Visibility is the best way to make your supply chain more efficient — you have to see what’s not working to fix it.
Technology and automation streamline all aspects of supply chain operations, and the main way they do so is visibility. Knowing where shipped goods are at all times keeps logistics partners informed enough to perform optimally.
“You can’t manage what you can’t measure.” That’s management consultant Peter Drucker’s take on how to facilitate efficient logistics. To do that, Drucker believed organizations should set goals that were Specific, Measurable, Acceptable, Realistic, and Time-bound (SMART). You need visibility to set goals such as this, and that’s why freight visibility is so important.
In this article, we will discuss why visibility is crucial to increasing efficiency by looking at:
The increasing importance of visibility
How visibility helps with customer satisfaction
How visibility removes regulatory challenges
How visibility increases your forecasting ability
The increasing importance of visibility
We always knew the world was big and complex. Dealing with global vendors and customers has proven this. Supply chains are no longer linear, and networks continue to expand. Simple tracking systems are ill-equipped to ensure that products are manufactured and efficiently delivered.
A recent survey by GEODIS of supply chain professionals in 17 countries underscores the importance of supply chain visibility.
70% of firms described their supply chain as “very” or “extremely complex”
74% said they use four to five different transportation modes in their supply chain
84% outsource their transportation services
81% of firms are using one to three KPIs to assess supply chain performance
The most insightful takeaway from this survey is that only 6% said they have “full visibility” of their entire supply chain.
Complexity is increasing even if you don’t have a global supply chain. Many manufacturing companies now see as much as 80% of their supplier network activity outside their physical footprints.
The top contributor is the growing volume of information that must be tracked. The UK-based Cranfield University for Logistics and Supply Chain Management reports that there can be up to 52 pieces of data that need to flow across a successful supply chain. This can overwhelm most traditional supply chain or ERP systems. You can’t manage data that’s not being tracked.
What the customer wants
The customer is the winner as globalization fuels competition. They can be more particular and demanding, and they can change their minds quickly. Lengthy delivery times or missed deadlines aren’t tolerated. Logistics mistakes are a cardinal sin that frequently causes supply chain disruption.
The only way to zig when customers zag is to have a view of the supply chain that allows you to make quick changes and see the repercussions of those changes. You can’t satisfy a customer if you aren’t aware of every step of their purchase’s journey.
A rise in regulatory obstacles
The only thing constant in government regulations and compliance is change. Oversight will continue to increase as countries move forward in policing fair trade, and government tariffs and trade agreements will become even more complex.
The only way to successfully navigate regulatory obstacles is to provide full visibility to your supply chain with technology that provides information quickly. Whoever is at the end of your supply chain isn’t interested in hearing that what they bought from you is held up by government red tape.
Out-of-focus forecasting
In the spirit of Peter Drucker: You can manage what you measure, and you can apply SMART goals — but what if you’re measuring incorrectly because you don’t have full visibility of your supply chain? A single crucial leg of your logistics that’s off the radar is enough to drastically skew your data.
It’s a domino effect: You need visibility to know how, where, and when to take action. That means you may be paralyzed while you wait for what you can measure to reappear. You can no longer afford to have any part of your logistics chain resist your ability to probe it for actionable information.
Today’s cloud-based supply chain management platforms bring everything into visibility — and clarity — in real-time. They are engines for information gathering and good decision making that result from supply chain visibility. It doesn’t help just your organization, it also provides a collaborative gateway that allows vendors to offer you better pricing, and regulatory organizations to automate your interactions.
Looking for a partner to help you gain better supply chain visibility for more efficient logistics? Learn more about how we can help.