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The Ultimate Guide to Supply Chain Visibility for Industry Professionals

June 13, 2023
Joe Fitzpatrick

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Academic researchers talk a lot about supply chain visibility. Logistics is changing fast, they say, because of technology, and visibility is one of the big topics.

But they admit there’s a gap between theory and practice. The sci-fi world that researchers have in mind when they write about supply chain visibility doesn’t look much like the one logistics professionals have to work in.

Senior executives at large companies keep calling supply chain visibility a top priority, and often say they’re afraid their own companies may fall behind. That could be because they’re not clear on what it means. Ask ten experts for a definition of supply chain visibility and you’ll get ten different answers.

There’s also no real consensus on how important it is, whether it needs to be driven from the top or by individual managers, and how best practice might vary between different types and sizes of companies.

With that in mind, this guide will try to summarize and simplify the available information on supply chain visibility, with a focus on the concrete actions you can take right now to achieve your own goals , whether that’s:

  • Increased efficiency,
  • Improved communication,
  • Career growth,
  • Better risk management, or
  • More accountability.

Let’s dive in.

What is Supply Chain Visibility?

Supply Chain Visibility is the availability of information about goods as they make their way through the commercial network. That might encompass production, logistics, and financial data.

And that’s about the limit of where most people agree.

The trouble starts when we ask questions like:

  • Whose information?
  • Collected by what means?
  • How specific?
  • Beginning and ending where?
  • Available to whom?
  • Available when?
  • Available in what form?

When we think of it this way, we can see that there is no point where a company can say ‘we’ve achieved visibility in the supply chain.’ It’s more like ‘security’ or ‘quality.’ There’s only the pursuit, faster or slower depending on strategic needs.

A common sense approach to supply chain visibility is to focus on how it might improve logistics or commercial performance.

For example, the ability to predict transit times and the production capacity of suppliers can lead to better decisions about how much inventory to keep on-hand and when to restock.

But here’s where the debate heats up. What is required to achieve such predictability? Can it be worth the resources, the data exposure risks, and the opportunity cost to invest in systems and operational change, when even newer technology might emerge in the coming years that makes these efforts redundant?

Supply Chain Visibility Benefits: Not Everyone Agrees

To simplify the various points of view, let’s imagine that industry leaders fit into two broad camps:

The Maximum Transparency crowd advocates for visibility as a key objective in and of itself. At the extreme end, they believe that as much collaboration as possible with upstream and downstream partners brings about the best business outcomes for every participant.

Therefore, they tend to include manufacturing and sometimes even raw materials sourcing data in the scope of the supply chain, not to mention transactional data all the way down to the end consumer and their feedback.

They see automation as virtually synonymous with visibility, and insist on the need for real-time data to inform up-to-the-minute decisions.

Whereas,

The Customer Expectations crowd argues that visibility alone has no intrinsic value. Companies often have access to enough data to improve their operations in a risk-managed way, and do not do so.

Members of this group usually believe that proprietary data is a competitive asset, and so each instance of sharing it with partners needs strategic justification.

They say companies should just ‘get the right data at the right time to the right person,’ with the overriding goal of building the supply chain that gives customers what they want.

In the real world, people sit between these two extremes, usually with a mix of views from each side.

Companies have their long-term trusted partners and their opportunistic relationships. They have their functional silos and their digital change initiatives. They have their social responsibilities and their obligations to shareholders.

These are the considerations that naturally inform when to bring in technology, how closely to collaborate with upstream and downstream partners, and what’s included in the scope of visibility in the supply chain.

But more than any of that, companies have to consider their level of digital maturity. No good can come from paying for software, devices, or services if your people aren’t ready to use them.

Fantasy vs. Reality: Three tiers of supply chain visibility:

  1. Complete fantasy for the foreseeable future:
  • A universal standardized data-sharing protocol used by all participants in the supply chain.
  • Fully-automated manufacturing and distribution, with drones and robots taking care of most of the hard work.
  • End-to-end visibility throughout the commercial network, from the primary sector to the end consumer and reverse logistics.
  1. Feasible for the most digitally mature companies
  • Forecasting demand, identifying disruptions in advance, and optimizing inventory levels and processes with predictive analytics.
  • Monitoring and tracking shipments and warehouse layouts in real time using satellites and advanced sensors.
  • Maintaining a reliable ledger of all available supply chain data secured by blockchain technology.
  1. Realistic even for companies playing catch-up on technology
  • Setting up semi-automated processes to exchange information with carriers, suppliers, or other partners.
  • Establishing a single source of truth where supply chain data from different sources can be collected and analyzed.
  • Implementing simple technologies like barcoding or RFID for inventory tracking.

In almost every case, it makes sense to accomplish tier 3 in full before turning your attention to more complex technology.

But what if you want to get a more precise assessment of your organization’s readiness for supply chain visibility?

Checklist: How Visible is Your Supply Chain?

To investigate your level of visibility in the supply chain, you can consider four types of data 1 :

  • Internal (e.g. warehousing, production, financial information)
  • Upstream (e.g. carrier and supplier performance, order status, lead times)
  • Downstream (e.g. transportation tracking, demand forecast, customer insights)
  • Other Data (e.g. competitors, regulators, weather events, etc)

And five visibility factors:

  • Thoroughness (shipment status or precise timings? SKU counts or unit data?)
  • Timeliness (real time data or periodical reports?)
  • Ease of access (a single graphical dashboard or many separate databases?)
  • Data Quality (is it reliable, is it consistent, is it accurate?)
  • Cost to Collect (can sensors collect the data or do workers have to do it?)

If we plot these across two axes, we have a 20-point supply chain visibility checklist. In filling out the table, the biggest gaps, and therefore risks and opportunities, quickly become apparent.

Three things any manager can do to Improve Supply Chain Visibility

There are three basic initiatives that any company can take at almost any scale. They can be spearheaded by warehouse managers, transportation leads, IT heads or senior executives.

These are:

  • Collecting a little more data than you are right now
  • Asking your partners to share a little more than they are right now
  • Making your data a little more usable than it is right now

In a sense, every action that supports supply chain visibility fits into one of these categories.

Here are the easiest projects for each category:

Collecting Data: Give your workers tools that simultaneously makes their jobs easier and helps them generate useful data. e.g. RFID devices in the warehouse.

Sharing Data: Replace phone calls and emails with platforms that streamline inter-company processes like booking appointments at your loading dock.

Using Data : Set up a ‘system of record’ and connect it to your existing data sources.

The importance of the loading dock for supply chain visibility

“Collecting data” and “using data” refer to processes that take place within your own organization. But “sharing data” involves external relationships, and each party will have its own records and information systems.

There are a number of critical points of information transfer between different parties in the logistics system, many of which tend to rely on phone calls and emails:

  • Freight Procurement
  • Purchase Order Reconciliation
  • Customs Clearance
  • Transfer of Goods

Each of these activities is becoming more automated over time, but it only takes one missing link to undermine supply chain visibility as a whole.

Transfer of goods in particular is a process that cannot really be managed centrally. Each individual facility must coordinate with its carriers or suppliers. That usually involves calls, emails and maybe a spreadsheet, not connected to any online systems.

In other words, shipping and receiving is a broken link in the transfer of data through the supply chain.

And of all the places for it to be broken, it’s the one where the location and status of goods would be the most definite!

The work of the loading dock can get chaotic. In busy times, processes may be overlooked or done in a rush, with errors, like:

  • Matching POs to loads
  • Verifying the condition of goods
  • Recording arrival and departure times
  • Collecting proof of delivery/pickup
  • Updating inventory management systems
  • Identifying discrepancies

And even if they’re performed well, these data might not make their way to a system of record.

When we talk about getting “the right data at the right time to the right person,” we shouldn’t forget that the right person might be a security guard or a forklift operator.

These workers need to know about the trucks that come into their facility. Without automation, that knowledge comes through phone calls and emails.

And for that reason, facilities need dock scheduling. They need a system that their carriers will use, and that simplifies data collection for the handover between transportation and warehousing.

To learn more about integrating DataDocks at one or more of your facilities, book a demo with our team or call (+1) 647 848-8250

1 An alternative system more appropriate for some companies might be to split this into five data types: Demand, Production, Inventory, Transportation and External Factors

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