Supply Chain Visibility: Meaning, Issues, Metrics, Examples & How to Improve it

Supply chain visibility is a concept that can be game-changing for businesses and keeps them one step ahead of their competitors. It involves collecting real-time data and allowing businesses to track goods at every step of the supply chain. 

In this blog, we discuss what is supply chain visibility and how businesses can benefit by applying it. We will also explore the challenges companies face, the supply chain visibility metrics and ideas for improvement.

What is Supply Chain Visibility?

Supply chain visibility gives businesses the ability to track their products and components in real-time, throughout the supply chain, by collecting and sharing data. To put it simply, supply chain visibility aims to monitor the movement of goods across the entire supply chain from the supplier to the manufacturer to the consumer.

When the companies have the right data about the supply chain at the right time, it ensures that:

• The management makes informed decisions
• Disruptions are managed proactively
• Operations are optimised
• The process becomes time-efficient

Supply chains have grown bigger and become complex over time. More and more countries are dependent on global suppliers who dominate world trade. Hence the need and demand for real-time supply chain visibility is rising.

Importance of Visibility in Supply Chain

A series of events in the recent past have made businesses more aware of the need for supply chain visibility. With various challenges faced in global supply chains like keeping up with new technologies and industry regulations, volatile markets, disruptions due to the COVID-19 pandemic, the war crisis, etc., the importance of supply chain visibility is only growing. Here are some points highlighting its importance that enable enterprises to-

• Pre-empt the risks: When goods are visible at all supply chain stages, it’s easier to analyse the situation and proactively identify risks such as delayed production or shipments, or supplier issues.
• Take instant corrective measures: Once the potential supply chain disruptions are identified, a business can take corrective measures instantly. It can save a lot of time and resources.
• Maintain optimum inventory levels: With supply chain visibility, enterprises can monitor inventory levels in real time. Gone are the days of stockouts or overstocking. This reduces the storage costs of inventory and optimises cash flows.
• Comply with regulatory standards: Complying with the highest standards for products and services is extremely important. Some industries are highly regulated and several legal requirements are to be met. Close monitoring of products in the supply chain helps in achieving the best quality goods that meet all regulatory standards.
• Improve customer satisfaction: Quality products and timely supply are key to ensuring customers are satisfied with the services provided.

Need for Supply Chain Visibility

Now you may ask what is the need for supply chain visibility? How did companies operate before? Here is why companies need visibility of their supply chains:

• Globalisation: Global supply chains are spread across various countries. This dependency on goods produced and transported over long distances needs proper monitoring which supply chain visibility enables.
• Customer expectations: With e-commerce on the rise, customers have increased expectations. They are looking for convenient online stores that offer fast deliveries, quality control, real-time tracking, easy returns etc.
• Complex supply chains: Multi-tier producers, suppliers and customers located at various geographical locations pose a serious problem. Supply chain visibility is vital to manage the process flow.
• Complicated geopolitics: The recent developments in geopolitics especially after the COVID-19 pandemic have led to various developments. Countries are looking to diversify their supply chains and real-time visibility is necessary to make it happen.
• Saturated supply chains: Currently, some countries have a monopoly on the global supply chains. They can use their privileged position to pressurise countries that are dependent on them. The increased convenience courtesy of supply chain visibility can help add new players who can expand and democratise the supply chains.
• Regulatory Requirements: Producers and transporters have to comply with various health and safety standards. To ensure blanket compliance, enterprises need to proactively identify issues as they arise, and take corrective measures in advance.

Types of Supply Chain Visibility

When it comes to visibility or tracking, you might misinterpret it as only logistics. There are many types of supply chain visibility depending on the elements of the supply chain they represent.

How Supply Chain Visibility Works

Using technology and data integration, businesses can track and monitor the movement of goods throughout the supply chain. This is called supply chain visibility and it is a game-changer for businesses. But, how does it work? Let’s see in the 4-step process given below:

Step 1: Data Collection

Multiple IoT devices like GPS monitors, sensors, RFID tags, CRM systems, etc. can be used as an integrated setup for recording real-time data on various supply chain elements.

Step 2: Data Integration

Once the data is gathered from various sources like suppliers, transporters, production, finance, etc, it is integrated to give a comprehensive view of the entire supply chain.

Step 3: Data Analysis

The collected and integrated data is run through sophisticated and advanced AI tools and data analytics that help in analysing the data. This process helps in:

• Identifying the trends
• Predicting risks in advance
• Suggesting improvements
• Taking corrective measures to avoid problems

Step 4: Real-time Monitoring

Supply chain visibility is all about monitoring the entire process in real time. Businesses can achieve this by using dashboards that help visualise the data. As a result, they can make decisions proactively and avoid disruptions.

Supply Chain Visibility Metrics

How do you know whether your supply chain visibility is effective? Enterprises can use some of the following metrics and check if their business is on the right track:

Supply Chain Visibility Issues

A supply chain involves a diverse set of players, probably also in distant geographies. Common supply chain visibility challenges include:

• Data silos: Due to geographical challenges, information is stored across different systems and platforms. It poses a challenge to get a unified view of this data.
• Lack of standardisation: Different partners that form a part of the supply chain may use different software's and systems. As a result, the formats for reporting the data or generating invoices and other documents can be very different. Without a standard format, it is complicated to integrate the data.
• Outdated technology: Legacy systems are not compatible with new-age technology like IoT or AI. It can lead to loss of visibility and make real-time data processing a challenge. The business might not be able to monitor the entire supply chain.
• High cost of implementation: Changing the entire technology including hardware and software results in exorbitant costs. Moreover, it can be expensive to integrate the systems and have a standard format to enable advanced visibility.
• Cybersecurity concerns: Securing the channels and systems integrated to share data between stakeholders is very important. Data breaches cause supply chain disruptions. It can derail the entire process.

How to Improve Supply Chain Visibility?

Businesses need to track their goods across all processes to become effective. One of the most popular concepts for tracking goods in real-time is to provide supply chain visibility. An enterprise can use the following strategies to implement it:

• Use advanced technologies: New and faster technologies have advanced to a level where real-time data collection and analysis is possible. IoT and AI-powered tools are some advanced technologies that can automate business processes. Once implemented, enterprises can benefit through proactive insights and decision-making support.
• Create a unified platform: Standardising data is always a good choice. Using integrated software that is compatible with all elements of the supply chain is vital. This software can gather and compile data from different sources and present a single view of the entire supply chain.
• Closely collaborate with partners: It is important to ensure synergy between all supply chain partners for the best supply chain visibility. Work closely with suppliers and logistics providers to keep data transparent and consistent.
• Train employees: Supply chain visibility cannot become a reality unless the staff is trained to operate sophisticated systems. Provide them with proper training and knowledge of the tools at their disposal.
• Install real-time monitoring systems: Use automated alerts from the systems to track goods across the supply chain. Enterprises can continuously monitor and identify disruptions quickly by installing these systems.

Examples of Supply Chain Visibility

When it comes to businesses in India, we have many supply chain visibility examples. Here are some well-known businesses that thrive on a robust supply chain:

• Amazon: The world’s largest e-commerce company needs no introduction. It has become an integral part of people’s lives. All this has been achieved through:
  • Efficient inventory management systems
  • Order tracking systems
  • Automated warehousing
  • 24/7 logistics support
  • Enhancing the customer’s experience
• Flipkart: The Indian counterpart of Amazon has tried to replicate its model locally in India and has become a household name. Its effective GPS tracking has made it a reliable e-commerce platform.
• Reliance Retail: Reliance operates the largest retail chain across India for which it uses integrated logistics solutions to seamlessly move goods from one location to another. This leads to minimum stockouts and boosted sales.

Benefits of Supply Chain Visibility

Here are some supply chain visibility benefits:

• Reduced cost of operations.
• Better inventory management.
• Prompt and efficient logistics tracking.
• Identifying disruptions beforehand to reduce losses.
• Proactive decision-making.
• Taking corrective measures swiftly to reduce risks.
• Enhanced customer satisfaction with accurate and real-time updates.
• Meeting the quality standards and regulatory requirements.

For businesses to thrive and grow, in modern times, supply chain visibility is a must. By adopting advanced technologies, you can make the right strategies to overcome your challenges and gain a competitive edge. After all, it's about enhancing the customer experience and satisfaction. Real-time monitoring is the way forward to ensure this!