Supply chain visibility (SCV) is the ability of parts, components or products in transit to be tracked from the manufacturer to their final destination. According to TechTarget, the primary objective of SCV is to improve the availability of data to stakeholders and customers alike, ultimately strengthening and improving the supply chain.
Because needs differ from organization to organization and industry to industry, no one-size-fits-all solution exists. A sound SCV action plan should be built around demand, resources, efficiency and competitive advantage. Below we'll run through five steps to improve visibility across your global network.
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.
- Manage Capital - When you know how much inventory you have in a warehouse, on a ship, at the port or waiting to be trucked from the factory, you know where your money is. When you know where your money is, you’ll make more informed decisions. It really is that simple.
- Customer Engagement/Relationship - Customers are a lot like parents of teenagers: they prefer no surprises. When your customer calls asking the status or location of their product, you can tell them.
- Time Management - Have you ever noticed how much more quickly things get done when you monitor them? The same is true for shipping and delivery, when entities know you’re monitoring their progress, they will try to work more efficiently to meet that goal.
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.
Five Simple Tips to Improve Your Company’s Supply Chain Visibility
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.
- Meet with your team and consider these questions -
- What SCV benefits can we capitalize on?
- Does increased speed to market take greater priority over risk management?
- What are our customers goals and how can we help them achieve them?
- Use the answers to those questions to define strategies, and decide who will perform them.
- Give your goals a deadline.
- Keep tabs on how it’s going. Talk to your team members. Is there something, some new tool or technology that you could get for them that would make it easier for them to achieve their objective?
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:
- Audit your existing systems. Are there upgrades or add-ons available that would help you?
- Automate work processes where possible. Apply track and trace systems, RFID technology or smart sensors to boost efficiency, reduce wasted time and increase visibility across your supply network.
- Don’t try to do it all at once. Pinpoint your organization's needs, your customers' needs and your partners' needs, and then determine what your resources will allow.
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.