4 steps to achieve optimum supply chain visibility
September 18, 2017
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:
- Answer the question, what is supply chain visibility? Then help your suppliers understand how you all benefit from increased visibility.
- 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
- 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.
- 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.
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Customer Success Stories
We have found them to be an excellent business partner. Through the implementation of both their supply chain and sourcing software they have more than proven themselves in giving us a product that functions the way we need it to. LIMA has been a fantastic supply chain visibility tool, calculating real accurate landed cost position throughout the order lifecycle. The LIBERTY software matches our product sourcing business needs perfectly. PLM systems I’ve previously used, often bring lots of issues through implementation, but these guys managed this and I’ve got highly satisfied users.John Amm - GM Global Sourcing, Myer
The solution has realised more benefits than we initially thought possible. Claims notifications are being handled in a fraction of the time. Suppliers are making fewer calls into the office and quality scores have increased dramatically. All of this can only have had a positive impact on the customer experienceMartin Ashfield, head of commercial property claims, AXA
The system alerts us to exceptions against our plan, allowing us to focus our attentions on solving the real issues in the supply chain. Having a comprehensive audit trail of events for everyone to see has resulted in significantly improved service levels from our suppliers and agents.Darren Walker, head of generics buying and UK trading, Alliance Healthcare
Now our buyers can exchange photographs with suppliers and have a real-time dialogue as they develop styles, while buyers out in the Far East can send detailed and accurate information back to their teams in the UK. It has certainly cut lead times and reduced errors.Maxine Walter, supply chain co-ordination manager, New Look
The time it takes to compile reports has been significantly reduced; a report which used to take five whole days to complete is now accomplished within a single day!Sam Brown, Responsible Sourcing Co-ordinator - John Lewis.