What Is Supply Chain Visibility And Why Is It Important?

Supply chain visibility is the tracking of a product from manufacture to final delivery. It is an improvement process for the supply chain, as it allows organizations to follow all stages of the product and avoid bottlenecks.

In other words, supply chain visibility allows managers to identify points of improvement, reduce errors, and invest in customer satisfaction.

Nowadays, we are living in an incredibly competitive market, where every detail makes a difference in winning a deal. In addition, we are also witnessing a technological evolution that requires adaptations and constant investments. 

Therefore, using adequate tools to manage your supply chain creates great benefits, which leads to cost savings.

Here, you will understand how supply chain visibility works, and how technology can contribute to improving this process. Enjoy your reading!

  1. What is supply chain visibility?
  2. How this process can help companies improve the supply chain
  3. Benefits of supply chain visibility
  4. Challenges of increasing supply chain visibility

What is supply chain visibility?

It is no news that supply chains are constantly affected by unforeseen events, such as political and economic instabilities, natural disasters, and bureaucracy in ports, road transport, and airports. 

For companies, these problems result in higher labor costs and lower productivity. With supply chain visibility, however, these events can be identified more quickly, enabling faster resolution and reducing negative impacts.

The supply chain refers to the process that imported and exported products go through. It goes from the moment the raw material is bought until the delivery of the finished product at its destination. 

We can exemplify this by considering every link in the chain. Starting with the purchase of raw materials for production, and going to completion, storage, packaging, logistics, sale, and distribution to the consumer. All imported and exported products go through this process.

Therefore, this process must be closely monitored to avoid unforeseen events and problems that may reach the final buyer. Below, you can see how supply chain visibility can improve your company’s processes:

Better integration

As the supply chain is an area that involves different agents, it is necessary to standardize and integrate processes to ensure operational efficiency.

Inventory control

Supply chain visibility allows logistic managers to have control over their stocks, and make materials available at the exact moment they are needed for production. Having a digital catalog enables the organization and structuring of all available SKUs and their specifications.

Transport and distribution

Product distribution is decisive to guarantee the quality of the customer experience and avoid your business from being saddled. That’s why being aligned with the logistics team allows you to ensure efficiency and avoid delays.

Results assessment

As it is a strategic area, it is necessary to monitor metrics and indicators to assess whether the process is working and identify possible bottlenecks. Using technology to support decision-making will make a difference in your organization.

Read also: How Digital Transformation Can Increase Supply Chain Resilience

Benefits of supply chain visibility

As we mentioned before, supply chain visibility provides many advantages for companies. Technology is an important ally for the success of this process as it allows unification and organization of all the demands of the chain in a single place. 

This also gives the entire company the ability to see what is happening in real time. Here are some of the key benefits of supply chain visibility:

More efficiency

With supply chain visibility, it is possible to optimize processes and keep the company always up to date with the market. This optimization even helps to deal with demands. Thus, it allows businesses to meet deadlines, maintain the quality of service, and stand out from competitors. 

Bigger profits

Having complete visibility over your supply chain avoid losses and optimizes processes, increasing sales. Thus, the profit margin increases and the cash flow becomes healthier. It is even possible to make a financial overhaul.

Integration between all sectors of the organization

A company counts several steps in different sectors, which need to work correctly to achieve the expected result. With good supply chain management, it is possible to unify and standardize all sectors involved, creating a solid and effective strategy.

Less operating costs

All the company’s logistics processes become more efficient with supply chain visibility. In addition, the organization saves production and inventory costs due to optimized internal logistics.

Greater competitiveness

With supply chain visibility, it is possible to build market strategies to get ahead of competitors. You will be able to predict demands, avoid seasonal problems, and guarantee stock of products that are lacking in competitors. In this way, the company will be prepared to face problems and stand out from adversaries.

Types of Supply Chain Visibility

The types of supply chain visibility for adopting a complete digital transformation in the companies are:

Shipment data

We all know several unforeseen events can affect a shipment, from its beginning to delivery to the customer. Businesses must prepare to face possible problems during this process. The shipment record gathers all the information necessary for its management, such as:

  • SKUs volumes
  • Order information
  • Lead Time
  • Port of origin/entry
  • Among others

Freight data

Logistics leaders need to know what they pay for when moving cargo. The rate seems simple to calculate, but the value can increase significantly when we talk about thousands of shipments, carriers, and operational centers. These variables must be considered when making strategic decisions. It is important to understand exactly what is spent to set goals according to the reality of the company. 

Visibility of performance data

We know that shipping data is critical to the day-to-day management of your supply chain. However, there are other important markers to identify points for improvement, such as broader performance data. With this information, it is possible to identify what is going well and establish solutions to potential problems that may occur.

Order and Inventory visibility

Visibility into orders and inventory should be the easy part of the supply chain to control. But in reality, the operational process can get in the way. For orders to be effective in meeting demand, it is necessary to manage inventory, expected demand, and incoming goods. However, in many organizations, once purchase orders are placed, teams lose all visibility into their status. With control software, it is possible to monitor this process closely.

Challenges of increasing supply chain visibility

Now you know the benefits of supply chain visibility. However, to implement it effectively, it is necessary to overcome some common challenges.

Most supply chain data is spread around in silos. In a supply chain visibility solution, each information format is considered, without leaving out any department in the process. It is important to manage and ensure data integration.

Besides that, it is essential to map supply chain vulnerabilities in detail so companies can make faster decisions when lower-tier suppliers are hit.

Entrepreneurs, especially managers, should stay alert and look for ways to optimize the logistics process, incorporating innovations into their business. 

Supply chain visibility allows a company to grow, keep up with all the market trends, get ahead of its competitors, increase its profit and, with that, manage to win satisfied customers.

To face all challenges, you can implement supply chain visibility in your company efficiently and cost-effectively. 

Logcomex’s platform, for instance, gives companies control over the operation, allowing them to monitor shipment data. It is a way to gain market competitiveness, reduce costs and streamline processes.

Our software makes data management more efficient, transparent, and with end-to-end operational visibility. Learn more!

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