Many supply chain leaders still consider supply chain visibility as a buzz phrase and don’t understand how supply chain visibility works. Traditional methods of executing and managing global logistics and supply chains have inherent limitations, and the business of supply chain has been traditionally dependent on manual processes involving spreadsheets or legacy systems such as ERP systems which are riddled with these limitations. Currently, a shocking 6% of supply chains have full visibility into their supply chains, with a whopping 88% experiencing shipping issues. Companies cannot achieve end-to-end visibility of their shipments and supply chain with such limitations as it is impossible to track and trace the various activities involved with manual processes and an outdated, disconnected system landscape.
While this harsh reality has plagued supply chain leaders for decades, it has also highlighted the need for radical change that lies ahead to achieve forward growth in the future. While it may seem like an impossible task, shipment visibility isn’t as out of reach as you may think. Studies find that 40% of supply chain leaders plan to invest in real-time supply chain visibility, with that number steadily rising. Supply chain leaders are putting measures in place to increase their shipment visibility today, and those who stay on the same tired path will surely be left behind.
What is supply chain and shipment visibility?
Shipment Visibility allows for a compressive view into a shipment’s lifecycle, from manufacturer to consumer. Shipment visibility encompasses three main buckets: port to port, port to door and door to door. Whether at the raw material stage, production stage or shipment execution stage, visibility allows supply chain leaders and their teams a complete picture of the global flow of goods and all of its moving parts. Running a global supply chain with full shipment visibility helps companies collate invaluable data relating to consumer demand and patterns, remove redundancies, and improve the efficiency of all supply chain processes.
What are the benefits of shipment visibility?
Shipment visibility is vital in ensuring robust supply chain operations. As we know, we cannot improve what we can’t see, and shipment visibility proves just that. Whether it’s port to port, port to door or other modes of shipment, you as a supply chain leader must ensure a firm grip on operations at all stages of the process. We’ve outlined below the three main benefits of supply chain visibility when implemented correctly and to its fullest potential.
- Cost-effectiveness is one of the major benefits of real-time supply chain visibility, as it allows the company to identify the flow of goods and have a clear view of the location of each order. This allows a reduction in stock levels, inventory costs, operational costs, as well as insight into the entire lifecycle of the product. Having supply chain visibility can ultimately result in a higher ROI for the company.
- The provision of exceptional customer experience has become critical to achieving customer satisfaction in supply chains. Customers expect faster, more reliable, and better services. This can be achieved only through using modern technologies providing full visibility into all your global shipments.
- Supply chain visibility can help in mitigating the many risks that supply chain operations face, including cargo theft, misplaced or lost inventory, and shortage of inventory. Through predictive data analytics that most modern technologies offer, companies can identify risks before it poses a serious threat to the business and take corrective measures if required.
Barriers to shipment visibility
With all the knowledge of how vital supply chain visibility is to organizations, why are there still barriers to achieving it? Many supply chain leaders find themselves stuck in outdated mindsets and outdated systems. Whether this be out of comfort or fear of change, it stops their supply chain from realizing its true potential and results in increased cost, inefficiencies, and roadblocks.
Lack of understanding of what kind of shipment visibility is needed. When looking at your supply chain, you must identify what kind of shipment visibility is lacking so you know the next steps to take to achieve complete visibility. Identify between the following options you need in your specific supply chain:
- Port to port. Port to port visibility is the journey a shipment takes from the port of dissension to its destination. Along the path, many things can go wrong. Shipments filled with tons of goods are left at sea for months on end, damaged, and sometimes fall off the shipment vessel completely due to turbulent weather/ conditions. Disruptions and roadblocks are inevitable, making visibility into this process essential.
- Port to door. Port to door visibility refers the process of transporting a shipment from its destination port to the consumers door. This process sounds easy enough; you may be picturing a truck parked and ready for a cargo boat to unload your specific container neatly and have it delivered to the end customer within a matter of hours.
- Door to door. In door to door visibility, your shipment is essentially travelling on one mode of transport throughout its journey. While door to door visibility generally leaves less room for errors due to its nature, there are always possibilities for roadblocks.
Not understanding the return on investment. Despite popular belief, supply chain leaders realize extraordinary ROI after implementing increased visibility into their supply chain, as many of those money eating roadblocks are resolved by increased visibility. What’s more, most real-time supply chain visibility platforms do not require you to own, operate and maintain their own digital assets, but merely require access to the cloud-based platform provided by the service provider. A new reality of saving time knowing where shipments are at stages, having predictive ETA`s allowing you to act before issues arise, faster decision making based on real time data, and much more is immediately realized. What’s more, all parties within your global supply chain network are working on one platform, allowing for full transparency, making way for inefficiencies to be spotted very fast through performance visibility and corrected in a timely way.
Perception of the timeline of implementing shipment visibility. Many companies have been working under the assumption that implementing end-to-end visibility into their supply chains should happen all at once. However, creating visibility and digitizing processes of supply chains can be done in a phased manner where companies can choose the areas that they need to prioritise and move to the next phases based on the progress and success of the implemented phases. For example, while providing pure port-to-port shipment visibility should take no longer than a few weeks, door-to-door shipment visibility at SKU level with attached order level information may take slightly longer, as setting up data transfer between systems and setting business rules must be defined. Matters become more complex when you set up visibility in other areas like landed cost as it requires a lot of experience, both in logistics and in technology and data management. So, timelines will surely vary across each unique supply chain, as no single plan/ timeline will work for every situation.
Lack of integrated approach. A supply chain involves several stakeholders handling various functions such as procurement, production, packaging, execution, distribution, and last mile all of which require close and timely coordination to work seamlessly. If each of these vendors uses their own siloed systems, there will be serious problems in areas such as collaboration, cooperation, and communication. This siloed approach is a big barrier to supply chain and shipment visibility for many companies as their system is not integrated. With modern technologies like supply chain visibility platforms, this becomes much easier for companies since they have already built up an eco-system that is integrated and provide proven and user-friendly, easily understood dashboards.
While these barriers to supply chain visibility discussed above may sound onerous, the solution could be much simpler than many think. Cloud-based digital supply chain visibility platforms leveraging the latest digital technologies are a proven way to overcome these barriers and achieve the efficiency that supply chain leaders need in their supply chain operations. By identifying barriers and proven practices to combat them, you’ll not only have a deeper understanding of your shipment operations but realize an incredible ROI and overall streamlined processes.