Ignorance is not bliss! Being unaware of parts, components, and products in transit within a supply chain can be devastating. Organizations should use supply chain visibility to improve and strengthen the supply chain by making the necessary data available to all stakeholders and customers. Supply chain visibility also promotes quick response to sudden changes by allowing the privileged users to take corrective actions and reshape demand or redirect supply. Providing an accurate and real-time picture of supplier inventory levels and demand signals, helps the company to meet compliance goals. Although the need for supply chain visibility has been established, few companies still struggle to properly implement it.
The biggest challenge for supply chain executives revolves around getting information together in the right format and place, contact us to know more about the supply chain challenges facing businesses in today’s complex business scenario.
Here are some supply chain visibility tips to help you optimize your supply chain:
Reduce Stocking Point
Having multiple stocking points within the distribution channel can diminish supply chain visibility. What happens is instead of having a look at one figure for one SKU, companies with multiple stocking points suffer from multiple data of the same SKU. A quick fix to tackle such a problem would be to reduce stocking points and avoid information overload.
Outsourcing and global sourcing is a common modern business practice. However, as the number of members in the supply chain increase, so does the time taken for information to flow from one end to the other. As a result, it hampers supply chain visibility. Companies can use intermediaries such as trading companies, 4PL providers, and international procurement office to shorten the pipeline. Supplier rationalization can help in reducing the supply base and contribute towards increasing visibility.
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Find the Bottlenecks
Why is it not possible to see anything and everything that is happening in the supply chain? It is because bottlenecks exist in the certain process, which can result in quality issues or high downtime. Finding the bottlenecks in the production facilities can save you time and resources.
A bullwhip effect is the most challenging phenomena to deal with in a supply chain. Small changes in the inception of a supply chain can create huge gaps at the end. Order batching or excessive promotions at the end of the quarter can create a ‘peak and valley’ demand pattern that is arduous for supply chain managers to handle. In such a case, using annual contracts or blanket orders will help manage demand with much flexibility.
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Avoid Safety Lead Times
In a classic material planning setting, safety lead times are often used to compensate variability in lead-time. For every step of the order cycle, extra lead time is added. For instance, for safety purpose, companies usually add 2-3 days of possible delay time in customs clearance. It creates conflicts in the lead-time information system and supply chain managers cannot claim an accurate lead time with certainty.
Apart from these tips, companies should invest in the multi-skilled workforce and empower employees to make decisions by simplifying rules and business processes. Investing in agility can greatly contribute to supply chain visibility.