A recent supply chain leadership survey indicated that only 8% of companies had full transparency of their entire supply chain. If these stats were worrying, what was shocking was that over 64% of companies had either “limited” visibility or none.
But why is this an issue?
In layman terms, these may just seem like another set of numbers with some consulting speak. But to think that two in three supply chain leaders do not have much visibility beyond their tier 1 suppliers is quite worrying. In today’s increasingly unpredictable environments, where provenance, transparency, compliance and risk management are important like never before, limited visibility can lead to serious implications for any supply chain.
And then there is that six letter B-word, which is set to redefine our relationships not only with Europe but with the global marketplace. In the short term, a firm’s bottom line and in some cases, even the survival, can ride upon having good visibility of the product and information flow.
Visibility = Competitive Advantage
In this “now” economy, consumers demand real-time visibility, along with the near-immediate delivery of goods and a need for flexibility. However, looming cost pressures are pushing firms to identify innovative ways to work with their customers and suppliers, with a view of taking costs out of the entire chain and not just their own operations. Not only do the two objectives contradict each other to a large extent. They also expose the supply chain to “abuse”, transferring the eventual cost to “the least loud” link in the chain; leading to a systemic failure.
Visibility across the chain, (and sharing the same with all partners), can help the availability of accurate and actionable data while offering full traceability and provenance. This also helps companies to simulate volumes, specifications and lead times to build further flexibility in their supply chains. Moreover, it also allows for more collaborative working with all partners in the chain, creating a “win-win” for all.
Like most supply chain transformation programmes, visibility improvement is more of a process and culture transformation than just a systems implementation project. We at 4C Associates employ a 7-step model to help clients improve their supply chain visibility:
1. Strategise and define what visibility means to your end-users and customers, what experience you want them to have, and what do you want to gain from increased visibility.
2. Connect across your key supply chain players. It might be a good idea to start small by connecting two tiers up and two tiers down. Once the platform and processes are in play, we can work on extending to further tiers.
3. Standardise processes and data, and build in “data check points” to ensure consistent data models in line with your visibility strategy.
4. Trust the data collected from your partners but do question any anomalies. Build models to meaningfully interpret and leverage information to identify opportunities for improvement.
5. Create teams and drive decision-making through analytics, simulation and collaboration. Initiatives identified in step 4 above would most likely be cross-functional and cross-organisational and will require sponsorship and collaboration across the supply chain.
6. Build capability within the firm. Though it may seem essential to bring in outside help in the first instance, it is always a good idea to develop a part of capability inhouse, not only from a cost perspective but also to make this change a sustainable one.
7. Institutionalise the extended eco system by designing the right mix of processes, organisation and systems. This will help build an extended ecosystem that brings the best of all your partners’ capabilities into a single environment.
In today’s constantly changing business environment, visibility improvement is more of a continuous journey than just another short-term project. Not only does it lead to better coordination of all processes. It also helps improve management for potential disruptions and drive efficiencies across the chain. Where having a visibility strategy is clearly a win for any company, not having one will definitely have adverse implications for the entire supply chain. So when are you investing in your supply chain visibility strategy?