Supply chain visibility – getting the infrastructure right

Supply Chain VisibilityIn today’s world of supply chain management, a phrase that is often repeated is “supply chain visibility,” but what do we mean by this phrase, and how can it best be achieved?

Supply chain visibility can be translated as being able to keep a track on inventory wherever it is within the supply chain at any one moment in time. But part of the problem with achieving supply chain visibility is that it means different things to different people, depending on the business sectors they operate within, and to some extent, also dependent on global supply chain trends.

The importance of having the right supply chain visibility infrastructure in place

But it is not just about simply knowing where inventory is within the supply chain at any one moment in time; it’s also about being able to do something useful with that information. Just knowing that something is going wrong isn’t much help in itself, unless you can either take steps to prevent it going wrong in the first place, or retrospectively take action to repair the damage. In other words, information for information’s sake only, whilst important, is only part of the battle. Winning the war is all about using that information to control the outcome to suit your needs.

The problem is that the way that many supply chains are made up, they focus on core growth initiatives without having the necessary internal IT infrastructure in place to be able to implement and support dynamic change. So we’re now going to look at six steps that you can take in order to achieve supply chain enlightenment and bring about actionable supply chain visibility.

Step 1 – Checking the lines of communication

The term supply chain visibility means different things to different people within the supply chain. So it’s important to be able to determine what it is that your company is looking for in terms this visibility, and how important this visibility is to partner members of the supply chain, including the customer. Are we simply talking about freight capacity, or are we talking about manufacturers and lead times, and does this information  need to be available to all 24/7/365?

It is vitally important for all members of the supply chain to know not only what their functions are, but where they need to be, and where it is they can go within the supply chain, in order to work systematically with other partners and so achieve best results. All supply chain stakeholders, at every level of the operation, must be involved in order to achieve complete supply chain visibility.

Step 2 – Nurturing trust

Supply chain visibility is all about sharing information and being able to trust partners within the supply chain with that information. It means identifying the roles of various partners, whether they are a manufacturer, a 3PL supplier, or a warehouse, and trusting that they know what they’re doing.

It’s important to be able to establish benchmarks, and to agree expectations, so that everyone knows not only what they’re doing, but what they are accountable for. Goals that are poorly understood, or the failure to trust any member of the supply chain with any of the vital data, will ultimately lead to all parties being disappointed with the end results, and will damage supply chain visibility.

Step 3 – Be prepared to invest in technology

It’s important to have the right tools to do the job. The only way to achieve better supply chain visibility is to ensure that the right infrastructure is in place in order to gather the necessary resources that need acting on. It may mean either partnering with a service provider who already has the appropriate software, or working with a number of partners, each one contributing to a part of the infrastructure, to ensure that overall expectations can be met.

Step 4 -Setting your KPIs

Identifying your Key Performance Indicators is vital. These are the yardsticks against which all progress is to be recorded. It’s important to not only ensure that the KPI’s are achievable, but that they are measurable, in order to be able to track progress on the way to achieving complete supply chain visibility.

Step 5 – Keeping all supply chain partners aware

The better supply chain visibility becomes, the more it will expose different components within said supply chain. It is therefore important, not only that all stakeholders are clearly identified, but that they are fully aware of their own visibility in terms of their contribution. Before making any decisions, all partners within the supply chain need to be fully aware of how these decisions impact on their own sectors and how they contribute to overall supply chain visibility.

Step 6 – Exploring synergies to achieve best results

As supply chain visibility manifests itself, it will become apparent where processes need to be optimized and deficiencies need to be reduced in order to drive down costs. Clear communication between all parties within the supply chain is critical to managing this information, and providing the necessary insights into achieving individual improvements that complement the whole. Once these insights are understood, and gaps have been identified, synergies can be explored to close these gaps down. In this way, supply chain visibility becomes a self managing process.

Why is supply chain visibility desirable and what makes it such an important tool? Have your say at the feedback section below.

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