5 tips to overcome barriers to supply chain and shipment visibility

Jonas Mehrhoff
Jonas Mehrhoff
May 17, 2022
5 min read

Note on the authors

Heiner Murmann is the founder and CEO of Orkestra SCS, a logistics, technology and services company. In addition, Heiner serves as Executive Chairman for Evolution Time Critical and President of The Five Inc., and as an Advisory Board Member for both Metro Supply Chain Group and Black & McDonald Limited. Notably, Heiner previously held various senior executive roles at DB Schenker, one of the top three global logistics companies, as a Member of the Board of Management responsible for Air and Ocean Freight, and as CEO of the Region Americas.

Arnold da Silva, Senior Ocean Freight Advisor for Orkestra SCS, is head of an ocean freight consulting company where he actively advises global shippers on ocean freight strategy and execution. With 40 years of experience in the ocean freight industry, Arnold served as Executive Vice President for Ocean Freight Region Americas for DB Schenker. Arnold's passion is to conceptualize and implement innovative ocean freight solutions that transform one’s supply chain and promote a shipper's success.

The COVID-19 crisis and the resultant impact on supply chains has really highlighted how fragile global supply chains really are. While this crisis may have acted as a catalyst for the digital transformation in supply chains, it has also highlighted the radical change that lies ahead for this transformation to be achieved.

Supply chain leaders, 23% of supply chain leaders expect to have a digital ecosystem by 2025, compared to the 1% currently including supply chain visibility.

- Gartner

What is supply chain visibility?

Supply chain visibility entails having a track of where goods and products are, at all stages of the chain. Whether it is at the raw material stage, production stage or shipment execution stage, visibility is important to optimize and streamline supply chain efficiency.

Having this visibility helps customers collate invaluable data relating to consumer demand and patterns, remove redundancies, and improve the efficiency of the supply chain process.

Aside from a digital transformation and organizational transformation, there must be a strong collaboration between the various heads who look after supply chain and risk managers along with the usage of innovative technology solutions and advanced analytics in order to effectively manage risks in supply chain.

Benefits of supply chain visibility

Supply chain visibility is vital in ensuring a robust business operation and below are a few benefits of supply chain visibility.

  • Cost-effectiveness is one of the major benefits of a real-time supply chain visibility platform as it allows the customer 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, and also to understand and monitor the lifecycle of the product. Having supply chain visibility can result in a higher ROI for the customer.
  • The provision of exceptional customer experience has become critical to achieving customer satisfaction in supply chains. Customers expect quicker, speedier, and better services which have made the supply chain industry highly competitive even as delivery times have reduced. This can be achieved only through the use of digitalisation of the supply chain providing a consistent data flow.
  • Supply chain visibility can help in mitigating the several risks that supply chain operations face. Some of the key risks in supply chain include cargo theft, misplaced or lost inventory, and/or shortage of inventory all of which can be effectively controlled using supply chain visibility. Through predictive data analytics which digital supply chain platforms offer, companies can identify risks before it poses a serious threat to the business and take corrective measures if required.

Supply chains are in the middle of an evolution that will change completely how chief supply chain officers (CSCOs) organize and operate their organizations.

- Gartner

Barriers to supply chain and shipment visibility

Barriers to supply chain and shipment visibility

But why are there still barriers to achieving supply chain and shipment visibility? The one-word answer would be “Perceptions” which could morph into barriers in achieving supply chain and shipment visibility if not handled and clarified correctly.

1) Lack of understanding of how visibility works
Many people and companies still consider supply chain visibility as a buzz phrase and do not seem to understand how supply chain visibility works. Traditional methods of executing logistics operations 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 have several inherent limitations.

Companies cannot achieve end-to-end visibility of their shipments with such limitations as it is impossible to track and trace the various activities involved in supply chain with manual systems. Activities like warehousing, delivery operations, inventory management and transportation require real-time visibility to save on operational expenses and manage supply chain risks.

In 2022, organizations are projected to spend nearly $2 trillion on digital transformation, according to the International Data Corporation, spurred by a proliferation of new digital technologies and a fear of disruption by tech-enabled competitors.

- Business Wire

2) Lack of knowledge of benefits of supply chain visibility
Real-time supply chain visibility platforms are yet to achieve maturity and there is a natural perception in the market that a digital supply chain visibility platform that provides benefits as outlined above, collects and analyzes real-time data across all the supply chain activities, allows supply chain managers to make decisions based on data and predicts risks must be expensive.

Most of the real-time supply chain visibility platforms do not require the customer to own, operate and maintain their own digital assets and merely require access to the cloud-based platform provided by the service provider.

3) Perception of the timeline involved in the implementation
Many customers have been working under the assumption that the digital transformation of their supply chains should happen all at once in order for it to operate. Digitalisation of supply chains can be done in a phased manner and 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.

4) Skills shortage and lack of company culture
Perceived lack of skills is another barrier that many companies battle with as digital transformation grows in the supply chain industry. Contrary to many misconceptions that achieving supply chain visibility requires a specific set of skills, it is relatively easier and simple for staff to manage and run it.
Modern-day supply chain visibility platforms are easy to operate just like the oft-used Office and social media platforms. While the perceived lack of in-house skills may have been considered a major barrier to supply chain visibility, a lack of company culture that encourages digitalisation is definitely a barrier.

Technology is definitely a part of digital transformation, but unless leaders can ‘win hearts and minds’ throughout the process, efforts can stall or be less successful than they could be.

- Deloitte Risk and Financial Advisory

Digital transformation should be a top-down approach and requires business leaders to encourage and empower employees working across every stage of the supply chain. This helps staff to collaborate better and take advantage of the platform that provides real-time data in the end-to-end supply chain. This collaboration allows staff to access key data, encourages quicker and easier communication allowing for better collaboration.

5) 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 for all of this to work seamlessly. If each of these vendors uses their own systems which work in silos, there will be serious problems with regards to collaboration, cooperation, and communication.

This siloed approach is a big barrier to supply chain and shipment visibility for many customers as their system is not integrated. Customers can choose from several digital supply chain visibility platforms that do not cost an arm and a leg and can be integrated with their legacy systems easily and enhance their performance and provide results in an easy-to-read/understand dashboard.

Key take aways

While these barriers to supply chain visibility discussed above may sound onerous, the solution could be easier done than said. Cloud-based digital supply chain visibility platforms leveraging the latest digital technologies incorporating Machine Learning and Artificial intelligence are a great way to overcome these barriers and achieve the efficiency that customers need in their supply chain operations.

Customers are looking for a supply chain operation that makes it easy for them to conduct business in a simple and seamless manner and avoid frustrations and delays.

Delivering on customer expectations, ensuring customer experience and achieving customer satisfaction are vital and essential in a supply chain environment.

This requires supply chain leaders to invest in the right technology capable of transforming their supply chains, technology that can take the manual work and guesswork out of the customer’s desk.

Adopting new technologies is a major lever to increase the operational effectiveness of supply chain

- McKinsey & Company
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5 tips to overcome barriers to supply chain and shipment visibility

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