Despite making it a top priority, only 6% of businesses have full visibility of their supply chain and logistics operations. The three key areas where visibility is essential are:
- Visibility of purchase orders for managing production logistics
- Visibility of shipments to deliver on customer commitments
- Visibility of inventory to meet sales targets.
Imagine how frightening an air traffic control tower would be without full visibility! Air traffic controllers still use their windows, but they also heavily rely on technology for full visibility and to keep them aware and responsive.
The same goes for a business’s supply chain. Outdated supply chain technology is like a control tower without a radar and modern equipment. If the supply chain team is flying blind, that’s when dangers occur.”
Jonas Mehrhoff. Jonas has 13 years' senior management experience in the supply chain and is the General Manager Europe at Orkestra SCS.
Poor supply chain visibility of purchase orders
Businesses need to rely on their vendors to fulfil their customer orders on time and deliver a great customer experience. But that can be a problem when operational staff do not have sufficient information or insights on the status of the orders they placed, whether it has been scheduled, already in production, even being ready for shipping. The result can be similar to looking down a black hole.
With bad vendors, the ramifications can be catastrophic to the point of destroying entire supply chains. In a recent survey of procurement leaders, 93% had experienced adverse effects due to misinformation from their suppliers, and it is a regular occurrence for nearly half of them.
Poor supply chain visibility of shipments
Similarly, businesses need to keep track of shipments to make sure the products arrive on time and, if necessary, act as early as possible should any deviations occur. And there can be plenty of deviations occurring on the journey from vendor to the customer.
As for purchase orders, the black hole often continues into the shipment stage. Without having visibility in just one system, it is extremely difficult to keep track of the shipment. This problem is compounded when a business works with several logistics providers who each have their own tracking system.
To get their required information, businesses regularly resort to emailing and calling their freight forwarder or carrier and shipment tracking is often managed in-house by spreadsheet.
Poor supply chain visibility of warehousing
Most warehouse systems work well, or well enough, but often systems are not synchronized resulting in data silos and therefore poor visibility of stock levels. This problem is compounded when warehouses are operated by different logistics providers or when they are geographically spread out within a large country or even located in different countries.
Poor visibility of stock levels can make it almost impossible to replenish the goods at the right time. Ordering too early bears the cost of carrying more inventory than required and an increased risk of costs due to damage. Ordering too late bears the cost of paying a premium for rush orders and freight, failing to fulfil customer demand, or worse, both.
Kevin Crawford regularly speaks to customers who are lacking inventory visibility, trying to perform their logistics operations with blinkers on.
No-one holds inventory if they can help it. Everyone is looking for ‘just in time’ solutions, and being able to manage their inventory levels. In particular, customers with a large customer service group or who have a large eCommerce outbound, need answers immediately. This is where logistics and supply chain management technology offers massive value through visibility and outbound integration.”