Jumping Visibility Hurdles Facing Multi-Tier Supply Chains
Supply chains link the upstream and downstream with products and service flows between facilities, companies, supply points, and service providers. Multi-tier chains are multiple same-level collaborations within one supply chain. But that one supply chain facilitates numerous supplier-to-buyer relationships.
Despite recognizing the importance of building resilience and operating sustainably, many companies still have not achieved multi-tier supply chain visibility. According to a 2021 Deloitte survey, only 15% of Chief Procurement Officers (CPOs) have visibility beyond their Tier 1 suppliers.
While most companies have visibility of their Tier 1 suppliers, getting that visibility and maintaining it can be difficult at times. This is usually due to data that is spread across multiple – often disparate – systems, locations, and departments. To further the issue, the sync times to get every sector up to speed lengthens as more parties become involved.
There’s no wonder then that breaking through the visibility barrier beyond simply seeing your Tier 1 suppliers is challenging. Given the current transparency of how and where products are manufactured and the ease of connectivity involved, what’s getting in the way of multi-tier supply chain visibility?
Roadblock #1: Trust
Digital transformations are hard work and require a lot of trust. Some companies have attempted to approach this using blockchain technology to verify reliability and trustworthiness. But even the blockchain poses issues around ownership and entry within a dynamic network environment.
Chain-of-custody traceability is necessary for successful visibility. So companies must look beyond the materials provided by their Tier 1 suppliers and the first line of customers.
Successful traceability requires collaboration with the chain, including every supplier’s supplier and customer. Since no company can gather all the information needed, partnering can strengthen the competitive advantage of each company in the ecosystem.
Roadblock #2: Siloed Decision Making Hampers Multi-Tier Supply Chains
Many companies still assign supply chain visibility functions to operations and procurement. They generally leave the management of such data to these departments as well. And it is here that a crack in the foundation, so to speak, begins to form. The lack of oversight, communication, coordination, and reporting standards affects chain-wide visibility. This lack of visibility impacts the entire company and affects all functions.
Direction and command from the top are necessary to achieve the cross-functional decision-making and communication required to gain true E2E visibility.
Roadblock #3: Timing
Companies often settle for a purely reactive approach to visibility to their detriment. Yet during downturns, companies experience more dramatic gains and losses than during periods of stability. Decide whether you will be proactive on visibility or focus only on core strengths.
Reaching Your Comfort Zone
The key to achieving end-to-end visibility is pushing through areas of hesitancy until reaching a comfort zone around multi-tier, multi-enterprise visibility.
Reimagining your technology strategy and business model isn’t easy. It’s the rock beneath your sustainability initiatives and essential to digital growth.
Start by expanding multi-tier visibility with supply chain partners in your ecosystem that you trust. Open and willing partners enable you to test data exchange value, such as understanding planning impacts, tracing orders and shipments, and improving response to supply and demand changes.
Supply chain ecosystems that overcome initial discomfort can share results with more hesitant partners. All will benefit in multiple ways:
- Improved asset utilization
- Fewer expedites
- Faster scalability
- Lowered business costs
- More customer satisfaction
- The factual basis for performance management
Many companies also experience a high return on investment (ROI) for their visibility efforts, depending on company size, operational complexity, and current level of digital maturity. Estimates include 3-7% operating cost savings and 3-5% savings from efficiencies across the supply chain.
Supply chain visibility can no longer be relegated to a pure operations function. Learn how not having end-to-end visibility affects all areas of your business, from contract compliance to customer satisfaction. Next, create cross-functional teams. This will give you a better picture of the objectives, standards, and results.
Final Thoughts on Increasing E2E Visibility of Multi-Tier Supply Chains
Technological advancements are occurring rapidly throughout all aspects of supply chains. Companies can no longer keep up with competitors and customer demands if they do not work now to build multi-tier visibility into their supply chain.
Creating visibility is extremely important to the health of your supply chain. It can be one of your best secret weapons when appropriately utilized, and Redwood Logistics can help you get there. Contact us today.