Visibility in the Supply Chain is More Crucial Than You Realize
This year is going to be a bit of a difficult one for the logistics industry as a whole.
There are the revisions to the ELD Mandate, driver shortages, and even new tariffs in place. Needless to say, logistics managers already have a rather large set of tasks to perform and problems to fix. And they need to get it all done while also trying to grow their company.
One of the biggest hurdles that a lot of supply chains are facing currently is the issue of how to create high end-to-end visibility across the breadth of their supply chain.
So, we figured it was time to highlight this topic and discuss what exactly it means to create high visibility, and furthermore, how it benefits a supply chain… or really any company for that matter.
What Does it Mean to Create High-Visibility?
When evaluating your logistics operations for areas that could be improved upon. Being able to see all of the moving parts that keep it running is absolutely crucial to keeping your supply chain in working order. By doing this, companies can meet all of these challenges head-on. And with a bit of patience, they can master the skills necessary to gain an advantage over their competition.
This is what we call “end-to-end visibility”.
In fact, companies that rely on a solid supply chain heavily invest in tools aimed to increase visibility. These include things like ERPs, CRMs, and WMSs, all of which help achieve higher visibility across all sectors of a company.
And while this visibility will not resolve all of the issues all on its own, it helps a lot. It is important to understand that there is no single miracle system on the market that increases performance overnight. But with the right tools, a bit of dedication, and some thorough data research… you can get a better picture of all your logistics processes.
It takes more than a solid data collection system, however. The system must also be backed by an appropriate and timely response from logistics managers. To this end, many companies are realizing that running just one system across their whole supply chain isn’t the most effective solution. Many are opting to use multiple systems. By doing so, they can make the most use of all that computing power across all levels of their operations. This multi-system method is great for covering everything from the global arm of the chain, down to the final deliveries.
By gathering all of this data, employees, and partners have a way to respond quickly to issues. This, all by itself, leads to making better, more value-driven decisions.
How Visibility Creates Value
By creating visibility, you, in turn, create value.
Let me try to explain…
Creating high end-to-end visibility is all about gaining insight needed to find issues in your supply chain. To obtain a more granular or detailed view of your entire operation, you start by collecting raw data from multiple systems. This data is stored in a centralized location, usually in an on-site server to await analysis. Lastly, the data is run through complex computer algorithms that yield predictive or preemptive results.
These prescriptions and suggestions, if put into play properly, allows logistics and supply chain managers to respond to upcoming disruptions and address and correct existing inefficiencies.
In essence, there are two main value-creating results when a company begins to get serious about creating high end-to-end visibility:
The first major area that higher visibility affects is revenue.
Shortages that happen within companies are usually the result of poor planning for upcoming shifts or events in the market or industry. And when they happen, it can result in companies losing billions, if not hundreds of billions in revenue. Whether they missed their sales, or just didn’t control their inventory flow well enough, it is always a major loss.
By enhancing visibility efforts and making use of analytic algorithms, a company can develop recovery methods in these events. Or if caught preemptively, avoid the loss altogether.
Lower Operating Costs
The second major area affected greatly by higher end-to-end visibility is the cost of doing business in general.
When you are able to see problems before they even occur, you can quickly remedy them. Most logistics managers would agree that they prefer to do that before the issues pose a threat to the supply chain. These problems could be as simple as slow load times due to a poorly managed inventory, to something as large as damaged deliveries. Either way, these problems often result in lost revenue or higher operating costs in one form or another.
However, with all the data you have collected, you can reduce overall volatility as you sit back and save money. This is, by far, more ideal than spending it to recoup afterward.
Creating visibility is extremely important to the health of your supply chain. When utilized properly, it can be one of your best secret weapons.
When you are able to clearly see all of the moving parts in your supply chain, you can also correct any issues that exist or may arise in the future based on cold, hard data.
If you need help creating a bit more visibility across your supply chain but just don’t quite know how to get started, please drop us a line here at Redwood Logistics and let us see how we can help you.