Why supply chain visibility is essential for business growth?

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.

One of the crucial roadblocks of any organization's success is the lack of data and visibility in their supply chain activities. Utilize the full potential of supply chain visibility to your advantage.

Supply chain visibility can help organizations achieve their vision in no time. A supply chain involves the operation of many parties. It would be impossible for an organization to collect all the data needed at any moment using traditional supply chain management tools like spreadsheets. The lack of synchronization and collaboration between the different parties within the supply chain is the main reason for poor order fulfillment rates and unnecessary logistics costs.

With the advancement in modern technology, it is now possible to set up a centralized digital supply chain management system. Supply chain management technologies provide near real-time data capturing your whole supply chain. Better visibility of your supply chain means:

  • Fewer disruptions
  • Better risk management
  • Lower logistics costs
  • Ease of compliance
  • Smooth order fulfillment
  • Better inventory management
  • High customers satisfaction
  • Drive results with data

Despite these significant advantages, only 6% of companies have achieved full supply chain visibility and 22% have a proactive supply chain network. Below we explore what supply chain visibility means, its roadblocks, and how achieving full supply chain visibility can support your business growth.

What is supply chain visibility?

Supply chain visibility is the ability to track any individual component or product across the entire supply chain from the moment an order is placed to when the product is in your customer's hands.

The goal of supply chain visibility is to provide near real-time data at every stage of the supply chain. Full transparency enables businesses to analyse supply chain data such as sales forecast, inventory status, and product demand to prepare better business strategy and risk management plans. This helps the operations as well as management teams to predict and address issues such as inventory shortages, order fulfillment issues, expensive expedited shipments, and more. It allows you to identify and act on potential problems proactively before they become major issues.

Poor supply chain visibility

Poor supply chain visibility jeopardizes your business

Lack of supply chain visibility is a threat an organization should never overlook. It jeopardizes the risk management and mitigation plans of the organization leaving them vulnerable to unforeseen challenges.

  • Disruptions can occur anytime due to natural or man-made disasters. Without supply chain visibility, organizations may not be prepared to face these disruptions.
  • Companies can lose track of their supplies due to a lack of visibility. This can lead to poor demand analysis and sales forecast which may leave you with too much or not enough inventory to meet your customers' needs.
  • A supply chain can involve hundreds of vendors across the world. Collecting all the data manually and managing it in a spreadsheet is impossible. This will lead to poor data analytics, which in turn impacts business decisions.
  • Unknown or hidden logistics cost.
  • Suppliers can be underperforming – causing disruptions further down the supply chain. Without proper supplier visibility, it is difficult to understand where the problems are.

Advantages of achieving 100% supply chain visibility

Reduce the effect of potential disruptions

Imagine your organization could identify any disruption before it happens. By using predictive analysis, you will be ready to face any potential issue with an effective risk management plan. Strong supply chain data analytics and transparency across partner networks enable you to minimize any disruptions.

Provide world-class service to your customers

Supply chain visibility helps you gain customer loyalty and establish credibility. Customers have access to detailed product status, including potential issues that might impact delivery, at any point during transit. Better transparency helps you to achieve high order fulfillment rates. Having a long-term loyal customer base is key to any organization's success.

Get the right suppliers

Get the right suppliers

60% of business leaders say that lack of visibility into their supplier's practices is a significant risk management issue

- Harvard Business Review

Transparency across partner networks enables you to check your vendor's activities, so you can have confidence in those you work with. You can validate whether they are behaving up to agreed-upon standards. The supply chain is a global market with steep regulations. Working with the wrong parties can jeopardize your whole organization's reputation.

Lower operational cost

Lower logistics cost by avoiding issues such as:

  • Slow-moving or obsolete inventory
  • Low container utilization
  • Incorrect duty costs
  • Unnecessary detention and demurrage fees

26% of the executives say transparent finance and procurement processes would lead to an 11% to 20% cost reduction

- Harvard Business Review

Supply chain visibility helps you compare available vendor’s performance, logistics rates, and credibility. Analyse and choose the right one who meets your price requirements and has the capacity to meet your orders.

Why is supply chain visibility essential for your business growth?

We all can agree that having end-to-end insights about your business is crucial for making decisions.

90% of executives say increased business transparency leads to better-informed decision-making across the entire organization

- Harvard Business Review

Implementing a centralized supply chain management technology provides better insights about factors like product demand, sales forecasts, material availability, and more. Your management team will also be able to identify and correct flaws in the system and tailor inventory levels resulting in increased customer satisfaction at lower operational costs. Supply chain visibility becomes a comprehensive resource for decision-makers to review and manage business activities, which will ultimately lead to revenue growth.

create supply chain visibility

How to create supply chain visibility?

Supply chain visibility sounds great. Deploying a central supply chain management system, however, is not as easy as it sounds. An organization must integrate its ecosystem into a single source of truth. Digitize, standardize, and automate all supply chain processes – simply implementing the digital supply chain management system without proper training for the people who use it is not going to generate the growth you desire.

One of the most important aspects of the transformation is to equip your team with the right digital mindset that embraces technology and is comfortable with complexity, uncertainty, and change. Both your organization and your partner's networks must be transformed to establish a completely transparent supply chain, end-to-end. That is how you achieve true end-to-end supply chain visibility.

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Why supply chain visibility is essential for business growth?

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