Supply Chain Visibility Guide with Definitions and Examples
The Supply Chain Visibility Guide
If you’ve been paying any attention over the past few years, you’ve learned just how vulnerable supply chains can be. Supply chain visibility is one of the major ways companies can protect themselves as well as consumers from logistical problems that cause shortages. With the ever-increasing globalization of supply chains, supply chain visibility is vital, not just down to your suppliers or factories, but also across the whole supply chain, all the way down to the first contributors.
Read on to learn everything you need to know about supply chain visibility.
What is Supply Chain Visibility?
In order to define supply chain visibility, it’s important to define the term “supply chain”. “Supply chain” refers to a network of companies, facilities, and businesses that are involved in the process of bringing a product from raw material to finished product. Supply chains can be found in every industry, from makeup and beauty to food and beverage to fashion and textiles, and mining, etc.. Rarely are two supply chains the same, because the process of bringing a product from raw material to finished product often takes place across various countries, passing through many hands, workers, contributors, factories, suppliers, and processes.
Supply chain visibility, thus, is the tracking of all components, sub-assemblies, and final products. Most companies track their inventories to prevent shrinkage (product loss), which is one form of supply chain visibility. But with the increased complexity of the supply chain, tracking the entire journey from source to shelf further improves efficiency and prevents bottlenecks that cause shortages, cost time, and waste money.
Supply chain visibility requires detailed records and transparency, as well as communication across all entities in the supply chain. Oftentimes, these records and communications are very manual, time-consuming, paper-based, and error-prone. So in addition to the importance of overall supply chain visibility, is the digitization of supply chain visibility and inventory management for greater ease and precision in tracking operations across the supply chain.
The State of Supply Chain Visibility
With the lingering effects of the COVID-19 pandemic, even the general population has noticed the many disruptions to supply chains. Although more people than ever are relying on e-commerce to purchase goods, investment into supply chain visibility has yet to catch up with growing consumer demands. In fact, most shippers and logistics companies are lacking end-to-end supply chain visibility, which – as we’ve seen – can have major consequences for businesses and consumers.
Without supply chain visibility, businesses often deal with revenue spent on inefficiencies that could otherwise be solved. For example, freight spend may rise by 30% or more per year. Late or missed deliveries lead to poor customer service ratings, and unhappy customers don’t typically stay loyal. Poorly managed dock schedules can cause bottlenecks that have a wide-scale effect, while lack of accountability among your carriers may mean you’re paying more than you should. Essentially, if you’re not proactively investing in supply chain visibility, you’re going to pay for it in dozens of other ways, from inefficient processes to poor product quality to inventory loss.
Supply Chain Visibility and Analytics
As former CEO of HP Carly Fiorina once said, “The goal is to turn data into information, and information into insight.” Analytics are a powerful way for any company to assess and improve processes. This principle is especially true with supply chain visibility. In fact, one of the main goals of supply chain visibility is to collect data so a company can optimize their supply chain to boost its efficiencies and bottom line.
With the use of supply chain visibility software, companies can glean data at every step of the supply chain. If there’s a slowdown occurring somewhere, money being wasted, product being lost, etc. that data can be turned into powerful insights and analytics used to improve your processes.
Real-Time Visibility in the Supply Chain
Why is real-time visibility in the supply chain so important? Well-planned logistics, manufacturing, and production require real-time data. Planning shipments and inventory does you no good if the only information you have is where your cargo was last Wednesday. Claiming you have a handle on your supply chain without accurate, real-time visibility into every step is costing you time, money, and true ownership over your product. With supply chain visibility software, tracking the journey of your products in real-time can help you with everything from scheduling your next repurchase to keeping on top of payments to ensuring high-quality and ingredients, materials, and products. Plus, real-time visibility shared along the supply chain allows everyone to be on the same page, at the same time.
The Benefits of Supply Chain Visibility
Now that you understand more about supply chain, and supply chain visibility, you likely understand its importance. But what exactly are the benefits of supply chain visibility, and how can it help your business thrive?
- Manage the complexity of supply chains: With so many players involved in a supply chain, there are a lot of shipments to track, payments to record, and rates to calculate. Supply chain visibility helps automate these processes as well as keep track of transactions more precisely. Plus, if there’s a slowdown or other issue, it’s easier to pinpoint the problem when you have all the data across every supply chain stage.
- Comply with international regulations: From trade agreements and procurement rules to tariffs, international shipping has a lot of regulations to deal with. Supply chain visibility helps you ensure compliance with these standards, and avoid costly border seizures and loss of product.
- Maintain your brand ethics: Are you concerned about unethical labor practices? Maybe your brand is passionate about climate action or poverty alleviation. Supply chain visibility helps you to track labor practices so you can uphold your standards throughout the entire supply chain.
- Mitigate and manage risk: Inefficiency along the supply chain will significantly impact your operating costs, bottom line, and ability to comply with international regulations. Real-time data from supply chain visibility allows you to ensure compliance, increase efficiency, and reduce costs, thus improving your bottom line.
Examples of What Supply Chain Visibility Does
Now that we’ve discussed the importance of supply chain visibility and how it can help you, let’s look at a few examples. Supply chain visibility is a broad concept and can be used across all industries. However, here are a few examples of what supply chain visibility can do for a business:
- Protect inventory: It’s pretty much a universal truth that shrinkage happens. Whether products are lost, stolen, or damaged, inventory shrinkage costs you money. Supply chain visibility, however, can do a lot to help you account for your inventory, which in turn lessens your shrinkage.
- Ensure sustainability: Because supply chains can be so complex and span across the globe, it can be difficult to track and ensure sustainable practices. From labor and fair wages to carbon footprint reduction, eliminating plastics, and beyond, getting a handle on your supply chain through visibility is key to ensuring you’re meeting sustainability goals.
How to Improve Your Supply Chain Visibility
If you’re reading this guide, chances are, you’re interested in improving your supply chain visibility. You understand the benefits of supply chain visibility, but what can you do to improve yours? Here are four steps you can take today to improve your supply chain visibility:
- Choose the right supply chain visibility software: You’re going to want to look for supply chain visibility software, such as BanQu, that is feature-rich and right for your business. For smaller supply chains, a simple point product may be exactly what you need. On the other hand, if your supply chain is complicated, you may want something with multiple modules and integrations with CRM and ERP platforms. Mapping your supply chain with the support of supply chain technology can help you decide which modules you’ll need and which you can do without.
- Improve processes: Once you have your supply chain visibility software, you can take advantage of reports and analytics to find ways to improve. Typically, you’ll want to shift away from spreadsheets or manual processes and automate where you can.
- Increase efficiency: The more insights you and your team gains on the supply chain, the more efficient you will be able to make your processes. This will help you cut down on waste as well as better invest your money.
- Ensure your solution is a win for your vendors and suppliers: In order to reach complete end-to-end supply chain visibility, ensuring that the players in your entire supply chain also benefit from your brand-level decisions and solutions is key to building lasting relationships and increasing satisfaction and productivity. When done right, your supply chain visibility solution should also make your suppliers’ and vendors’ lives easier!
Increasing Supply Chain Visibility with BanQu
With the complexity of the modern supply chain, you need powerful software to help you increase your supply chain visibility. Track shipments, assets, payments, transactions, and more, with top-notch technology and ease. With BanQu, you can keep track of everything that matters. BanQu connects more than 2.5 million individuals across 58 countries and 13 languages, helping businesses get a hold of their supply chains. Request a demo today to see what BanQu can do for you.