by admin / 07 Oct, 2021
Three Ways Real-Time Visibility Can Improve Your Supply Chain
Modern computing technology has made end-to-end real-time visibility possible. Market conditions have made it an imperative. As the world locked down to keep Covid-19 at bay, the global nature of our economy became starkly obvious. Factories couldn’t get the components they needed and supermarkets ran out of necessities like toilet paper.
A survey by the Institute of Supply Chain Management found that 75% of companies reported supply chain disruptions over the period. In a complex world in which global markets reign, a supply chain with real-time visibility has become a necessity. Organizations that transform their supply chain will reap the benefits. Those that don’t may fail to thrive.
Organizations with real-time visibility can track products or their components from the most remote tier-n supplier through the supply chain to order fulfillment. This information is available in real-time through every supply chain process.
Real-time information about disruptions maximizes the time available to resolve issues. It ensures that you’re not presented with any surprises. You’ll know what to expect and when to expect it. When the cargo arrives, you’ll be ready to offload and pack or process the goods.
Role of technology and supply chain collaboration
Supply chain visibility is all about sharing quality information. It’s about breaking down silos and collaborating with supply partners. Technologies such as Geographical Positioning Software GPS, RFID Bluetooth technologies, and the Internet of Things have made real-time visibility possible. Yet, without collaboration, the silos persist and supply chain visibility remains elusive.
Supply chain data is often spread across several organizations. Until these organizations partner and share data, real-time visibility is impossible. Supply chain integration dependent on:
- Operational integration – the capacity to track the product through own operations such that you know where it is at any given time. It is often managed through IoT integrated with the computer network. IoT can also provide other important data such as ambient temperature.
- Partner integration – extends supply chain visibility to supply chain partners. It ensures that the full value chain is covered. This eliminates data inaccuracies and communication problems.
Three Ways Real-Time Visibility Can Improve Your Supply Chain
Real-time visibility can transform your business. The insights and information that it delivers can help you to make quick and informed decisions. The result is improved customer service, enhanced efficiencies, and smoother more predictable operations across the supply chain.
Ensuring customer satisfaction
An efficient and responsive supply chain is key to ensuring customer satisfaction. Yet, many believe that efficiency and responsiveness are at opposite ends of the supply chain spectrum. That may once have been the case, but current technologies can bridge the gap.
Today’s customer is more demanding than ever. Transparent pricing and competitive online shops ensure that customers know competitor prices. As a consequence, they expect top quality products and services at reasonable prices. They also want overnight delivery at no cost.
The internet has opened global markets, so people can buy products from almost any corner of the world. Amazon’s overnight delivery promises have increased customer expectations. At the very least your customer will want a delivery promise that they can rely on. They will also want to track their shipment so that they can see where the cargo is at every stage along the way.
To thrive and grow, in this environment, organizations must offer agile delivery while cutting operational costs.
Disgruntled customers can cause more damage now than ever before. Complaints on social media have the potential to cause enormous reputational damage. Such damage will inevitably constrain growth and profitability. Happy customers, on the other hand, will return. They’ll tell their friends and family about the experience and your business should grow and prosper.
Improving resource efficiency
Real-time supply chain visibility should benefit every business in the supply chain. It allows organizations to plan ahead ensuring that the resources are available when required.
With real-time information, warehouse managers can streamline operations and reduce dock constraints. Logistics providers can optimize load and route efficiencies. Efficient shipping ensures that orders are delivered faster at a lower cost.
When businesses have access to real-time data, they can make contingency plans. If, for example, a supplier has a breakdown, the downstream manufacturer has time to find an alternate source of supply. The transporter can change the driver’s shift and the warehouse manager can arrange different shift patterns.
Another benefit of real-time visibility is the reduction in inventories. Certainty reduces risk and so organizations can reduce inventories right across the supply chain. Stock reductions save costs across the board. These costs include warehousing, insurance, obsolescence, handling, and holding expenses.
Cash flow will improve along with the reduction in stock holding. On-time delivery will also allow the company to invoice earlier with further improvements to the flow of cash in the company.
Keeping up with customer demand
Real-time information will help to reduce what is known as the Bullwhip Effect. The Bullwhip Effect happens when uncertainties exist in the system. Below is an example of how disruptive bullwhip can be to the entire supply chain.
- There is a 3% increase in consumer demand
- The retailer responds by increasing orders by 5% just in case this is a trend
- The wholesaler reacts by increasing the order for the product by 7%
- The factory now has to manage production at a higher level, paying overtime or hiring additional people
- There is now too much stock in the system. The factory and all the upstream suppliers will have a lull in production and may have labor with nothing to do.
Real-time visibility gives everyone along the supply chain the confidence to replenish only that which has been used. Every organization along the way can see each day that which is required.
It’s time to change
Current technology can deliver real-time supply chain visibility. Such visibility offers every supply chain partner the benefit of cost reductions through greater efficiencies. Resource efficiency and improved customer service will enhance profitability. Inventory reductions and on-time delivery will improve cashflow.
All in all, the benefits of real time visibility have the potential to translate into a competitive advantage.