The importance of supply chain visibility

What is supply chain visibility?

In an increasingly globalised world, most products travel a long way before reaching the end consumer. While the final product itself needs to be transported from where it is manufactured to its retail or wholesale destination, the several components which make up that product are likely to have already travelled far and long before that.

That’s where supply chain visibility (SCV), which is an important tool in supply chain management, comes in. Supply chain visibility means tracking each one of the steps involved in the final product, from the making to its sale. With it, inventory and the activities relating to it are viewed clearly, which in turn enables stakeholders to have access to precise information and valuable data about each one of the steps. Managing a complicated supply chain (such as the ones we have nowadays) is a tricky task and a task that involves many others.

How simple or complex this task is going to be depends, of course, on the product. As a supply chain management example, take, for instance, the notebook, smartphone, or tablet on which you are reading now. If it mentions being “assembled in China”, it means that already as a final product, it has travelled thousands of miles to arrive in your pocket. Part of supply chain visibility means tracking that last leg of its journey. Another part of it would be tracking the previous stages, such as the manufacture and transportation of sub-assemblies, and the raw materials before that.

While the point of supply chain management — that is, managing the movement of goods, including all the processes involved in their making — is that it is a centralised activity, it takes care of processes taking place in different locations, with different actors, different goals, and different timeframes. As a supply chain manager, having access to all this data in a concise, clear manner is crucial. That is not to say that other roles cannot benefit from this data. Quite on the contrary, supply chain visibility can and should inform decisions and improve procedures all throughout the organisation.

How…

There is not just one way to implement supply chain visibility. It all depends on the specific company, product, or clients, which is to say that it is necessary to understand those in order to put into effect supply chain visibility that is tailored to a company’s, product’s, or client’s specific needs. Next, and as important as the needs, recognising the goals that are to be achieved through SCV are an indispensable step. What the organisation is expecting to gain from SCV, and what kind of relationship and experience it is trying to convey to its clients are good first questions, the answer to which will further inform the implementation of supply chain visibility.

A vital step to supply chain visibility is having access to information from all key players. To be sure, that data needs to also be reliable and current. Extra steps might be needed for that to be ensured, from its correctness to secureness.

Having the data is, of course, just another step in the SCV process. By itself, data is a closed book: it is necessary to have people who are able to open the book and read it, that is, analyse and interpret what that data is saying. After that, the analysis and interpretation of the information available can provide not only invaluable insight into how processes are being carried out, but for instance also make visible what is being done right or wrong, and how processes can be improved and made more efficient.

In theory, it is possible to do that through manual processes. However, the best way to apply supply chain visibility, while still tailoring it to one’s specific needs, might well be through supply chain management technology, which includes software devised to that end.

…and why?

Modern supply chains are complex. Keeping track of all the processes and parties involved in them is at least equally complex a task. At the same time, it is essential that these processes and parties are known and accounted for: in a best-case scenario, they can for instance improve efficiency and help decrease costs.

Not only that, but supply chain visibility also facilitates compliance-related issues, making it easier to understand who the key players are and where they are, facilitating processes related to understanding and dealing with trade agreements, procurement rules, tariffs, sanctions, and so on. When it comes to ethical concerns, SCV can also clear the way for more ethical processes, once the unethical steps and players involved in them are better recognised.

On the other hand, if things go awry, well-implemented supply chain visibility can provide key data as to what went wrong, which means one step closer to knowing how to solve it. At the same time, providing all stakeholders with up-to-date, reliable information about the situation strengthens the relationship between them, consequently ensuring customer satisfaction.