Globalization, competition and growing complexities in the marketplace have made it more difficult for companies to get a handle on their ever-expanding supplier networks. Clear visibility to your entire supply chain is challenging but also more critical today than ever before.
Do you feel there are gaping holes in your supply chain or between your execution systems? Supply chain visibility could help alleviate some of your pains and drive bottom line benefits.
In order to keep up and provide excellent purchasing/shipping/delivery experience that all customers expect, you need information. And not information from yesterday, last week or last month. You need current real-time information in order to ensure your e-commerce, logistics and supply chain operations are operating at peak efficiency.
In today’s marketplace, the difference between ensuring a customer will return and losing revenue to a competitor can come down to how much visibility a brand has. With real-time visibility, a company can instantly identify places where there’s too much or too little inventory, for example. Put simply, real-time visibility helps companies understand their business and better serve their customers.
Better Manage Product Demand
Better information means brands can be quickly alerted to delays, slowdowns or changing trends and make the necessary changes before it’s too late and their bottom line is affected. On the positive side, if a product is doing well, additional orders can be added to make sure you can take full advantage of a surge in popularity and aren’t shipping product out after the fact.
Tracking inbound and outbound inventory in real-time enables you to follow where and when inventory will arrive and helps you prepare for potential delays. Having a close connection to inventory assures you’ll never be low on stock or unable to fulfill orders.
Real-time information makes it easy to identify, prevent and fix inefficient processes as they’re happening, rather than months after the fact. Time is money.
Get a Handle on Shipping
Current information lets you know actual delivery times and dates, giving you the information you’d need to reroute (if need be) to avoid potential man-made or natural disasters and ensure on-time delivery.
Provide Excellent Last Mile Experiences
Real-time information lets your customer service know instantly if a product will arrive later than expected. This lets them proactively reach out to customers – instead of waiting for an unhappy call or email. No one wants to lose a customer because of a shipping delay that was out of the company’s control. Conversely, you can also let customers know that products will arrive early, or as planned.
Supply Chains are Bigger and more Complex
Today, manufacturing companies may conduct as much as 80% of their supplier network activity outside of their four walls. Many of these companies operate on a global scale, using various shipping modes to serve customers worldwide. A recent study by Cranfield University for Logistics and Supply Chain Management identified 52 pieces of data that need to flow across a supply chain. A traditional ERP or Supply Chain Management (SCM) system is not up to the task of managing so much information.
Your company may not have to deal with global supply and demand. However, chances are good that your supply chain is becoming more extensive and complex. Communication and the ability to make quick, informed decisions can be a challenge. Your best solution to gaining visibility may be to invest in cloud technology capable of managing big data, or to work with a logistics company that specializes in transportation management.
Customers Want Better, Faster Service
An expanding, increasingly competitive marketplace means customers have more options today than in the past. Many of them face their own competitive pressures. If they do not already, your customers are going to expect shorter cycle times and will be less tolerant of late deliveries or mistakes. In a recent study by consulting firm Deloitte, 40% of company executives interviewed said “sudden demand changes” from their customers cause the greatest expense and disruption to their supply chains.
To meet these demands, you need a transparent, more efficient supply chain and a better flow of information. A system that provides a single view of the supply chain will help develop more consistency in identifying SKUs, measuring units and enforcing timelines. Without this kind of visibility, different points of your supplier network become silos. Communication breaks down, orders go unfilled and impatient customers begin exploring other options.
There are More Regulatory Demands
Supply chain visibility tools may seem expensive, but they can be a wise investment. One reason: visibility helps you track the constantly changing landscape of government regulations and compliance. Regardless of the industry you are in, chances are that the amount of government oversight has increased in recent years. If you also export your products, you are familiar with the complexity of trade agreements and government tariffs.
Your transportation is also becoming more regulated. Bodies like the Federal Motor Carrier Safety Administration and the Environmental Protection Agency are imposing more rules on trucking companies, leading to fewer carriers and higher rates. In addition to technology that provides full visibility to your supply chain, you need experts who can anticipate and respond to new regulations in your industry and in transportation. Combined, these tools will help your company operate more efficiently and gain an edge on your competitors.
You Need to Cut Costs and Reduce Risk
Supply chain visibility gives you a better handle on your materials, inventory and transportation. It also may allow you to eliminate middlemen and spot inefficiencies in your network. Most companies that use transportation management software (TMS), along with qualified specialists, see a reduction in their transportation spending. According to a recent survey by Supply Chain Insights LLC, 70% of companies that acquired supply chain visibility solutions saw a return on that investment within 13 months.
By making informed decisions about eliminating bottlenecks and inefficiencies, you are also reducing the risks that something will go wrong. In fact, enhanced clarity in your supply chain should lead to fewer mistakes, missed deadlines and damaged deliveries.
Forecasting is Crucial to Your Business
With visibility comes knowledge. But knowledge alone does not create action. Information-sharing, analysis, collaboration and decision-making are vital to getting the most from supply chain visibility. You need a team that can dissect information, communicate with suppliers and business partners, and model different outcomes. This analytical approach to data will not only improve your supply chain performance today, it will help you anticipate the future.
As you build up more information and continue to improve the supply chain, your demand forecasting and business planning will improve as well. You can save money by reducing inventory when demand is expected to be low, improve your on-time deliveries and respond more quickly to potential issues.
Supply Chain Visibility = Business Intelligence
Supply chain visibility enables you to perform “what-if” scenarios. Visualizing these different scenarios can help you predict issues and problems that may arise, and then plan for them and their solutions. That way you can have systems and processes in place that are ready to solve problems as they arise.
One simple “what if” could be about how your business silos interact. If you have different aspects of your business in silos, and they don’t have the proper communication between them, you are potentially wasting time and money—probably creating questions like, “Are we cutting orders because we don’t have the right hands working together?” Or, “Are shippers and suppliers normally integrated or parceled?”
This is just one example of the worst case scenario you could have: your systems aren’t integrated, and people are making decisions on the information they have available. You could be underutilizing your fleet, or paying a broker an incorrect amount. Your warehouse could be over (or under) staffed which impacts profitability or performance. The list goes on and on when it comes to potential issues caused by lack of system integration. If systems are not integrated and sharing data, you’ll never gather the business intelligence you need to fix problems, get more efficient and increase profit along the chain.