Mark Rose, Managing Director, Tracker UK, explains the definition, benefits and how to achieve supply chain visibility
The pandemic brought to light many challenges within the global supply chain, from port and border closures to product shortages. We are now two years down the line, but it has never been more important for companies to gain visibility of their supply chain, especially with the increase in online purchases and delivery demands.
What is supply chain visibility?
Essentially, supply chain visibility is the ability to track goods and other components as they move through the supply chain from a manufacturer to a retailer or distributor and finally to the consumer. Its scope depends on what is being tracked and where it is coming from.
The more complex the supply chain, the more risk of “blind spots” — instances where there is no real-time visibility of goods, most often in transit. Blind spots can severely impact decision-making and create inefficient processes.
What does visibility look like?
Supply chain visibility can essentially be split into two levels - low and high visibility environments. In low visibility environments businesses may have a rough idea of when to expect shipments but they might not know exactly where they are. This means they will also be unaware if a shipment gets delayed or lost due to cargo theft. This lack of visibility doesn’t just create problems in terms of delivery schedules; it can also lead to spoilage and revenue loss.
In a high visibility environment, however, businesses can track goods in real-time until they’re delivered. This is made possible by using technology such as telematics devices and sensors placed on high-value goods or in pallets of cargo. They will create an alert if there are any potential issues so that businesses can take steps to mitigate them. If a shipment won’t arrive in time, then the goods can be sourced from a different supplier or action taken to mitigate the disruption.
Why is visibility important?
The need for real-time, end-to-end cargo visibility has never been greater than in today’s complex, just-in-time global supply chain. A more transparent supply chain can completely transform business operations in several ways:
- Mitigate disruptions: 75% of companies have reported supply chain disruption due to the pandemic, which brought operations to a halt and resulted in a loss of incomei. High supply chain visibility helps businesses become aware of any disruptions almost as soon as they occur, allowing them to act quickly to minimize their impact.
- Improve efficiency: Understanding how products move through a supply chain can help pinpoint inefficiencies and identify areas for improvement.
- Meet customer expectations: 91% of customers are more likely to make a repeat purchase after a positive experienceii. However, when deliveries fail to arrive on time or are constantly pushed back, it can cause customers to feel frustrated and potentially be pushed to a competitor. Supply chain visibility means businesses can be proactive with any issues by being transparent with customers.
- Reduce costs: Half of all thefts from EMEA supply chains took place in the UK in the first half of 2020, with more than €85 million (£77 million) of products stolen from air, road, sea, and rail freight supply chainsiii. Telematics technology can monitor when trailer doors open and close when precious cargo is being transported. These sensors can alert drivers of break-in attempts and prevent instances of theft.
- Improve decision making: More visibility enables decision-making in real-time, which can improve supply chain efficiency and reduce loss. When businesses have a clear view of their supply chain, they can make more informed decisions that benefit business operations.
How to achieve supply chain visibility
Performing a supply chain analysis is the first crucial step to improving visibility. It involves evaluating each stage of a supply chain, from acquiring raw materials or supplies to delivering the finished products to customers. Vulnerable links can then be identified, for example if a company sources an important product from a single supplier, could they partner with backup vendors? This will help you minimize disruptions and prepare for unforeseen events.
Companies with strong supplier-collaboration ties often demonstrate higher growth, lower operating costs, and greater profitability than their peers. Improving collaboration with suppliers can reduce lead times, streamline procurement processes, and create more accurate supply forecasts. Don’t wait for disruptions to hit! Businesses must be sure to establish communication channels for each supplier and define roles and responsibilities in advance.
Data is another important element in a supply chain and data silos occur when teams store internal data in disparate systems. When supply chain managers don’t have access to the same data, it can lead to mistakes like double ordering. By collecting and storing data in a single location, businesses can create a “single source of truth” and ensure that teams are always working with the latest data. Most importantly, it can help to eliminate data silos in a supply chain.
One technology that companies are using to increase supply chain visibility is telematics devices and sensors that gather and exchange data over the internet. Technology in the market, such as Tracker’s Supply Chain Visibility solution is enabled by a portfolio of wireless sensors and other reusable and single-use devices that can be affixed to assets to track and collect critical data, such as temperature, light, shock, vibration and location. This enables operators to monitor cargo throughout the shipment journey from a manufacturer through land, sea and air touchpoints to the final destination.
Manufacturers, logistics operators, consumers and regulators all want to ensure their shipments in transit adhere to strict safety and compliance requirements and will arrive quickly and as expected.
High supply chain visibility enables companies to make better business decisions, exceed customer expectations, and gain a competitive advantage- they just need the right tools to get a unified view of everything happening in their supply chain first.