Supply Chain Visibility: Path to Competitive Advantage

SCV aims to improve the supply chain by making information easily accessible to decision-makers and other key stakeholders. Integrating SCV management tools or systems enables managers across an organization's supply chain to obtain real-time, accurate information on inventory, orders, and deliveries in both inbound and outbound networks.

What is Supply Chain Visibility (SCV)?

Supply Chain Visibility (SCV) is the traceability of product orders and physical product shipments from the source of production to their destination. This includes logistics and transportation activities, as well as events and milestones that occur before and during transit.

With extended supply chain visibility (SCV), companies can quickly respond to unexpected, potentially problematic situations, such as supply-side production bottlenecks or demand-side order changes. By achieving good SCV, organizations can manage these situations or events, analyze their effects on business operations, and quickly orchestrate solutions.

Indicators of Poor Supply Chain Visibility

But, how do you know if you have adequate visibility into your supply chain, and what are some things that might indicate a supply chain visibility problem? Here are a few specific things to watch out for:

• Merchandise is unavailable or in a different location than expected
• Supply and transportation issues occur frequently, and you can't identify why
• Your business lacks the technology necessary to leverage an international inventory network
• It is difficult to locate information on particular transactions, orders, deliveries, and stocks
• Different departments sometimes have contradicting information about the same item

If that sounds like your business, don't worry! Many of the problems you are experiencing can be easily addressed and resolved just by improving your SCV...

5 Criteria Essential to Productive Supply Chains

Before we dive too deep into Supply Chain Visibility specifically, let's look at productive supply chains as a whole to understand how SCV fits into the bigger picture. There are 5 criteria in particular that are essential to any productive supply chain:

1. Flexibility

A standard aspect of supply chains is that they involve contracts with individual suppliers, which likely preclude sourcing the same product from another supplier for the duration of the contract. However, there is often much more flexibility as you move through the supply chain. In a productive supply chain, a business often has options for how to get items from its suppliers to its various business locations, as well as for how and whether items can move between locations after being initially acquired.

2. Visibility

The days of managing the supply chain in silos are over. Sophisticated data analytics tools enable companies to manage supply chain visibility end-to-end and, in real-time. Combining operational excellence with analytical capabilities is key to enabling cross-functional, data-driven decision-making when operating a supply chain with flexible moving parts. We'll discuss how technology plays into this in more detail later. Still, essentially, you need business management software in place that provides real-time visibility into every aspect of your supply chain operations.

3. Responsiveness

This relates to flexibility and knowing when to use the alternatives available in a supply chain. Speed is essential: the sooner a business can act upon the trends or outliers in its data, the easier it will be to limit or avoid negative repercussions on operations. Maybe that means quickly leveraging a different supplier location, using emergency stock, or relocating products during the shipment phase. Costs associated with corrective actions will be drastically reduced if a business is ready to quickly adjust when needed.

4. Optimization

While this is important in the case of unforeseen events or emergencies, optimization shouldn't be reserved for those occasions. In a productive supply chain, a business is constantly working to reduce costs and capitalize on opportunities. This is achieved by optimizing how the business is moving items through the supply chain as new trends appear in company data, or in the industry as a whole.

5. Collaboration

Companies don't always have internal resources capable of identifying and implementing the best solutions that provide greater visibility into the supply chain. It is often helpful to build analytical teams that can support decision-making and identify risks and opportunities hidden in unstructured data. Companies with productive supply chains often rely on IT or partners to deliver agile applications and platforms that foster collaboration and enable analytical decision-making.

Learn How to Set Up SCM Features, Including Inventory and Purchasing in NetSuite.

The Impact of Real-Time Visibility on Logistics

In this complex, demand-centric world, achieving complete supply chain visibility is what sets certain companies apart in logistics.

The Customer is the Boss, B2B & B2C

A customer who has bought a garment online and a factory manager who is waiting for an order for spare parts to ensure the permanent operation of an assembly line have something in common: they want to receive their complete order in the right place, at the right time, and at the lowest possible price. If either of these customers doesn't have their expectations met, they will likely look to another provider next time.

It is necessary to plan and execute supply chain processes efficiently in order to process orders correctly and on time. Full visibility helps companies achieve accuracy, and enables them to quickly take any necessary corrective actions if a problem occurs—the faster a company's reaction, the lower the negative impact and cost to the business.

SCV & Addressing Logistics Challenges

Some of the biggest challenges businesses face in logistics today are global competition, constantly increasing costs, pressure to reduce delivery times, and maintaining reliable infrastructure for business processes. The solution to addressing all the challenges lies in gaining visibility into the supply chain, and adapting to changes related to the integration of business systems, IT, and operational technologies.

Companies have had to radically rethink how they use technology to efficiently operate and stay ahead of competitors who are also adopting innovative business solutions. With new opportunities in the digital environment, digital security has become a priority for businesses. One way to identify vulnerabilities and act proactively is to use real-time visibility, focusing on security and solutions for the competitive market. In other words, it is necessary to maintain continuous monitoring with real-time data on activities targeting high-value assets, such as banking data or intellectual property.

Real-time visibility should include all managed and unmanaged assets (such as shadow IT, legacy systems, and IoT devices) and their associated communication links. To better understand why, let's take a look at some of the technological trends changing the landscape of SCV.

Technology Trends Affecting SCV

In recent months, the lack of flexibility in logistics operations and a widespread inability to respond to urgent demands have been exposed. Businesses worldwide lack the technological solutions needed to implement and manage new supply chain visibility strategies.

Supply chains need to become more resilient and agile. To achieve this, businesses need greater transparency in processes and operations. Ideally, a business should know at any time where items are, where they are going next, and when they will arrive. Some emerging opportunities in digital manufacturing and logistics include remote monitoring and diagnostics of operations and assets, as well as strong investment in process automation.

Logistics solution based on the Internet of Things concept

Finally, the Internet of Things has a range of interesting applications that help revolutionize companies' logistics sectors. Organizations that choose to apply the concept in their business can experience a significant increase in productivity, and gain greater control over the management of internal business processes. This is already a reality, especially in the business and industrial sectors. Several examples can be cited, such as sensors in machines to measure productivity or indicate when certain parts need to be replaced.

The Internet of Things (IoT) plays a key role in improving supply chain visibility. Today, a business's machines can “talk” throughout all different stages of operations, communicating important metrics and measuring performance. These devices can be in different areas of a company or even the world. Having data on the progress of processes allows companies to improve planning, discover new sales opportunities, and, more than that, even develop new business models. IoT solutions have developed new real-time visibility capabilities, enabling innovative solutions that bring companies closer to a connected, smart future.

What is Industry 4.0?

The arrival of Industry 4.0 (aka the Fourth Industrial Revolution) has transformed and modernized services, heavily impacting logistics. Industry 4.0 brought us a scenario in which data intersects frequently, and logistical processes rely on synchronized technology.

Logistics closely follows these technological innovations, and best-practice industrial processes reflect these changes. The result is a complete transformation in how companies leverage technology to make the logistics process more efficient.

Digital Transformation and Supply Chain Visibility

The deployment of visualization tools is at the top of executives' priorities in the digital transformation of a supply chain. Some of the benefits expected from the digital transformation of supply chains include cost savings in logistics & inventory, improved customer service, and enhanced equipment efficiency and maintenance on a global scale.

More importantly, business leaders investing in new technology expect a digital supply chain transformation to increase their businesses' agility dramatically. For them, a technology solution such as a cloud-based ERP system is necessary in order to respond to changing market conditions, new competitors, or unexpected supply chain interruptions.

How to Achieve Supply Chain Visibility

How can visibility be achieved when the supply chain is increasingly complex, with more distributors, greater geographic reach, and receiving data from many more action points and varying technology sources?

1. Efficiently Capture Relevant Data

It is not about managing information overload, but about capturing and sharing relevant data at key steps in operations. To do this, a business must:

• Eliminate supply chain complexities: Define the essential steps to ensure operational continuity.
• Analyze the systems and processes already in use: Identify and implement the most efficient operational processes with the least impact on the functional and technical environment.
• Collect Additional Data if necessary: Missing some useful data? You might need to implement a software solution like FreightPop or an additional internal process to collect data on the last crucial step in your supply chain.

Remember, it's not necessary to change every process or piece of infrastructure to capture the data you need. Start by analyzing and optimizing the data you already collect, then identify gaps in your data that need to be filled.

2. Share Essential Information with all Stakeholders

Members of the supply chain (internal and external) must be able to see and share essential information. Therefore, a shared data platform (Data Event Execution Platform, 'repository of event execution data') is required that is intuitive and can communicate directly with the different computer systems used by the providers. Ideally, this system should integrate with other business management systems and third-party plugins to collect data across different supply chain stages.

Many businesses have recently invested in new business management software to improve internal supply chain visibility. These solutions aim to increase business productivity and revenue while reducing manual processes. If your decision-makers are struggling to access and analyze company data, you might need to switch to an ERP system like NetSuite that displays data in role-specific, KPI-focused dashboards that update in real time.

To effectively implement a new visibility solution for the supply chain, you need to:

• Perform a thorough analysis of business processes to define the relevant data (identifiers, logical links, or business events) to capture and share.
• Have the advice of an expert on the necessary tools, technology, and infrastructure.
• Carry out a flexible integration that adapts to the specific characteristics of the supply chain.

SCV and Generating Sustainable Value

After its successful implementation, supply chain visibility allows a business to:

• Facilitate informed decision-making, eliminating or reducing the risk that orders are processed incorrectly, incompletely, or late
• Reduce the cost of corrective measures
• Better analyze and understand past incidents to gain operational efficiency for the future.

In short, it enables business agility, fosters greater external collaboration (with business partners and supply chain members), and accelerates business innovation. All this translates into improved service, cost reduction, and greater value generation.

Benefits of Supply Chain Visibility

Here is a list of a few important benefits of SCV that can bring sustainable value to your business:

• Instant access to vital information
• Improved efficiency of end-to-end business processes
• Reduces operational "blind spots."
• More complete understanding of customer needs
• Superior handling and execution
• Lower material and labor costs
• Better inventory management
• Easily monitor key business metrics
• Optimization of logistics and transport efficiency

Summary: Steps to Increase SCV

Remember, it is not only the implementation of new technologies that will improve the supply chain's visibility. Processes also need to be rethought.

1. Identify everyone involved in the supply chain (internal and third-party) and the information to be shared with each to streamline operations.
2. Confirm existing performance indicators for the most important processes in each stage of the supply chain, and create new KPIs where necessary.
3. Evaluate where your supply chain visibility needs improvement, and analyze the return on investment for each area. Prioritize areas with the greatest impact.
4. Carefully select the technology partner that will contribute to the digital transformation and increase the visibility of the supply chain, capable of providing robust technologies that improve the management of logistical processes.

Find out how NetSuite can contribute to supply chain visibility and efficiency of logistics operations by contacting our NetSuite consultants. NetSuite solutions can help you integrate diverse business processes and communicate important data to the people who need it.

Contact Anchor Group