Exploring Supply Chain Visibility

Exploring Supply Chain Visibility

Improved visibility in complex supply chains leads to fewer disruptions, enhanced customer satisfaction, and reduced costs. A supply chain visibility (SCV) initiative enables product teams to identify and address weaknesses in the supply chain—such as inventory shortages or order fulfillment issues—before they escalate into significant problems.

Sounds promising, doesn’t it? However, many companies have discovered that obtaining comprehensive end-to-end insights is more challenging than anticipated. Let’s explore the reasons behind these difficulties and discuss strategies to overcome common obstacles.

What Is Supply Chain Visibility (SCV)?

Supply chain visibility (SCV) refers to the ability to track individual components, sub-assemblies, and final products as they move from suppliers to manufacturers and ultimately to consumers. The scope of SCV—such as whether raw materials are included and if tracking is done both forwards and backwards—varies depending on the product.

SCV is facilitated by supply chain management technology, which provides real-time data about logistics and other aspects of the supply chain. This data helps companies navigate inventory shortages, avoid bottlenecks, meet compliance requirements, and ensure products are tracked through to delivery.

SCV can apply to visibility both within a company’s own operations and across its partner network. Internal visibility is generally less challenging, as the company controls access to the necessary data sources. However, tracking the movement of a product from a factory in China to a U.S. assembly plant, then to a wholesale distributor, and finally to the customer or retailer, is a complex process. This requires the integration of various partner systems.

Technologies such as procurement, inventory, and order management software, which are typically part of a company’s broader enterprise resource planning (ERP) system, are crucial for achieving this visibility.

Key Takeaways

  1. Comprehensive Coverage: Supply chain visibility encompasses both internal business operations and those of external partners. It tracks raw materials through production and assembly into finished products, all the way to the customer’s doorstep.
  2. Complex Networks: Modern supply chains are more intricate than ever, relying on diverse supplier networks across the globe.
  3. Enhanced Transparency: Transparency throughout this expansive network can improve customer and supplier relationships, boost supply chain efficiency, and increase profit margins.
  4. Strategic Improvement: Enhancing supply chain visibility involves automating supply chain processes for maximum efficiency, investing in advanced supply chain management software, and leveraging insights from this software to drive informed decision-making.

Supply Chain Visibility Explained

Over the years, as companies have outsourced more aspects of their supply chains, maintaining control over operations has become increasingly challenging. This is where supply chain visibility (SCV) becomes crucial.

SCV involves a company’s ability to consistently manage and keep records of all raw materials and components from suppliers and manufacturers as they progress through the supply chain. Companies must track the movement of all products into, within, and out of their facilities.

To achieve this, many companies invest in supply chain management technology. This technology automates error-prone processes, reduces operational and overhead costs, and makes information visible across the various departments responsible for managing the supply chain. With improved SCV, companies can monitor the status of raw materials, track shipping, and predict delivery dates for orders from both customers and suppliers.

Enhanced visibility into the supply chain network is also beneficial for internal business processes. It can alert employees to inefficiencies and suggest necessary adjustments. Without this data, businesses risk losing sales and disappointing customers with inaccurate product availability and inconsistent or nonexistent order tracking information.

Goals of Supply Chain Visibility

The primary objective of supply chain visibility (SCV) is to gather superior information about supply chain operations, enhancing efficiency, minimizing risks, boosting customer satisfaction, and increasing profits. Companies achieve these outcomes through better planning, insights, and execution facilitated by supply chain management software.

Success hinges on access to real-time, shared data across every node in the supply chain network. This often involves setting up a centralized control tower or hub, where SCV software analyzes supply chain data, such as product demand, sales forecasts, and material availability. This control tower serves as a comprehensive source for decision-makers to review and manage all supply chain activities, ensuring informed and timely decisions.

Types of Supply Chain Visibility

Supply chain visibility (SCV) is a multifaceted concept, and the areas of the supply chain that require increased transparency vary by industry and company. When determining where to gain deeper insights, companies should consider cargo location, rates, auditing records, and supply chain activities.

Cargo Location

Real-time visibility into the location and status of shipments is one of the most crucial and foundational aspects of SCV. Knowing the exact whereabouts of an order enables businesses to schedule repurchases and deliveries more effectively, manage payments, and keep both internal and external stakeholders informed about the status of materials and goods. These improvements enhance operational efficiency. Additionally, as customers increasingly expect to track their purchases from the warehouse to their doorstep, visibility into cargo location helps build customer trust.

Rates

Rates refer to the costs associated with the transportation of cargo. Visibility into these costs helps companies understand their expenses related to moving, shipping, and delivering freight. As businesses expand their order volumes and monitor shipments, available carriers, and potential fulfillment locations, the complexity increases. Full visibility into various rates is essential for supply chain leaders to conduct cost-benefit analyses and track company spending accurately.

Auditing Records

SCV provides accurate and detailed information on past transactions and documentation of freight activities. This data is invaluable during the auditing process, allowing businesses to thoroughly inspect, review, and validate completed orders. Greater transparency in auditing also simplifies regulatory compliance, which is particularly important for companies operating across multiple countries.

Supply Chain Activities

Transparency in supply chain activities involves tracking quotes, order receipts, bills of lading, proof of delivery, and more, then managing and sharing all this documentation. This comprehensive tracking allows organizations to trace every supply chain activity, facilitating the detection, identification, and resolution of any issues that may arise.

4 Key Reasons Why Supply Chain Visibility Is Essential

Why is supply chain visibility (SCV) so important? Insights into the inner workings of a supply chain can significantly impact operations, customer satisfaction, compliance, and company growth. The benefits can be summarized into four main areas:

1. Complexity

Modern supply chains are global, involving diverse supplier networks. Achieving insights across this network requires not only the right software and key performance indicators (KPIs) but also trust and transparency. Effective SCV helps prevent logistical issues that can damage customer relationships and erode profit margins.

2. Customers

Ensuring the availability of the right products at the right locations and times is fundamental to customer satisfaction, retention, and acquisition. Customers now expect fast delivery and the ability to track their orders from the loading dock to their doorstep. SCV meets these expectations, enhancing overall customer experience.

3. Compliance

International supply chains must navigate complex regulatory requirements, including evolving trade agreements, procurement rules, and governmental tariffs. SCV enables companies to monitor and manage variables such as volatile monetary exchange rates, extreme weather, and political or social unrest that could delay shipments. Additionally, SCV helps ensure that all partners in the supply chain adhere to ethical standards, safeguarding the company’s brand reputation.

4. Competitiveness

The supply chain represents a significant portion of many companies’ operating budgets, and inefficiencies directly impact the bottom line. SCV allows companies to identify and rectify inefficiencies throughout the supply chain, leading to cost reductions and improved profitability.

What Does a Highly Visible Supply Chain Look Like?

Transparency within the supply chain can revolutionize a company’s operations by enhancing interactions and relationships with external suppliers and customers.

A highly visible supply chain meticulously tracks every aspect of its operations, whether monitoring supplies and products at a batch or individual item level. Key elements include safety, legal, and material certifications, order and supplier information, the location and status of various suppliers, and manufacturing dates.

High-quality supply chains integrate data from internal operations and suppliers’ systems, allowing businesses to maintain detailed oversight of each component they use or sell. This transparency into upstream partners ensures that companies are promptly notified of any issues, giving them sufficient time to address problems or find alternative solutions.

For example, a manufacturer with this level of visibility can track raw materials from their source to sub-suppliers or suppliers. From there, the company can monitor the movement of these materials or components as they reach its manufacturing plant, where they are transformed into finished products. Documentation is maintained for the use of each raw material and component within the production process, ensuring accurate inventory records. Upon completion, the business can see the exact location of the finished goods.

As goods leave the plant, companies that purchased these products can track their movement on ships, airplanes, or trucks through customs and other checkpoints. Once an end customer buys these products, they can track the location and shipping status of their purchase until it is delivered.

In the event of a return, reverse supply chain visibility enables a company to track the returned item, receive it, and document its arrival at the fulfillment center. Ultimately, in the most efficient supply chains, there is a constant exchange of communication and information among all supply chain participants, ensuring everyone has access to the most up-to-date data.

3 Steps to Enhance Supply Chain Visibility

Increasing supply chain visibility (SCV) involves gathering and disseminating timely, relevant supply chain data across the organization and ensuring it’s analyzed and acted upon. This is achieved through a three-step process:

1. Select and Implement SCV Technology

Start by choosing comprehensive supply chain management software that automates the entire process, from raw materials to the delivery of finished goods to the consumer. Begin by mapping out your supply chains to determine which modules you need. For instance, if your manufacturing is entirely domestic, you might not need features related to exchange rates.

SCV software ranges from simple point solutions to comprehensive suites with multiple modules that integrate supply chain and logistics capabilities with core back-end systems like ERP and CRM. Look for capabilities in four key areas: customer demand, inventory control, warehouse management, and fleet management. Essential modules often include supplier relationship management, order processing, and shipping and delivery tracking.

2. Focus on Process Improvements

Before implementing new technology, assess and improve your existing processes. This step might be necessary before selecting SCV technology if your current processes need significant work.

After choosing the right SCV technology, collaborate with your software provider or integrator to ensure your team maximizes its benefits. Eliminate manual or spreadsheet-driven processes, which are typically limited, inefficient, and lack scalability. Ensure that all decision-makers receive relevant reports related to supply chain activities and have the capability to act on that information.

3. Drive Efficiency

This step is where you realize returns on your software and process improvement investments. As your team gains deeper insights into the supply chain—from material sourcing to manufacturing to the end customer—they will inevitably identify areas for improvement. By leveraging these insights, you can drive efficiency and enhance overall supply chain performance.

2 Examples of Supply Chain Visibility

LovelySkin

Founded by Dr. Joel Schlessinger in 1997, LovelySkin is an ecommerce site dedicated to providing skincare products and dermatology information. As the business grew, partnering with more brands and expanding its product range, it encountered significant logistical challenges. The increasing volume of inventory, orders, and vendors was managed through disparate systems, leading to confusion and potential errors.

By replacing QuickBooks, Excel, and other homegrown systems with NetSuite’s supply management systems, LovelySkin gained better control over its inventory and future business planning. The real-time updates and demand planning capabilities of the new platform enabled LovelySkin to track all components from assembly to delivery, place replenishment orders based on sales trends, avoid overstocks, and reduce excess inventory.

This transition was particularly beneficial during the early stages of the pandemic when LovelySkin experienced a 300% increase in orders. NetSuite’s comprehensive system allowed the company to efficiently manage this surge in demand and prepare for future fluctuations, ensuring seamless operations across its entire network.

Enjoy Life

Chicago-based Enjoy Life, founded in 2002, offers a range of allergy-free and gluten-free snacks and ingredients. The company quickly expanded from its initial 12 baked goods, achieving significant yearly growth milestones. In 2015, global snack company Mondelez International acquired Enjoy Life, further fueling its success.

However, as Enjoy Life reached $40 million in revenue with nearly 100 SKUs, the limitations of QuickBooks financials and Fishbowl inventory management became evident. The lack of real-time inventory data to track product expiration dates and analyze product-related information hindered operational efficiency.

Turning to NetSuite’s supply chain management systems, Enjoy Life improved data exchange and communication with its numerous distributors, including a key partnership with grocery chain Whole Foods. The business also ventured into direct-to-consumer ecommerce. With robust software support, Enjoy Life has tripled its sales, enabling more customers to enjoy their allergy-free snacks without operational concerns.

These examples illustrate how leveraging advanced supply chain visibility technologies can streamline operations, enhance efficiency, and support significant business growth.

7 Supply Chain Trends in 2023

Supply chains are becoming increasingly digital, cloud-based, and agile. Here are seven trends to consider as you update your supply chain strategy:

1. Digitization

The shift to remote work highlighted the inefficiency of manual processes and paper records in managing modern supply chains. Spreadsheets are not much better. By digitizing the supply chain, business leaders can make timely decisions using demand forecasts, and better manage inventory, suppliers, transportation, and storage. Digitization significantly enhances operational efficiency and decision-making capabilities.

2. Cloud Adoption

The limitations of legacy on-premises systems and storage are becoming clear. Supply chain software delivered as-a-service is accessible to decision-makers wherever they are and is often easier to integrate with partner systems. Cloud-based solutions offer scalability, flexibility, and improved data accessibility, making them essential for modern supply chain management.

3. Focus on Resilience

Modern supply chains need to adapt in near-real-time to cope with disruptive events. Key elements include end-to-end visibility, supplier relationship management capabilities, contingency planning, crisis management processes, and incident response plans. Resilient supply chains can quickly adjust to unexpected changes, minimizing disruptions and maintaining operational continuity.

4. Nearshoring and Reshoring

Companies are increasingly looking to reshore parts of their supply chains to their home country or nearshore them to nearby regions. This approach can lower transit and shipping costs, increase flexibility, reduce lead times, and enhance the ability to detect risks and potential product defects. Nearshoring and reshoring also respond to consumer demand for locally produced goods and support sustainability goals.

5. Reverse and Circular Logistics

The concept of a circular supply chain is gaining popularity as companies aim to make their manufacturing processes more sustainable by reusing and recycling materials. Reverse logistics focuses on capturing value from or properly disposing of excess goods. Effective management of reverse logistics is critical to profitability, especially as U.S. shoppers returned merchandise worth over $300 billion in 2019, much of which ended up back with distributors.

6. Automation and Robotics

Advanced automation and robotics, both on manufacturing lines and in software via robotic process automation (RPA), enhance operational efficiency and reduce errors from repetitive manual tasks and data entry. Automation streamlines processes, increases productivity, and frees up human resources for more strategic activities.

7. AI and Machine Learning

Artificial Intelligence (AI) and machine learning are transforming supply chain efficiencies through trend-spotting and self-learning capabilities. These technologies are increasingly being incorporated into top supply chain and logistics software, improving decision-making, planning, forecasting, and advanced calculations. AI and machine learning enable more accurate predictions and optimize supply chain operations.

By embracing these trends, businesses can enhance their supply chain operations, improve resilience, and stay competitive in an ever-evolving market.

Enhance Supply Chain Visibility with Supply Chain Management Software

The level of visibility an organization has into its supply chain can significantly impact its success or failure. Insights into the location and status of raw materials, finished products, delivered orders, and returned items are crucial for operational efficiency and long-term financial success. NetSuite’s supply chain execution software simplifies the management of this complex network. This technology tracks the location and status of current, in-transit, and work-in-progress inventory while automating manual processes such as managing purchase orders, work orders, receipts, and vendors.

NetSuite also helps companies balance supply and demand with its demand planning module, which reviews historical data and other factors to make better procurement decisions. The tool employs various calculations to generate accurate forecasts. Additionally, NetSuite provides a centralized database that facilitates communication with key supply chain stakeholders and allows close monitoring of all supply chain activities.

Achieving full supply chain visibility is challenging, but it is essential for any business that relies on a supply chain to generate revenue and aims to satisfy and retain customers. Taking steps to enhance transparency, efficiency, and accountability throughout the supply chain can lead to improved customer and supplier relationships and increased financial success. By implementing NetSuite’s comprehensive supply chain management software, businesses can better navigate the complexities of their supply chains and position themselves for sustained growth and profitability.

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Exploring Supply Chain Visibility
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Exploring Supply Chain Visibility
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Ensure supply chain visibility and operational efficiency with NetSuite. Discover the benefits for your business.
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ABJ Cloud Solutions
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