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Supply Chain Visibility – What It Means and Why It Matters

Supply Chain Visibility – What It Means and Why It Matters

21. May 2021

Supply chain visibility has become a widespread term and one of the megatrends in logistics. At the same time, the implementation of supply chain visibility is currently one of the greatest challenges for companies. Smart digital tools already exist in many functional areas. Still, many companies only make limited use of the advantages of digital tools for their supply chain.

Supply Chain Visibility – More than Track and Trace

A track and trace system helps to locate and track the exact location of goods. However, there is much more to supply chain visibility than just track and trace. Supply chain visibility means not only seeing where the goods are currently located, but also transparently mapping the processes and being able to assign responsibilities ultimately gaining an overall view of the entire supply chain.

Why is Supply Chain Visibility more important than ever?

The Corona pandemic has shown how strongly external influences can affect supply chains. Digitization and resilience are key factors that determine how a company can respond to crises. Particularly in the case of global supply chains and high volatilities, external influences are increasingly leading to severe impairments. According to a study by the Fraunhofer Institute for Manufacturing Engineering and Automation IPA, experts also anticipate a much faster-moving and more dynamic future. This is because customers expect more flexibility in the delivery of goods and product selection. 

Benefits of a transparent supply chain

Manage complexity

Supply chains are becoming increasingly complex, especially if the company operates on a global scale. TheySupply chains are thus becoming less transparent and it is increasingly more challenging to maintain an overview of all processes. Often, only parts of the supply chain are visible, and the overall view however, is missing. A transparent supply chain helps to uncover where things may be going wrong and how processes can be improved, hence helping business decision makers making timely decisions, minimizing risk and costs. 

Meet customer requirements

Customer requirements are constantly increasing. Customers want to know exactly: How far the delivery has progressed, how long do I have to wait for my goods? Should I expect a delay? They also expect ever faster deliveries without complications. 

Minimize risks and respond faster to disruptions 

With the growing complexity of global supply chains, the risks of far-reaching damage due to unforeseen events are increasing at the same time. Political influences, the failure of machines or the insolvency of suppliers can also be possible triggers for disruptions. The consequences are bottlenecks, high costs, and in some cases even a threat to the company’s existence. In order to minimize far-reaching damage, a fast reaction capability is required. In the best case, a transparent supply chain can optimize faulty processes in advance, in order to keep the susceptibility to disruptions low.

Improve business agility and speed to the market

An agile supply chain is characterized above all by the ability to: react flexibly, self-learn and react innovatively to market changes. A transparent supply chain provides the basis for rapid adaptability and responsiveness. Short-term and long-term changes within the supply chain can thus be realized much faster. 

Strengthen process efficiency and reduce costs

The economic success of a company is closely linked to the efficiency of its supply chains. A company with a well-managed supply chain can significantly reduce all operational costs associated with that chain. Lengthy communication loops due to ambiguities and changes also lead to inefficient processes, and this can be avoided through supply chain transparency. 

Create a fundamental basis for decisions 

Making decisions even in unexpected situations is part of daily business for every supply chain manager. Even to make long-term decisions on a sound basis, complete information is needed above all. This means information about the current state and how the decision might affect it. This is exactly where supply chain visibility helps to have a picture of the overall situation at all times.

Implementation still a major challenge 

Many companies are well aware of the benefits of a transparent supply chain, however implementation is still a major challenge. Especially for medium-sized companies, it is still difficult to find suitable solutions. A high implementation effort, high costs and a lack of resources slow down many companies. We at limbiq.com are working on solutions that make it possible to achieve a high level of transparency along the supply chain andeven without any upfronthigh investment costs. If you would like to learn more about this topic, simply attend one of our webinars or arrange a consultation with us. 

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