Supply Chain Visibility
Over the last decade or two supply chains have become increasingly complex. As large portion of manufacturing has moved from high-cost developed countries in the Western hemisphere to low-cost developing countries in the East, global trade has increased and so has the complexity of supply chains. Managing an increasingly complex supply chain requires availability of accurate and timely data to supply chain managers. Chain Visibility is a concept that attempts to achieve that.
Supply Chain Visibility is the capability to have (near) real-time information on the status of supply, demand, inventory, and capacity information across the entire supply chain. Supply Chain Visibility would involve:
* Having real-time visibility into status and location of goods in transit
* Having an accurate and close to real-time data about the demand from all the channels and customers
* Having an accurate information about future deliveries from suppliers
* Knowing accurately how much inventory is in the supply chain, and where exactly it is located
* Having a measure of current and future capacity utilization at manufacturing plants
* Having a visibility into the production status at outsourcers
Although end-to-end visibility of supply chain remains a utopian ideal, it is not always possible to achieve it in practicality. Hence a company needs to prioritize the areas where improving visibility lead to maximum return for the buck. For instance, a Consumer Packaged Goods (CPG) manufacturer might find maximum benefit in getting accurate information about real-time demand from retailers based on Point-of-Sale (POS) data. A component manufacturer might want to get real-time data about status of jobs that it has outsourced to sub-contract manufacturers. A retailer might benefit most by having accurate real-time information of incoming supplies into its Distribution Centers and stores from logistics providers.
Supply Chain Visibility comprises of two distinct features:
* Collaboration of data between supply chain partners providing real-time and accurate information across the supply chain
* Providing real-time event based alerts to supply chain partners that would enable prompt reactions to events & exceptions
A recent study by IBM found that Supply Chain Visibility was rated as the biggest challenge by largest number (70%) of Supply Chain executives across the globe. The study also found different programs being implemented by organizations for improving supply chain visibility. Some of the most common supply chain programs were:
- VMI implementations
- Collaborative planning with suppliers
- Collaborative Planning, Forecasting and Replenishment
- Continuous replenishment of material for customers
- Real-time sharing of inventory and demand data between supply chain partners
I would love to hear from the readers about their experiences while working on Supply Chain Visibility deployments.
