time insights into their global operations supply—including tier two and tier three suppliers, going as far back as their raw materials suppliers’ sourcing and production practices. This helps them root out non-compliant suppliers and unacceptable practices.
• Environmental, social, and governance (ESG) and emissions tracking: Companies are increasingly leveraging smart technologies to track emissions and other environmental impacts (in real time) along their supply chains. This helps them improve their sustainability practices and adhere to their environmental, social, and governance (ESG) commitments.
• Automation and AI: As supply chain data sets become larger and more complex, it is essential to have AI-enabled systems and tools to manage all that information. As companies are quickly learning, data volume is meaningless without the ability to perform robust advanced analytics and derive actionable and specific insights.
• IoT integration: Just a few years ago, IoT networks were largely regulated to the manufacturing floor. But as 5G and cloud connectivity evolve, there is a marked risk in touchpoints, devices, tools, and even people who are sending powerful data into a centralized IoT network.
• Blockchain for transparency: From combatting cybercrime to building a more reliable and transparent supplier network, blockchain provides an immutable transaction record that helps build confidence and security.

What is supply chain visibility software?

Supply chain visibility software enhances transparency and coordination across all stages of the supply chain by providing tools for real-time tracking, data analytics, and automated notifications.

What to look for in supply chain visibility solutions

When selecting supply chain visibility software, it's crucial to choose a solution that aligns with your organization's specific needs and goals. Here are key factors to consider as you proceed on your digital transformation journey:

• Trading partner collaboration: Ensure the software connects buyers, suppliers, manufacturers, and logistics partners on a single platform, facilitating seamless collaboration across the supply chain.
• Digital document exchange: Look for capabilities that support digital document exchange for planning, purchasing, and invoicing processes, streamlining these activities and reducing manual errors.
• Process automation: Choose software with robust automation features, such as automated invoice reconciliation and other processes based on historical and real-time data.
• Integration with business systems: The solution should integrate smoothly with existing ERP and CRM systems, enabling a unified view of the supply chain and enhancing data consistency.
• Real-time tracking: Select software that offers real-time tracking of materials, inventory, and shipments, providing immediate insights and alerts for better decision-making.
• Inventory management: Effective supply chain visibility software should support supplier-managed inventory, helping to maintain optimal stock levels and prevent overstock or stockouts.
• Frequent updates and scalability: Ensure the software receives regular updates and improvements—and that it can scale as your business grows and adapt to your evolving needs.

Take the next steps

Explore supply chain visibility software that can seamlessly integrate with your existing business systems to provide powerful tracking and advanced analytics. With features like automated processes, digital document exchange, and robust collaboration tools, you can now ensure that all your global stakeholders can efficiently share and manage critical supply chain data. This enhances transparency, reduces risks, and powers more confident and accurate decision-making across your supply chain—and your business.

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