SUPPLY CHAIN VISIBILITY: DO YOU HAVE IT??

Visibility enables you to view inventory from P.O. to P.O.D. Visibility is a powerful tool that you can use to help customers manage and control inventory flows and at the same time keep vendors in the loop. For this to be performed accurately, inventory flows have to be tracked, and performed transactions should be visible on a common birds-eye view of the supply chain in the cloud.

An accurate supply chain visibility system that meets the above requirements provides several important benefits:

(1) First and foremost is the ability to react to unexpected problems in the chain that may affect the supply of inventory. An important order may be detained in customs longer than planned for an unexpected reason. Being able to accurately determine what and where your inventory is can help resolve such problems and minimize expenses.

(2) Minimizing lost sales at the clients' end of the chain may be improved as well. Monitoring processes visually reduces the chance of mistakes, contributing to a reduction in lost sales and a stronger ROI.

(3) Delivering a "perfect order." Visibility helps you fulfill a perfect order and reduce mistakes along the supply chain. If, for example, the wrong pallet was shipped to a customer, the error can be tracked before delivery, and corrective actions can be taken to avoid unnecessary paperwork.

Visibility vs Transparency
Supply chain visibility refers to the knowledge of where products are at any point of time in the supply chain. Visibility is shared among the shipper, suppliers, business partners and customers. Supply chain visibility has become a universal concept that includes all activities in planning, sourcing, producing, storing and delivering products. However, as supply chains became more global and complex, the definition of visibility expanded.

Transparency goes beyond visibility and requires deeper insight into supply chain processes and a complex analysis of all activities. Companies can’t just measure the effectiveness of each system and process separately – there needs to be metrics that reflect corporate-wide performance.

The dispersed nature of companies’ supply chains create risk and make transition from visibility to transparency critical and difficult. Only data gathered from both the supply side (product origin) and the demand side (customer experience, number of returns) of the supply chain can be analyzed with corporate KPIs and be used for operative forecasting, planning and risk management. Supply chain transparency isn’t easily achieved, but it provides a secure foundation for efficient management and continuous improvement.
If you are interested in reviewing top supply chain KPI's click on the links below:
Supply Chain KPI's: Data You Need to Know
Supply Chain KPI's - Metrics You Can't Ignore

Why Does Transparency Matter?
Consumers are much more educated and interested in the origin of the products they buy. Providing customers with tools and data to track product origins and journeys establishes a company’s credibility and builds brand value.

Supply chain transparency brings clarity to operations control and risk management, helping to:

• Reconcile inbound supply with outbound demand and achieve optimal levels of inventory
• Ensure that vendors supply approved materials and components only
• Measure the environmental footprint of a company`s products
• Identify weak supply chain elements and potential operational improvements

Data is useless without proper technology
Companies that want transparency in their supply chain are facing many challenges obtaining data: how and what data to collect, how to get it verified, and how it should be stored and handled. For a long time, companies have struggled with external suppliers’ data access, and managing data from dispersed value chains. Now, advanced technology allows companies to gather information from numerous internal and external sources for an objective view of the supply chain. Key technologies, like Transportation Management Systems and Global Trade Management solutions, are not fundamentally new, but they are evolving quickly and becoming more accessible for business partners and customers. Although gathering data is crucial, the real value comes from automating processes based on received information. Technology is the ultimate tool that makes it possible to drive true transparency into a company’s supply chain.

An Aberdeen article noted, "Before a company can reduce inventory or landed costs it needs visibility into them." Aberdeen points out that the increased complexity of global supply chains has led to longer lead times, more pipeline inventory, and the need to control downstream and upstream logistics. Aberdeen found that best-in-class companies were: 2.44 times more likely to have online visibility into the customs events status; 1.92 times as likely to have formalized supply chain risk management; 1.78 times as likely to have the ability to analyze the current level of supply chain risk exposure; and 1.7 times as likely to have online visibility into supply chain disruptions."

Visibility helps monitor and reduce risks in the supply chain and can also help identify emerging opportunities. In order to move towards a more connected and visible end-to-end supply chain and to master complexity and globalization, companies should extend visibility within and beyond tier enterprises; use dynamic business intelligence and decision making; centralize data and share collaboratively with customers and suppliers.

Chris Jones, Executive Vice President for Marketing & Services at Descartes Systems, offers recommendations for getting started. His first recommendation is to narrow the focus of your efforts. He writes: "The biggest challenges with visibility projects are scope and time to value. Visibility projects fail from the start when the scope is too comprehensive and there is a 'hockey stick' view of value. Because visibility is so nebulous for many executives, tangible results and momentum really matter. To get results fast, start by picking a defined portion of the supply chain (e.g. a small set of trade lanes) or a couple of critical supply chain events to track. Do not underestimate the time and effort of getting trading partners and carriers connected as it can be the longest part of the implementation. This is one of the reasons that network based cloud solutions with preconnected parties are becoming more pervasive."

The longer and more complex your supply chain is the more difficult it will be to achieve the kind of visibility you really want and need. Starting with a focused project that can be scaled is a good way to start. His next recommendation deals with the quality of data you use to gain visibility. He writes: "Did you know that the acronym ASN has two definitions: advanced ship notice and already shipped notice? As part of the initial phases of a visibility project, implement data performance reporting to measure the timeliness and completeness of data for all of the parties involved – including your own organization. Scorecarding data quality is just as important as delivery performance and will make and keep visibility projects producing great results."

One adage that entered our culture along with the computer age is "garbage in garbage out." If you don't sense, analyze, and act on the right data, you can't expect technology to interpret itself. Getting the right data is critical to success. Jones' next recommendation is ensuring that all potential stakeholders are included. He calls it "expanding your constituency." He explains: "The fatal mistake in achieving or maximizing visibility value is to keep the data confined to the supply chain organization. There are so many others that can use the information to positively impact supply chain performance. One version of the truth is essential to improving supply chain performance and do not assume that their systems will tell them what is really going on."

Supply Chain analyst Lora Cecere talks about integrating data (i.e., having a single source of truth) and then using that data many times as part of the sales and operations planning process. In other words, she agrees with Jones that "one version of the truth is essential to improving supply chain performance." Fortunately, cloud computing technology now enables such a capability to be implemented. 

Jones' next recommendation discusses adding layers of visibility. He writes: "It is important to understand that implementing a visibility system is a learning experience. By analyzing the visibility information with your greater constituency, you will expose blind spots in the supply chain. For example, knowing the status of customs clearance for international supply chains or scheduled dock appointments may be key information that provides you with a comprehensive view of your supply chain performance. Look for solutions that have a comprehensive view of the purchase order to warehouse receipt, but with the ability to layer in more events as your learn more about your supply chain performance drivers."

A visibility system should be flexible enough to be tailored to specific needs (including adding layers as required) as well as robust enough to be scaled from a pilot project to a organization-wide system. Almost all analysts recommend starting small and testing the system before implementing it on a company-wide basis. Jones' final recommendation is to make sure that achieving "visibility" provides value added (i.e., results in actionable intelligence). He writes:

"Visibility systems make information available to all of the supply chain parties and form the basis for making collaborative decisions that improve performance. However, these systems do not provide the actual collaborative process for making decisions. Without 'baked in' processes, so many visibility projects fail to realize their full potential. There is a next generation of multi-party applications that allow all of the parties to participate in the decision process and understand the impact of the decisions made by each party. These solutions use the information of the visibility system, but have the multi-party process built in to facilitate decisions and project their outcome. "

One of the benefits of a good visibility system is that it only requires the attention of decision makers when something abnormal occurs. Countless man-hours can be saved using this "management by exception" approach. The editorial staff at Supply Chain Digest agrees that visibility systems must result in actionable intelligence. The staff writes, "Visibility for visibility's sake doesn't do a company much good. Supply chain managers must focus on and clearly define what specific information will enable them to makes better decisions and effectively act faster to problems and opportunities." That is just one of the recommendations they make. The next recommendation involves building a proactive plan and roadmap. They write:

"Too many companies we see add supply chain visibility in a sort of scattershot fashion, based on perceived needs in some area or another at a given point in time. While the nature of visibility lends itself to falling into that fragmented approach, development of a master plan that sets priorities for effort and investment, and what sorts of visibility platforms need to be acquired or built will lead to a more effective and cost effective result."

Without a good roadmap, the possibility exists that visibility efforts will result in siloed rather than integrated information systems that actually make things worse rather than better. Visibility efforts should be aimed at breaking down information silos not creating them. 
Their next recommendation involves ensuring that a business case can be made for implemented systems. They write: "Visibility applications can be sometimes hard to justify. Managers know there are qualitative improvements, but find the hard savings at times is not easy. Vendors can help here – they go through this over and over again. But companies need to take their templates and really dive down into the details to not only produce a plan to gets the project approved, but also leads to the promised results delivered."

The Supply Chain Digests staff's next recommendation involved beginning a visibility project with your eyes wide open and recognizing that "much/most of the Information you need will be external." They explain: "If you have outsourced or virtualized much of your supply chain, by definition most of the data you need will reside outside your enterprise. This can be true even if a company has retained manufacturing and other functions internally. That in turn means connectivity becomes core to the visibility quest; we have found that some simply lack the will to make the effort. However, an increasing number of cloud-based vendors have achieved significant pre-connectivity to hundreds of companies and logistics providers."

The staff's final recommendation is that companies shouldn't assume that technology is going to solve all of their visibility challenges. They recommend investing "effort in non-systematic visibility" as well as technology solutions. They write: "While we tend to think of visibility as something that is technology based, leaders often actually spend a lot effort to get at data and insight that can't be captured systematically at the start.

In other words, make sure that risk management and future planning teams are part of the constituency involved in the visibility process. The Supply Chain Digests staff concluded, "Many have heard the old saying that 'What gets measured gets managed.' That's certainly true, but we could now add 'You can only manage what you can see.' The supply chain winners of the future will be those that have more information at their disposal, and use that information more smartly than their competitors. Welcome to the visible supply chain."

Visibility leads to a host of benefits: saving money, reducing inventory, increasing turns, boosting customer satisfaction, lowering risk, enhancing compliance, streamlining transportation, and enabling agility and resiliency. 

Technology is making visibility a worthwhile investment. That's good news in light of trends such as longer supply chains, shorter product life-cycles, increased supply chain risk, the rise of emerging markets, and shifts to less costly, but also less visible modes, such as steamships and long-distance rail. Visibility becomes the driver that enables supply chain managers to operate more efficiently and proactively, despite increased challenges.

The purpose of end-to-end supply chain visibility is to provide "controlled access and transparency to accurate, timely, and complete events and data—transactions, content, and relevant supply chain information—within and across organizations and services operating supply chains," according to Gartner's January 2015 research report, Evolving Concepts in Supply Chain Visibility. Visibility provides insight into activities you don't control.

Gartner's definition of supply chain visibility represents what it takes to achieve an all encompassing data driven end-to-end view for supply chain operators, but they have to travel a long road to get there. Analysts identify four stages of supply chain visibility maturity. It starts with static snapshots of data, such as inventory levels at a particular point in time, then matures to dynamic views of real-time, in-transit data—the answer to "Where's my stuff?"

As supply chain visibility grows more sophisticated, analytics come into play. The next stage is predictive visibility—not just where inventory is in your own or partners' supply chains, for example, but the impact of that information. It provides context for the data.

Finally, the most sophisticated visibility stage is prescriptive—offering not just the meaning of the data, but what actions to take as a result. "This degree of visibility allows you to deal with events before they turn into problems," explains Andrew Atkinson, director of product marketing for cloud-based software developer E2open. To accomplish this, technology replaces manual processes—such as email and phone communications, and spreadsheets that are slower, less accurate, and lead to guessing—with real-time event management and data-fueled decisions.

One example of predictive visibility comes from pharmaceutical markets as they expand to emerging countries, pharma manufacturers say a big challenge is ensuring products stay within prescribed temperature ranges for compliance and safety. Visibility technology helps to monitor sensitive shipments and allows for the opportunity to intervene with additional coolant or better routing when needed.

Anticipating events before they happen is of utmost importance. For example, if the shipper expects to receive information about a movement but don't get it, the lack of information will alert them to investigate and take action. For many shippers, the challenge lies not in getting access to the data to achieve these use cases, but in actually using it, says Manik Sharma, vice president of industry strategy and innovation for Kinaxis, a cloud-based supply chain software developer with headquarters in Ottawa, Ontario, Canada. "Visibility is the big ask" from prospects and customers, he says. "In most cases, they have data coming in, but they're not able to connect that data. If I have a shipment and data coming in, the data has to reflect into the plan so I can see what the impacts are, but often that connection does not exist," he adds.

Supply chain communications require one-to-one, one-to-many, and many-to-many communications, says Andrew Atkinson, director of product marketing for cloud-based software developer E2open, because supply chains are really networks of trading partners. Many shippers get stuck at the integration step, but a cloud architecture overcomes this. "Cloud-based connectivity is best for the connectivity layer as opposed to one-to-one communications," he says.

With the considerable time and resources required to reach more sophisticated levels of visibility through technology investment and process change, shippers choose to rely on the IT investments of their third-party logistics (3PL) partners. 3PLs serve customers across industries with widely varying requirements and capabilities. 3PLs create highly flexible platforms that can be customized to meet specific needs.

Customers genuinely expect that 3PLs should be leading-edge and aware of the latest innovations. Some customers procuring more tactical services simply need visibility into shipments, while other customers may seek more of an extended visibility via a control tower and analytics tools.

Advancements in technology have made supply chain visibility more accessible through tools such as cloud-based applications but companies have to evaluate whether acquiring that in-house is the best answer for their companies. Is that a core competency that makes sense? Acquiring the supply chain visibility you need is much easier when partnering with an experienced 3PL. 

Companies that decide to invest in the supply chain visibility software on their own have a longer more challenging road to achieving the business objectives they set out for. They have the tools, but they also need the knowledge, experience, and network to achieve those results. Offering those capabilities is part of a 3PL's value proposition.

Visibility is making the leap from nice-to-have to must-have, with the ROI evidence now available to justify the considerable investment required.

All shippers, but particularly those with sensitive goods, need monitoring and feedback to ensure safe transport, whether that transport pertains to ocean, rail or trucking modes. Today's dynamic and volatile market conditions has deepened the need for better supply chain visibility.

Many shippers are still using manual methods, like excel, email, and phone calls to keep track of their transportation budget. However, simply applying a little bit of technology in transportation, such as a transportation management system rich with the ability to automate and have visibility into shipments and shipping activity, can aid in creating a competitive advantage.

Use Technology to Provide Logistics Visibility to Shipments
As society grows more dependent on information exchange between companies and customers, the issue of supply chain and logistics visibility becomes prominent for companies. Modern shipping companies have cited visibility as one of their top priorities for optimizing the supply chain. However, visibility is commonly misconstrued as simply order tracking. However, logistics visibility actually can be used to provide insight into daily shipping processes, adjust shipping practices to account for changes in demands, and build stronger customer service relationships.

Consider Alternate Ports or Modes of Transport
For example, trade from a single port may become congested. If the logistics visibility tools identify this congestion, incoming shipments can be diverted to a less-congested port. As a result, disruptions and distressed shipments are lessened.

Assess Data Quality
Although data can be collected automatically across all shipment processes, the quality of data greatly affects its ability to enact change across supply chain practices. An automated transportation management system (TMS) can effectively screen and manage incoming data. Data which points to inefficiencies and potential disruptions can be quickly located, flagged for input from a manager, and used to change the supply chain practices. For example, data about weather delays could trigger the shipment of the same item from an alternate location where the delay in shipping the order would be less than the time required to get the original order from the area with unfortunate weather to the destination.

Furthermore, customers will see what problems cause delays in their shipments. As a result, customers will be less likely to contact the company about the order. However, the potential to cancel an order for a delay always exists. This brings us to the next point, enhancing logistics visibility back to the point of origin.

Point of Origin to Proof of Delivery Tracking
For international shipments, the point of origin of shipment comes under the scrutiny of the U.S. Customs and Border Protection (CBP). Failure to provide accurate point of origin information about a shipment will result in delays, penalties, and possible denial of entry to the U.S. for international shipments. This represents a major disruption in the flow of shipments across the supply chain. However, automated tracking and logistics visibility from the point of origin eliminates this concern. As a result, imports will suffer fewer setbacks and deliveries will be less likely to depart from the original, estimated date of delivery.

Automated tracking helps ensure compliance measures are met as required by the CBP. For example, import and export records can be immediately accessed upon request or on a recurring basis to be sent to the appropriate official at the CBP.

Gather Information in a Central Location
Although various methods and technologies exist for the tracking of shipments, the information lacks value if not kept in a central location. The central location of data or information hub provides companies with the opportunity to use correlations between existing problems or delays to reduce future delays. Furthermore, the collection of this data can be analyzed to determine how to best address a given problem. Ultimately, the information hub provides insight into all of the possible factors, which may be affecting a given shipment. The information hub can take place in the cloud.

Online Shipment Tracking and Customer Service
Many modern retailers offer shipping status tracking services within their websites, which helps drive traffic to the retailer’s site and improve customer service relationships. However, online shipment tracking relies on information from the respective shipper to ensure all information is up-to-date and reflects the accurate location and status of the shipment.

To take advantage of this trend towards retailer-website tracking capabilities, the supply chain must be willing to share data about a given shipment. Essentially, the entire premise of logistics visibility rests on the concept of sharing information about a given shipment. However, the sharing of data in this respect helps to build strong customer service relationships, which enhance a business’s reputation and drive the supply chain forward.

Visibility in the supply chain is the top priority for all involved in supply chain processes. Visibility helps reduce costs across the supply chain by maintaining communication between customers and businesses. Furthermore, visibility helps reduce costs from penalties and delays when shipments become disrupted while in transport. Ultimately, visibility in the supply chain is a tactic to save money and improve supply chain efficiency by making an entire organization, not individual processes, accountable for possible delays. As a result, customers will have a higher degree of satisfaction with the service.