The modern supply chain, one that is thriving, is one that has learned how to create visibility at every stage in the chain. Modern supply chains need to have clear insights in to all of the data pertaining to their chain, in real-time, in order to make the most appropriate decisions. There isn’t really room for error any more – visibility in the supply chain is paramount.
This requires a vastly different approach from the old forms of supply chain management. How do we create more visibility in the supply chain in order to make it more efficient?
What is Supply Chain Visibility?
It’s a term being bandied about quite readily, and in many ways is the current buzz word of the industry, but – in short – visibility is simply knowing where anything is, and perhaps in what state, at any point in time. This data gives rise to useful information which can be acted on. It is important throughout the supply chain in multiple locations. However, some areas stand to benefit more than others.
Modern Supply Chains and Technology
The single biggest driver of change in the supply chain is technology. We know that the key to efficiency improvements, and cost reductions, at every stage in each supply chain, comes down to increasing visibility, and the single way to do that is through utilising the right technology.
Supply chains can no longer be slow to respond to changes trickling in from external sources, or due to changes in supply and demand, or any other manner of factors. Instead, they need to be able to turn on a pinhead and respond dynamically, and speedily, instantly. This is achievable through the connectivity given to us by technology. This isn’t optional – customers expect this, and supply chains must deliver.
However, it shouldn’t leave us quaking in our boots. When looked at realistically, technology is a tool which is in fact creating increased opportunity within the supply chain industry. It may bring with it the weight of competition, and tighter margins, but it also brings with it a means of improving cost effectiveness and increasing efficiency.
The Pressure on Logistics
The biggest impact of technology is, perhaps, on logistics. It is this area which is becoming a pinch point due to the supply chain’s ability to meet supply. However, it is also this area which really stands to become more efficient with increased visibility. Customers are increasing their expectation for enhanced delivery experiences in minimal time windows. The automation is already working as hard and as fast as it can. What could reap more improvements would be increased visibility in order to refine and correct systems.
The problems aren’t how goods are getting from dispatch to the customer, or how fast they are doing so. The problem is more complex.
In the UK last year there was a 15.7% increase in the amount of online retail parcels, a record 1.065 billion parcels dispatched in the UK. This is expected to reach 2.3 billion in just 6 years according to SHD. However, the problem is coming in the number of these parcels which are lost, stolen, or damaged. This is where increased visibility can help to transform the efficiency of the supply chain.
Getting More from Logistics
If we are to expect more from logistics, we need to provide them with a way of making it happen. We only need to consider the Yodel Christmas 2014 issues to realise that visibility on a unit-level would be invaluable across the logistics sector.
Smart technology makes this possible with the ability to track and monitor every step of the way. If we have accurate data on what is happening on a micro level in logistics, then the right decisions can be made to increase efficiency. If that data is delivered in real-time, without fail, then it becomes increasingly powerful. For those that can create this visibility, they can create a strategic competitive advantage.
For example, if you are able to track and monitor parts before they are in the location they are needed in, you can identify and rectify problems before they have had a chance to cascade on multiple other elements of the supply chain.
How is Visibility Possible?
The primary answer is technology, and specifically utilisation of smart technology through the internet of things. Using sensors, tracking, and automation together you can access valuable real-time data. This near-instant flow of information about location and state of goods makes for a high level of visibility, and, used appropriately, a tool for increased efficiency. Even when real-time information is fallible, or not possible, it is still possible to utilise smart technology to get the data needed in enough time to create visibility and improve efficiency.
This is much more than what we have come to know and expect in terms of logistics tracking, which has typically only given us insight in to which vehicles or shipments are where, and at what point, and information about how they are travelling. Instead, it is a method of accessing the right data, in exactly the right time window, to analyse it and make relevant changes.
However, it isn’t down to technology alone. Technology is the tool that makes visibility possible, but it needs to be matched with other elements too. The most important of these is communication and collaboration. The information needs to get to the right place in the right time and be shared appropriately. Each player in the supply chain needs the information relevant to them, and the capacity to act on it. This requires a high level of trust between the different players in the supply chain, but which will benefit you all overall.
When this is all combined with strategic management approaches to the supply chain, visibility becomes the driving force for success. Decisions are based on accurate information, and as such result in accurate and more efficient output. It’s a different way of looking at, and solving, the problems that come at the pinch points of the supply chain, most notably logistics.
If you need support on any aspect of your supply chain or logistics operations please contact our supply chain consultancy today.