Trends in supply chain management: Visibility

Seeing beyond the buzz

Everybody’s talking about, but who really knows what it means? “Supply chain visibility” – try a quick online search and you’ll find a plethora of articles, papers and interviews all talking about how important it is to achieve.

Defining it isn’t really that hard, but knowing what to do with it once you have it is a little tougher. We’re going to take a quick look at both.

What it is

First, what is it? Supply chain visibility boils down to having actionable data in real time that allows you to control and fine tune your supply chain operations. In theory, visibility enables better inventory control from end to end, allowing for leaner, more cost-effective operations, and ultimately a more robust bottom line.

Gaining visibility is a considerably more complex matter. It requires integration of your information systems across departments (also known as eliminating silos) and the ability to gather, process and analyze reams of data in real time. You need both soft components—a complete systems overview of your supply chain—along with the right technology: mobile asset tracking, cloud computing, and data processing power.

Why you need it

For most companies, achieving total supply chain visibility will be a stretch target. But there are numerous reasons to try. In our increasingly fast-moving, data-rich, world you need to know what’s going on if you are to compete. The advantage goes to the company that can work around risks inherent in global supply chains due to natural disasters, terrorism and political upheaval. Not to mention the recently all-too-common disruptions in trade deals that might turn a supply chain from viable to wildly unprofitable almost overnight with the imposition of new tariffs and duties.

Likewise, if you are operating in an omni-channel or simply e-commerce world, you need a degree of nimbleness that can only be achieved by applying the discipline of supply chain visibility. Spikes in demand, working with a major buyer or supplier, rapid product obsolescence, or the entrance of a new competitor all require the ability to respond immediately and with full command of the relevant data.

Using the tool

By now you may have already gotten the sense that supply chain visibility is not an end state but a skill set, or a tool. That’s exactly how some thinkers in the space are characterizing it. Supply chain visibility enables the immediate decision-making that is required to compete successfully in the scenarios mentioned above.

It is the logical extension of the old way of doing things with dozens of analysts agglomerating, cleaning and churning through the numbers coming in from disparate systems like EDI, ERP, WMS and TMS. There was no way these human workers, even aided by numerous IT systems, could possibly keep up. They couldn’t do it then, and they certainly cannot do it now.

Fortunately, they don’t have to. With big data flowing in from integrated systems, and increasingly AI-powered capabilities, supply chain decision-making needn’t take hours; once a course of action is determined, changes can be changes can be executed within a split second.

If the supply chain’s strategic objectives are clearly defined, software takes over, making the minute adjustments that are needed to turn decision-making into bottom line success. Heavyweight IT suppliers like SAP and Oracle are working hard on perfecting and integrating all the moving parts to make this work in the real world.

Until they have it nailed, and for the companies that don’t have the critical mass to adopt such sophisticated systems, supply chain can still continue to benefit from the collection and analysis of their data, and work to incrementally improve their own supply chain visibility.

 

by Emily Atkins