Five Undeniable Reasons Why You Need to Take Supply Chain Visibility Seriously

Aug 30, 2018

Spend Analytics

What is Supply Chain Visibility?

Supply chain visibility refers to the ability of businesses to track their goods and products that are in-transit from the manufacturing stage to the final destination and gives a comprehensive view of the inventory levels. One of the key goals of supply chain visibility is to improve and strengthen the supply chain by ensuring that the data is readily available to all stakeholders, including customers. As more companies are outsourcing their supply chain, they tend to lose control and visibility in the supply chain.

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Visibility in Supply Chain Operations: Why is it Important?

Rising competition, globalization, and growing complexities in the marketplace are the major roadblocks for companies in effectively managing their ever-expanding supplier networks.  Clear visibility in the supply chain is challenging but also more vital to businesses today than ever before. Here’s why:

Bigger and Complex Supply Chains

Most companies today operate on a global scale, as a result, their supply chain is much more complex and bigger, making them extremely difficult to manage. Consequently, if companies do not have good supply chain visibility, it can hamper their ability to communicate effectively and make quick, informed decisions. In such situations, companies must invest in a cloud technology that is capable of managing big data or work with a logistics company that specializes in transportation management.

Reduce Risks and Costs

Supply chain visibility minimizes interruptions in the company’s processes. Having visibility in the supply chain enables companies to respond quickly to any needs throughout their supply chain. It also enables them to re-evaluate areas of inefficiency and, in turn, reduce risks such as damaged products and mistakes. Businesses can gain a good return on investment by spending on supply chain visibility and identifying a reliable and cost-effective service plan.

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Managing Demand and Supply

Customer demands and requirements are highly dynamic. Unless companies keep constant tabs on these changing trends of demand, they might run into over-stocking or understocking situations. By gaining clear visibility in the supply chain, companies can correctly examine the flow of goods and determine the demand, eliminating stock-outs or stock overflow situations. Identifying areas that have excess products can also help to orchestrate demand by running promotions or sales to recover the right balance.

Managing Supply Chain Disruptions

Disruptions in the supply chain can often occur due to unplanned occurrences such as natural disasters, political turmoil, or labor strikes. Furthermore, factors such as quality issues, damages, and late goods can also result in disruptions. Having real-time visibility into the entire supply chain facilitates companies with quicker decision-making ability regarding changes in schedules or working with alternate suppliers. This ensures that the supply is stable. This can also be used to notify customers regarding delays so that the company does not have to deal with unhappy customers due to delays in delivery.

Optimize Processes

Visibility in the supply chain facilitates businesses to optimize their processes. The result? Higher inventory, longer lead times, and reduction in overall costs. Supply chain visibility enables us to work with the full supplier base in order to optimize the processes. It also helps to improve communication and simplify the processes in the supply chain.

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