SCV aims to improve the supply chain by making information easily accessible to decision-makers and other key stakeholders. Integrating management tools or systems related to SCV allows managers working in different areas of an organization's supply chain to acquire real-time accurate information on inventory, orders, and deliveries in both their inbound and outbound networks.
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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 take place before and during transit.
With extended supply chain visibility (SCV), companies can quickly react to unexpected and potentially problematic situations such as supply-side production bottlenecks, or order changes on the demand side. By achieving good SCV, organizations are enabled to 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 different options in place for how to get items from their suppliers to their various business locations, as well as whether/how items can move between different 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 and data-driven decision making when you are operating a supply chain with flexible moving parts. We'll discuss how technology plays into this in more detail later, but essentially, you need a business management software in place that gives you real-time visibility into every aspect of your supply chain operations.
3. Responsiveness
This relates back to flexibility and knowing when to utilize alternatives available in a supply chain. Speed is essential: the sooner a business can act upon the trends or outliers in their 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 take advantage of 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 resources available internally that are capable of identifying and implementing the best solutions that allow greater visibility of 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 the support of IT or partners, delivering agile applications and platforms that favor collaboration and enable analytical process decision-making.
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The Impact of Real-Time Visibility on Logistics
In this complex, demand-centric world, achieving complete supply chain visibility is what sets certain companies ahead of the rest with regard to 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 one of these customers doesn't have their expectations met, they will likely look to another provider next time around.
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 in order to efficiently carry out operations and stay ahead of competitors who are also making use of innovative business solutions. With the new opportunities in the digital environment, digital security becomes 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 have continuous monitoring, with real-time data on activities related to high-value assets most targeted by hackers, 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) and associated communication links. To better understand why, let's take a look at some of the trends in technology that are changing the landscape of SCV.
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Technology Trends Affecting SCV
In recent months, the lack of flexibility in logistics operations and a widespread inability to respond to urgent demands has been exposed. Businesses worldwide are lacking technological solutions to manage and implement 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 of the opportunities that are emerging in digital manufacturing and logistics are remote monitoring and diagnosis of operations and assets, as well as the strong investment in process automation.
Logistics solution based on the Internet of Things concept
Finally, the Internet of Things has a series of interesting applications that help revolutionize the logistics sector of companies. 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 gaining greater visibility into the supply chain. Today, a business' 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 and discover new sales opportunities, and more than that: even new business models. IoT solutions have developed new real-time visibility capabilities, promoting innovative solutions that bring companies closer to a connected and 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 are closely following these technological innovations, and best-practice industrial processes are reflecting these changes. The result is a complete transformation in how companies leverage technology to make the logistic 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 for logistics & inventory, as well as improved customer service, and improved equipment efficiency and maintenance on a global scale.
More importantly, the expectation among business leaders who are investing in new technology is that a digital supply chain transformation will dramatically increase the agility of their businesses. 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.
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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 an information overload, but about capturing and sharing the relevant data from key steps in operations. To do this, a business must:
- Eliminate supply chain complexities: The essential steps must be defined to ensure operational continuity.
- Analyze the systems and processes already in use: Identify and use the most efficient operational processes, which have the least impact on the functional and technical environment implemented.
- Collect Additional Data if necessary: Missing some useful data? You might need to implement a software solution like FreightPop, or you might need to implement an additional internal process to help collect data on that last crucial step in your supply chain.
Remember, it's not necessary to change all the processes or the infrastructure to capture the data you need. Start by analyzing and optimizing the data you are already able to collect, then look to see what gaps in your data need to be filled.
2. Share Essential Information with all Stakeholders
Members of the supply chain (internal and external) must 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 in order to collect data at different supply chain stages.
Many businesses have recently made investments in new business management software in order to improve performance around the internal visibility of the supply chain. These are solutions that aim to increase business productivity and revenue, as well as reduce 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 can display data in role-specific KPI-focused dashboards that get updated 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.
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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 (both with business partners and with members of the supply chain), 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
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Summary: Steps to Increase SCV
Remember, it is not only the implementation of new technologies that will improve the visibility of the supply chain. Processes also need to be rethought.
- Identify everyone involved in the supply chain (internal and third-party) and what information should be shared with each of them to streamline operations.
- Confirm existing performance indicators for the most important processes in each stage of the supply chain, and create new KPIs where necessary.
- Evaluate where your supply chain visibility needs improvement and analyze the return on investment in each of those areas. Prioritize areas that will have the greatest impact.
- 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.