Every organization belongs to a network of companies, people, activities, and information that all help to transform some set of raw materials into a finished product. This network is known as the supply chain.

All supply chains consist of numerous entities, such as suppliers, manufacturers, vendors, contractors, distributors, and customers. Some also include procurement agencies, retailers, and outsourcing firms.

If your organization’s supply chain is efficient, its various moving parts can keep costs low, prevent wastage, satisfy customer expectations, and allow every entity to meet its operational and financial goals. But this is possible only if you can see into and understand your supply chain. That’s why supply chain visibility (SCV) is crucial.

A lack of visibility inevitably leads to poor supply chain planning and inaccurate predictions. It increases risks, affects the decision-making of supply chain leaders, and makes companies more vulnerable to supply chain disruptions. These issues may lead to a loss of customer trust, damage your reputation, and result in financial losses.

How can your organization get more visibility into its entire supply chain? What is the role of data in improving SCV? This article unpacks the answers to those crucial questions.

What Is Supply Chain Visibility?

As your supply chain expands, you may find it harder to control and optimize your operations. Fortunately, it is not impossible – if there is transparency throughout the end-to-end process. This is where SCV comes into play.

SCV is about knowing what’s going on in any part of your global supply chain at any given time with accurate, real-time data. It refers to your ability to track each raw material, component, and final product as they travel from the first point in the supply chain to the last.

SCV, which applies both to internal business operations and the operations of external partners, will help you:

  • Track raw materials and components from suppliers to manufacturers;
  • See how finished goods move from a manufacturing unit to the logistics company to customers;
  • Track each unit of each product throughout its lifecycle all the way to delivery;
  • Generate real-time information about inventory levels, shipping details, order status, delivery dates, and compliance directives;
  • Identify supply chain bottlenecks.

The Benefits of Supply Chain Visibility

In a high-visibility supply chain, stakeholders can quickly determine the status of all elements within it. They can also get more details because these elements (really, data about all items moving through the chain) are well-integrated, and each link in the chain can “talk” to the others.

A problem in the chain will be immediately flagged so the concerned party can find a solution before the snag can cause further problems in subsequent (downstream) supply chain operations.

Let’s take a look at some of the other ways real-time SCV can benefit your organization.

Reduce complexity

Modern supply chains are vast, complex, and highly dynamic. Many companies work with suppliers in one country and deliver their final products in another. New suppliers, market expansion, acquisitions, and expanded product lists are all common sources of complexity.

For your organization to adjust to these forces, you must know what’s happening across the extended supply chain network at any time. These insights will help you make better decisions to reduce complexity and build a well-functioning and profitable supply chain.

Improve planning and business processes

Visibility improves forecasting, planning, and business processes at every stage of the supply chain. It helps manufacturers to plan their production operations, improve raw material sourcing, and get deeper insights into production volumes and inefficiencies.

Similarly, it helps suppliers to track order backlogs and strategize their inventory management processes. SCV also allows logistics vendors to improve day-to-day operations and track the movement of goods.

Deliver greater customer satisfaction

Today’s customers have higher expectations around lead times, on-time delivery, product customization, and tailored customer service. Transparent operations allow executives to understand what customers want. Organizations can better adapt to customer demands and deliver meaningful experiences to each customer. Ultimately, SCV is the key to meeting customer expectations and improving customer satisfaction, retention, and acquisition.

Meet compliance goals

Businesses in every country are subject to regulatory requirements and government rules. Many are also expected to adhere to certain standards of business ethics and rules around sustainability, diversity, and good governance. SCV is vital to monitor and manage these factors and to implement the controls required to maintain ongoing compliance.

Reduce costs and strengthen the bottom line

SCV at every stage of the supply chain will enable your enterprise to execute its plans more efficiently. You can quickly identify and resolve issues to reduce waste, cut costs, and increase revenues and profits.

Further, SCV will help you monitor the supply chain in real-time with relevant key performance indicators (KPIs). These metrics can help you detect problems early to minimize risk, avoid any impact on profit margins, and boost your competitive advantage.

Overcome disruptions and create a resilient supply chain

According to one research study, nearly 40 percent of small businesses in the United States experienced supply chain delays due to the COVID-19 pandemic. Companies that have real-time SCV are better prepared for such disruptive events, and are better able to withstand their damaging effects. Further, the ability to better manage disruptions is a sign of a resilient organization that is well-prepared to deal with similar or new challenges that may arise in the future.

That study, however, also found that only 6 percent of companies actually have visibility into their supply chain; a whopping 69 percent do not have total SCV. These companies are more likely to experience the damaging effects of supply chain disruptions, which can cause a hit to their finances.

Meet sustainability goals

Today’s customers, investors, board members, governments, and regulators expect companies to put sustainability at the core of their operations by reducing their carbon footprint, minimizing waste, and building circular processes.

SCV can show where your organization and supply chain lags in these areas. You can then use these insights to address the gaps and meet the sustainability expectations of all your stakeholders.

Critical Data Points for Supply Chain Visibility

Here are some data points that can increase SCV and help you gain more useful insights from your supply chain:

Product serial numbers and batch numbers

A unique serial number or identification code can help you track individual products and components, while a batch or lot number supports product tracking at batch level.

Order status

Real-time visibility into order status will show where each product is in the supply chain and when distributors are expected to complete the delivery of goods to customers or end users.

Further, shipping details and information about quotes, order receipts, bills of lading, and proof of delivery can increase transparency and accountability at every stage and also help to streamline upstream and downstream supply chain processes.

Cargo location

Visibility into cargo location and status is necessary to schedule material repurchase and product delivery. Cargo location data can also help you track payments and the status of materials, inventory, and finished goods.

Transportation rates

Information about transportation costs will help you track spends on shipping and freight delivery, conduct cost-benefit analyses, and determine if you are still making a profit.

Auditing records

Compliance and regulatory information is critical for ensuring that business processes are conducted lawfully throughout the supply chain. Additionally, documented information about past transactions will also help you inspect and review past completed orders.

Best Practices to Achieve and Maintain Supply Chain Visibility

Here are some ways to increase and maintain SCV:

Define your SCV goals

The first step towards improved SCV is to define your goals and clarify the benefits you hope to achieve with SCV. Make sure these goals are realistic, and consider the supply chain size and complexity, as well as your organization’s IT capabilities.

Replace manual processes with technology

Invest in appropriate supply chain management (SCM) software to automate manual processes, remove data silos, and integrate the various parts of your supply chain. Ideally, look for applications that can help create a highly efficient digital supply chain with capabilities for:

  • Customer demand tracking
  • Inventory management
  • Warehouse and fleet management
  • Supplier relationship management
  • Order and shipping management

AI-powered SCM platforms and supply chain modeling software can provide end-to-end supply chain visibility. They can consolidate data from various parts of the supply chain, convert it into actionable insights, create useful reports for stakeholders, and augment planning and forecasting processes with predictions and suggested action plans.

Create a unified data model

A unified data model is vital for real-time visibility and to support automation, predictive analytics, and end-to-end control. Check if you need electronic data interchange (EDI) processes to allow corporate systems to convert suppliers’ data into a format that’s readable by your SCM and ERP systems.

Leverage IoT technology

IoT technology is a great way to track both raw materials from suppliers and finished goods to distributors/customers. Connected IoT and RFID sensors and low-frequency tracking networks can track and monitor the location and status of each shipment. They can also monitor other important parameters such as shock loads, moisture, and temperature to assure the cargo’s safety and integrity.

If possible, also consider other supply chain visibility software and digital technologies like robotic process automation (RPA) and machine learning (ML) to automate manual processes, transform supply chain data into intelligent insights, and increase the value generated by the supply chain.

Enhance Supply Chain Visibility and Management with the Reciprocity ROAR Platform

Get better visibility into your supply chain with the ROAR platform from Reciprocity – the supply chain and risk management experts.

ROAR will enable you to see the IT and cyber risks affecting your supply chain. Its unified, real-time view of risk is framed around business priorities to give you the contextual insights required to understand risk and make smart decisions to protect your enterprise.

Leverage ROAR’s world-class capabilities to break down the silos that cause inefficiencies in your supply chain. You can also automate your workflows, streamline collaboration, and make better, data-driven decisions that benefit all stakeholders.

You can even integrate ROAR with your most critical systems to improve supply chain efficiency, eliminate errors and delays, and minimize audit fatigue. Schedule a demo to know more about ROAR.