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4 steps to achieve optimum supply chain visibility

September 18, 2017
Posted by James Hargraves

 

One of the buzzwords that emerged during 2016 was ‘Supply Chain Visibility’ or ‘SCV’ and according to The Supply Chain Dive awards – SCV lies at the intersection for every industry, for which it deserves its own special award under the category of “Obsession of the Year”.

According to the 2017 Supply Chain Worldwide Survey by a shipper stresses, SCV has now risen from the 6th most important strategic priority in 2015, to 3rd in 2017 for 623 industry professionals surveyed across 17 countries. Furthermore, only 6% of firms said they had achieved this target so there is still a great deal of progress to be made.

Why is supply chain visibility important?

Supply chain visibility allows production managers to understand the source route of raw materials at their suppliers, through to the finished products rolling out of their factories. SCV allows businesses to see exactly where their current processes are under-performing, so that they can be well prepared for minor disruptions, or catastrophic events, and redirect resources for the greatest outcomes.

Good SCV generates reliable, data-driven insights that can be used to make improvements to business operations. Armed with proof, production managers have the evidence they need to request additional supply chain investment, or to make significant changes to production processes.

Supply chain visibility is also increasingly important as manufacturers move towards a demand-driven production model. By exposing and sharing data across the supply chain, manufacturers and suppliers can better work collaboratively to manage their procurement and supply processes. Everyone in the supply chain benefits – not just the manufacturer.

The potential savings are significant and most manufacturers are keen to introduce spend cost analysis techniques to cut procurement costs – and SCV feeds into that.

Why is supply chain visibility difficult to achieve?

Although everyone benefits from SCV, there are a number of hurdles to overcome. First, understanding what supply chain visibility is, and educating your trading partners as there is a very real possibility that your own suppliers are unaware of the benefits.

Second, solid supply chain visibility requires closer collaboration between you and your supply chain partners. More than simply sharing high level information, your organisations will need to “see” inside each other. Not only does this require a deep level of trust, but also the implementation of supply chain visibility software to make that sharing possible. Technology plays a vital role in achieving transparency in the supply chain.

For some businesses, sharing data in this way runs counter to their instincts for self-preservation – they are very uncomfortable with exposing their inner workings. Others may not want the initial overheads involved with deploying supply chain visibility solutions and ignore the benefits that will realise in future. Others may not have the ability to properly view their own supply chain data in-house, let alone share it with their partners.

Here are 4 steps to achieving effective supply chain visibility

The rewards are significant if SCV is implemented successfully. Obviously, every supply chain is different, but the following steps will help you get started:

  1. Answer the question, what is supply chain visibility? Then help your suppliers understand how you all benefit from increased visibility.
  2. Work with suppliers to understand the information that you need to improve the service offered to each other. These key metrics and insights will form the basis of your SCV
  3. Analyse the systems used in-house by each supply chain partner, and identify gaps that need to be resolved in order to improve information flow at the local level.
  4. Using your identified metrics and gaps in current provisions, investigate the available supply chain visibility software Work with software vendors to identify a platform that meets your current business intelligence needs, but will also flex to increase supply chain agility.

At the heart of your supply chain visibility improvement program will be communication – the better able you are to discuss SCV and its benefits now internally as well as with your external extended enterprise, the easier you will find it to share data in future. Successful and best-in-class companies are more likely to have visibility into sustainability, green metrics and supply chain disruptions.

To learn more about supply chain visibility solutions and how they will benefit you and your organisation, please get in touch, or tweet us @adjunosolutions

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James Hargraves – Business Development Director, Adjuno
James is a supply chain process and visibility expert, and has worked for a variety of global 3PLs, focusing on delivering cost and administrative efficiencies to retail clients. He has previously worked in Australasia and Dubai and has been based in Hong Kong since 2010. James currently manages the Supply Chain team at Adjuno, working with our global retail customers to optimize their supply chains.