Having clear visibility into all supply chain activities is crucial for organizations to swiftly identify risks, make data-driven decisions, and respond quickly to disruptions. As a supply chain data analytics expert with over a decade of experience extracting insights from complex datasets, I have seen firsthand the high costs companies face from inadequate visibility across their value chains.
The global events of 2020 revealed deep fragilities hidden within supply chains worldwide. Businesses experienced stockouts, increased costs, delivery delays, and dissatisfied customers as disruptions originating from remote tiers triggered ripple effects. This served as a wakeup call to invest in improving end-to-end supply chain visibility.
According to McKinsey, 93% of supply chain executives reported experiencing disruptions in 2021. Gartner predicts that by 2023, 50% of supply chain leaders will leverage advanced analytics for enhanced visibility, a huge increase from just 5% in 2020.
This article will explore the top 5 steps your organization should prioritize in 2024 to improve supply chain visibility and tackle current and future uncertainties in global markets. As we dive into each recommendation, I‘ll share relevant statistics, analysis, and real-world examples drawn from my decade of supply chain data experience.
Step 1: Conduct In-Depth Analysis of Current Supply Chain
The first step is analyzing your current supply chain to identify vulnerabilities and gaps limiting visibility. This will provide a clear picture of where your supply chain stands today and where improvements are needed most.
1.1 Connect with All Stakeholders
Schedule meetings with department heads, vendors, suppliers, logistics partners, retailers, and other stakeholders. Discuss pain points and collect insights into potential blindspots across the supply chain.
According to KPMG, 85% of disruptions originate from tier 2 and 3 suppliers, so engaging your entire ecosystem is key for enhancing end-to-end visibility.
For example, a computer manufacturer could meet with chip suppliers in Southeast Asia, freight forwarders in China, and retailer partners in the US to understand constraints and transparency issues.
1.2 Map Out Entire Supply Chain Process
Create a detailed end-to-end process flow map highlighting each function, step, and party involved in your supply chain. Use visualization tools like Lucidcharts, Draw.io, or Visio to illustrate the complex web of entities and dependencies.
This mapping exercise uncovers bottlenecks, inefficiencies, redundancies, and broken links in information flow. It provides a holistic overview of all the inputs required for your product/service delivery.
[Insert image of detailed, real-world supply chain process flow map]1.3 Leverage Data Analytics
Collect and analyze all available supply chain data using business intelligence, data visualization, and advanced analytics tools. Look for gaps in data that may be limiting visibility into certain supply chain segments.
Integrating and correlating data from internal ERP systems with supplier inventories, 3PL shipments, and weather patterns reveals a more complete picture. AI-powered solutions can help uncover overlooked insights and predict potential disruptions.
Step 2: Identify & Prioritize Pain Points
Next, delve deeper into the vulnerabilities and gaps uncovered during the analysis phase. Evaluate and quantify the risks posed by each issue to determine where improved visibility is most urgently needed.
Consider how these shortcomings impact your organization‘s strategic goals and KPIs. Then, prioritize addressing the pain points providing the biggest potential ROI first. For example, resolving chronic delays from a single supplier may provide an outsized benefit.
Be sure to clearly communicate insights from the analysis with stakeholders at all levels. Confirm alignment on priorities for enhancing visibility based on relevance to strategic objectives. Assign internal teams and budgets to execute on identified high-value initiatives.
Step 3: Dramatically Increase Supply Chain Collaboration
Strategic partnerships and collaboration with suppliers, vendors, 3PLs, retailers, and even competitors are vital for collecting the volumes of data needed to enable end-to-end visibility.
3.1 Cultivate Vertical Collaboration
Nurture relationships and long-term contracts with entities across vertical tiers of your supply chain. Trust built up over years can facilitate more transparent and proactive information sharing critical for visibility. Consider revenue sharing or other incentives to encourage upstream and downstream partners to provide visibility into constraints.
3.2 Explore Creative Horizontal Partnerships
Look for innovative opportunities to collaborate with companies across industries at your same supply chain level. For example, a collective purchasing organization can negotiate rates, coordinate shipments, and share warehouse assets for lower costs and greater visibility.
Even competitors may share select visibility into mutual suppliers to identify and mitigate common disruptions through joint contingency plans.
3.3 Align on Mutual Visibility Goals
Ensure all partners are fully aware of your visibility objectives and how collaboration can lead to shared value. Establish desired outcomes, metrics, milestones, and timeframes. Communicate the tangible benefits increased transparency brings for both parties.
Some shared supply chain visibility goals could include:
- Implementing integrated communications platforms
- Increasing data sharing for predictive insights
- Fostering sustainable growth through best practice sharing
- Enhanced end-customer satisfaction and retention
Evaluate supply chain management technologies that enable active collaboration across multiple external organizations. Inventory management systems, logistics trackers, control towers, and more allow businesses to view and share data in real-time across the supply chain.
Platforms like FourKites provide real-time shipment tracking across all logistics partners. Ulula offers a collaborative dashboard for managing exceptions across the supplier network.
Technology removes manual efforts, enabling broad visibility at a low cost through extensive data sharing.
Step 4: Accelerate Digital Transformation
Fully embracing digital transformation is the foundation for building a transparent, resilient, and optimized supply chain. Advanced technologies like IoT, AI, and Blockchain enable proactive visibility and rapid response to disruptions.
4.1 Construct a Living Supply Chain Digital Twin
A digital twin is an up-to-date virtual representation of your entire end-to-end supply chain network. It combines real-time data from IoT sensors, ERP systems, logistics trackers, consumer demand, and more.
Advanced simulation and machine learning provide dynamic visibility into every process and identify future bottlenecks and shortages. With a digital twin, you can:
- Continuously locate and track inventory across the supply chain
- Reroute shipments to avoid disruptions as they unfold
- Model scenarios and assess the impact of changes in real-time
- Automate repetitive decision making and workflow processes
The digital twin evolves along with your actual supply chain, continually optimizing itself as new data flows in. It becomes a living model of your extended supply chain ecosystem.
[Insert digital twin concept image]4.2 Ensure Organizational Readiness for Technology Change
When adopting new visibility technology, ensure your workforce has the skills, training, and cultural readiness to effectively leverage the tools. Appoint digitally-dexterous “supply chain visibility champions” to drive adoption and provide ongoing support.
Communicate benefits and conduct change management activities to smooth the transition. Modernizing processes, upskilling talent, and updating management styles prepares your organization for maximum visibility technology ROI.
Step 5: Continuously Measure and Refine Visibility
Improving supply chain visibility requires diligent measurement using defined KPIs, frequent assessments of progress, and refinement of strategies over time.
KPIs to track could include:
- Supply chain mapping completion rates
- Real-time data availability and accuracy
- Critical blindspot identification and resolution
- Technology adoption across ecosystem partners
- Time to detect disruptions and execution of mitigation plans
Collect feedback through surveys, meetings, and performance indicators. Adjust plans based on insights gained. Enhanced supply chain visibility is an iterative journey, not a single destination. Maintaining an agile, learning mindset enables your supply chain strategy to evolve and improve over time.
Today‘s unpredictable markets require agile, resilient, and transparent supply chains to thrive. While this may seem like an insurmountable challenge, following these 5 steps methodically can put your organization on the path to success:
- Perform in-depth analysis of your current supply chain
- Make data-driven prioritization of vulnerabilities
- Dramatically increase collaboration through partnerships
- Accelerate digital transformation initiatives
- Continuously track progress with KPIs and refine
With focused commitment and perseverance, you can proactively tackle supply chain uncertainty head-on. I urge you to take the first step today to start improving end-to-end visibility across your value chain. The investment made now will only grow in value as markets face increasing volatility and complexity in the years ahead.