Supply chain visibility enables firms to monitor different goods and/or products during transit, providing a comprehensive view of inventory and activity. Shippers can improve customer service and cost controls through inventory management, proactive status updates, limiting disruptions and risk mitigation. Consequently, supply chains will become robust and more agile with improved visibility.
Poor visibility creates inefficiency in terms of organising, processing and managing data which creates uncertainty and increased risk. In this article a discussion of how supply chain visibility is compounding global economics will be outlined and why investing in a Cloud based technology can help mitigate risk.
Recent macro-economic challenges
The COVID-19 pandemic has exposed the vulnerability of supply chains globally. The need for visibility across the entire ecosystem, and the ability to react to changing demand quickly and more acutely is more important than ever. However, the pandemic did not create new problems for supply chains. It revealed previously undiscovered vulnerabilities, such as staff shortages or losses caused by closures. It has, however, accelerated and magnified existing problems in the supply chain.
An example of this can been the increase in product lead times across nearly all major trading geographies China saw a 222% increase in lead times, Europe saw a 201% increase and the USA saw a 200% increase. Ernst & Young LLP (EY US) conducted a survey of 200 senior-level supply chain executives in late 2020 and 2022. The COVID-19 global pandemic created a disruption in trade finance, education and health that disrupted businesses and societies like none other over the past 100. It’s no surprise that only 2% reported being fully prepared for the COVID-19 pandemic. 57% suffered serious disruptions. 72% of those surveyed reported a negative result (17% reported a significant, negative effect, 55% mostly negative).
The UK Manufacturing sector faced additional challenges. Delays at the border and added administrative burdens increased lead times resulting in customers being charged higher import tariffs on components and additional costs in the supply chain such as inventory holding costs and transportation cost.
Due to the high rise in fuel cost consumer products price has increased rapidly and more quickly for most businesses to cope with. The margin for profit has been slim because of downward pressure consumer budgets meaning customers are not willing to pay for a product beyond a certain amount. More firms are now shifting towards visibility investments in their supply chain to gain better insights on real-time demand ,the image below shows a comparison of visibility in supply chain and how it has moved to the first priority in the year 2021 , 2022 and how it will remain the first priority in 2023.
Top workforce measured that came to light were the investment in AI and machine learning for increased virtual collaboration.
How to improve visibility and regain the competitive edge:
Machine learning and artificial intelligence give businesses the advantage to go through historical data and find the KPI (Key performance indicators). Information about the KPI’s gives business the predictive visibility they need to stay as close to real time as possible.
Supply Chain Control Tower:
Around 15 years ago, the concept of a Supply Chain control tower was first recognized by supply chain leaders.
A SCCT (Supply Chain Control tower) is a cloud based solution that employs the use of artificial intelligence and machine learning to proactively manage supply chains. A SCCT captures and uses (close to) real time data across the business ecosystem to provide visibility and decision making. However, a SCCT is not a stand alone supply chain application it is an integrated ability of a supply chain management tool.
Most control towers only provide an inside out view because they lack the ability to integrate with data sources.
Microsoft Dynamics 365 Supply Chain Management (D365 SCM) helps companies overcome these problems by providing them with the tools that enable digital supply chain models, promote and make collaboration easier all against the backdrop of real-time data for better management decisions. This gives new life to supply chain control towers.
With the help of an intelligent order management, organisations can respond faster and more intelligently to disruptions and opportunities such as to automate and optimise their processes and give themselves more time to react to any blockages in their supply chain using AI and real time inventory data.
Commercial Benefits of improved Supply Chain Visibility:
Real-time data & analytics can improve customer & supplier relations resulting in increased bottom-line profitability with a reduction in disruptive costs, particularly when it comes to customer services and delivery options. This allows firms to reallocate resources more effectively.
Ability to track goods and movement of goods more efficiently creates less inventory waste and reduce risks in Warehouse capacity and management. Ultimately, significant gains for planning, efficiency, customer service, and waste management help mitigate commercial risk.
Strategize more effectively:
Visibility and certainty create an environment for more informed management decisions as well as capacity for contingency planning.
Improve customer satisfaction:
Better supply chain visibility allows firms to be proactive with much stronger insights into the customer journey being able to identify as well as plan for pinch points will facilitate improve customer satisfaction.
In conclusion, visibility plays a crucial role in the supply chain, allowing for better tracking and monitoring of goods and information flow, as well as providing greater transparency and accountability for all parties involved. By improving visibility in the supply chain, businesses can enhance efficiency, reduce costs, and improve customer satisfaction, ultimately leading to a more competitive and sustainable global economy.