What is Supply Chain Visibility and why is it so important?
The most crucial goal of supply chain visibility is to ensure, strengthen and progress the supply chain. The way this is achieved is through making information available to stake holders constantly.
Just like the name suggests, supply chain visibility is about being able to see and know where all the inventory is at any particular moment. Additionally, it’s intended to help tell how well parts, products and components that are in transit can be traced all the way up until they reach their final destination from their manufacturer. What this kind of visibility achieves is creating a smoother, more strengthened supply chain, that allows for real-time responses to errors in the supply chain line, or changes in the SCM.
Consider the rising competition in the market, globalization and the continually growing complexities that have made keeping track of their networks of suppliers, transports, and teams that span the world in many cases.
Some key reasons why supply chain visibility is so important is the rising complexity of SCM, meeting customer demand, and the ability to comply with regulatory demands.
- In the 21st century, many big and successful organizations function on a much more globalized scale with countless modes of logistics and shipping methods to meet the needs of their customers. Supply chain visibility allows for the supply to have the invaluable ability to track this ever-complex supplier network. Even on a national or community scale, the supply chain is still likely to have changed, expanded and grown more complex over time in the modern era. Keeping communication open and allowing for transparency in the supply chain allows for much more informed and fast-paced decisions to be made in real-time.
- With more competitors in the market, customers have many more choices than ever before. This allows for them to demand more and expect more from the company they chose to purchase from. Additionally, they are much less tolerant of mistakes and late deliveries. This means there is no choice but to rise to this demand, keep transportation transparent, and create a much more efficient and effective supply chain. The better the data flows, and the more you can communicate with every part of the supply chain, the more equipped you are to communicate with your customers.
- Finally, staying in compliance with regulations in the ever-expanding market place is made much easier with supply chain visibility. Trade agreements and government tariffs are complicated and hard to get right but made much easier with supply chain visibility tools. Moreover, it allows for a more straightforward prediction of changing regulations in the industry, and quicker responses to these changing landscapes of regulations.
The importance of supply chain visibility tools cannot be understated. In the growing landscape of complicated supply chains, growing customer demand, and everything else, this new world has to offer in terms of complexity. Transparency allows for quicker response, better communication, and countless other benefits that can help you handle the new complexities in the marketplace.
By contrast, what happens when you have low supply chain visibility? Through not having any insight into the activities and movements of your manufacturing partner, you might find yourself in a situation where you don’t learn of a late delivery until the last possible moment you can. This would mean that you find yourself stuck with the desperate scrambling that comes when you need to accommodate for the late supply, and potentially ending up with a customer who is annoyed about the wait with no good explanation for them. Supply chain visibility, however, eliminates the scrambling to catch back up, and allows you to be immediately prepared and notified for any disruption in the chain.