When you’re here and your product is over there — wherever “over there” might be — you need supply chain visibility (SCV). An Aberdeen Group report defined SCV as “the awareness of, and control over, specific information related to product orders and physical shipments, including transport and logistics activities and the statuses of events and milestones.” Sounds easy enough, right?
Thanks to technology it has become easier to know where inventory is at a given moment, but we all know who’s using that technology: those clumsy, error-prone humans. Nevertheless, we have a few thoughts on how a few simple steps can provide a roadmap of how to improve supply chain visibility that will help you and your customers.
But first, what are the benefits of a transparent supply chain? Well, if knowledge is power then knowing what you have and where it’s located is incredibly important.
Okay, you know supply chain visibility is going to help you and your customers, but isn’t achieving it just an impossible dream? We don’t think so.
STEP 1: IDENTIFY PAIN POINTS
What is the primary pain point that would most benefit from increased visibility? Do some real digging. Meet with internal departments, as well as your principal vendors, to discuss problem areas. Figure out the most pressing issue, then go even deeper, rooting out the specific process, technology or other solutions that promises the best ROI for your company.
Most manufacturing and distribution companies cite inventory management as a pain point most worthy of attention. This may not be the case for your company. Again, do your research, review the data and figure out which area to tackle first.
STEP 2: DEFINE YOUR GOALS & EXPECTATIONS
You know where you’re going, now create your plan of action.
STEP 3: BREAK THE CHAIN, BUILD A NETWORK
Yes, we’re talking about creating supply chain visibility, but the end result will look less like a chain and more like a network. To achieve true visibility, you’ll have to collaborate with your vendors. We suggest you begin by talking with those vendors whose involvement affects your bottom line the most. Approach them in the true spirit of collaboration and mutually beneficial gain. This way of doing business should epitomize the phrase ‘win-win.’ After meeting with your key vendors, speak with others in your network about how to incorporate SCV in all your interactions. This takes trust and a willingness to share information.
STEP 4: INVEST IN GOOD TECHNOLOGY
Now that you’ve developed your SCV action plan, it’s time to make a financial investment. You need a sophisticated system that will support the data management needs of your supply chain. There are a lot of supply chain management solutions out there at all price points. You don’t want to get more than you need, but definitely don’t get less. Here’s where your data will help you. Look at your identified pain point(s), unique needs and goals. Chances are you won’t find a one-size-fits-all solution. Other tips:
STEP 5: MEASURE RESULTS & LOOK FOR WAYS TO IMPROVE
You can’t improve something you don’t measure. Based on your specific goals, determine which key performance indicators (KPI) are most important to measure - and make sure your system can handle this task. Send regular scorecards and maintain open lines of communication with your collaborative partners.
Don’t get complacent! You’ve set your company apart by starting a cycle of continuous improvement - something all companies should strive for rather than treating it as a nice saying on the wall. To do that put a plan down on paper. Check out our posts on quality and the Plan-Do-Check-Act (PDCA) Cycle for more information.
Getting a handle on supply chain visibility is more than just a buzzword or total quality exercise. It's a goal with real value — the kind that can differentiate your company from other suppliers.