How To Improve Your Supply Chain Visibility With Real-Time Data
Modern supply chains are long and complex, often involving multiple countries and modes of transport. This increases the risk of disruptions that can leave you or your customers starved of essential materials, components, or assemblies.
If a manufacturer can avoid problems and react quickly to those that arise, it has a significant competitive advantage. However, doing so requires granular, real-time data about what’s happening throughout your entire supply chain.
Modern supply chain management solutions can provide the visibility you need for fast, effective decision-making, and greater customer satisfaction. In this article, we’ll explain what these solutions look like and what they can do for your business.
What Is Supply Chain Visibility (SCV)?
Supply chain visibility is about knowing the location and the movement of all the materials needed to run your business. Movement matters because otherwise, you only have a static snapshot. While this might help with inventory records, it does little to help with making decisions — to make sound choices, you must know when goods will reach their destination and be available to move on to the next step.
Supply chain visibility is both internal and external. Within your business, you need to know the location and status of orders and inventory. This is something enterprise resource planning (ERP) systems aim to provide, although achieving accountability and efficiency in production can be challenging.
You must also consider what happens outside your facility walls. No business is isolated from the world, so it’s essential to gain visibility into the entire supply chain — from raw materials, to suppliers and subcontractors, to distribution and logistics operations. This visibility must break down to a highly granular level and should be as timely as possible — getting information about changes in your supply chain as they happen will better position your business to get ahead of potential issues.
Why Is Supply Chain Visibility Important?
Imagine not being able to track the status of an order of raw materials that you placed. You wouldn’t know when to expect it, which could affect how you use the inventory you have on hand. Late material arrivals or shortages might disrupt production schedules, requiring changeovers and overtime work to avoid late deliveries.
Customer demands change unexpectedly in terms of volume and product type. Do you have enough inventory on hand to meet a change in demand? Or will the customers have to wait?
These examples demonstrate the consequences that a lack of supply chain visibility can have on your business. In both scenarios, poor or no visibility will affect customer satisfaction and increase business expenses.
The goal of supply chain visibility is to enable better decision-making, so you can optimize how your resources are used to satisfy your customers. This requires detailed insight into your internal operations — from your raw materials to the final shipments to customers.
What Are the Benefits of Supply Chain Visibility?
Having visibility into the entire supply chain provides many business benefits. Below, we’ll drill down into some of the most significant benefits in greater detail, including:
- Obtain measurable KPIs
- Gain a distinct competitive advantage
- Forecast supply chain trends
- Boost customer satisfaction
- Streamline compliance
Obtain Measurable KPIs
Planning requires the ability to forecast accurately. Once you have visibility into your supply chain, you can monitor performance and forecast from there. KPIs should be established on all aspects of the supply chain processes affecting business performance, both inbound and outgoing — although it’s also important to be selective and have just a few KPIs to track. You may want to consider tracking these important supply chain KPIs:
- Perfect order rate: This is the percentage of orders delivered complete and on time with no errors or discrepancies.
- Customer order cycle time: This measurement tracks how long the customer waits to receive their products.
- Days inventory on hand/inventory turnover: These metrics indicate whether a business has more inventory than it needs (or perhaps not enough).
- Fill rate: This measures the percentage of single complete orders that don’t require subsequent shipments.
Gain a Distinct Competitive Advantage
Data has long been a source of competitive advantage, and a company with excellent visibility into its supply chain management activities has a substantial advantage over competitors that don’t. Granular and preferably real-time data enables planning because it predicts the arrival and movement of materials, components, and orders. It can support sustainability initiatives, too, by helping reduce waste, especially in the realm of perishable goods transportation.
Good supply chain data is essential for applying logistical best practices. This helps optimize inventory levels and manage bottlenecks, and lets a business react faster to unexpected disruptions — such as a cargo ship full of materials getting stuck in a narrow waterway. With accurate, timely insights into the supply chain, your business would learn about such problems quicker than competitors without good supply chain visibility, allowing you to make quicker, more effective decisions.
Forecast Supply Chain Trends
Historical data is the foundation of forecasting. In the supply chain, forecasting includes determining the probability of a shipment arriving in a defined window, cost increases, lead times, and more — sometimes called “risk delay metrics.”
The goal of forecasting is to reduce uncertainty and variability, and improve resource utilization. Good forecasts let a business reduce safety stocks, manage demand fluctuations, and improve customer satisfaction.
Boost Customer Satisfaction
Customers are satisfied when they receive what they want, preferably in the least possible time. KPIs like perfect order rate and fill rate help measure customer satisfaction, although tracking these metrics won’t boost it.
Supply chain visibility boosts customer satisfaction by enabling accurate forecasting, and manufacturing and shipping planning. Full visibility into the entire supply chain, coupled with ERP in manufacturing, gives sales teams the ability to make delivery promises that you know you can keep. Plus, should a customer order need special materials or components, the supply chain management system will be able to indicate how that affects timing and delivery.
Returns management is another area that is quickly growing in importance for customer satisfaction. Customers expect to be able to return products that are unsuitable or no longer needed. The right supply chain management supports this reverse logistics process and streamlines the returns process, so it’s convenient for your business and the customer.
Most supply chains are global. Materials are extracted and refined in one country, then shipped to another, where they become the input material for manufacturing processes in a third country. Then, the finished product enters the distribution system, which may see it exported to a fourth country.
All these movements and transactions are subject to regulations and, of course, taxation. For example, there are rules about where raw materials can and cannot come from, as well as tariffs and sanctions imposed by some countries on others. Demonstrating compliance with all the applicable rules requires documentation, which can become tedious.
A modern supply chain management solution automates and consolidates this record-keeping. This makes it easier and less costly to maintain the records that demonstrate compliance with international and domestic authorities.
Enhance Visibility With SCV Software
Most manufacturers found implementing ERP to be difficult — and that was when they had full control over the processes they were trying to automate. Thanks to disparate systems, legacy systems, and information silos, the challenge is even bigger in the supply chain. As a result, many supply chain professionals manage this complexity with spreadsheets, handwritten notes, and in some cases, inventory management tools.
None of this provides the visibility or automation needed in today’s world. It’s highly error-prone, incomplete, outdated, and inaccurate, and therefore a poor basis for making business-critical decisions.
The solution is to adopt supply chain visibility software. Supply chain visibility software is a technology solution that automates the process of gathering and making sense of available information. It addresses the record-keeping needs of stakeholders, but adds predictive analytics for forecasting automation. Some solutions incorporate AI for decision support, similar to Anvyl’s production management service.
The Importance of Real-Time Visibility
“Real time” refers to continuous updates. As new information comes in, the software updates records and predictions immediately, rather than on a rolling or periodic basis.
The benefit of being real time is that it allows businesses to react faster to global supply chain disruptions and changes. For example, a truck might break down, meaning the load it was hauling will arrive late. With real-time updates, managers could decide to keep the loading dock open later rather than sending the truck away. This might avoid stock-outs or congestion.
Exploring SCV Software Data
Your SCV software should have the ability to access and report on any data related to logistics and manufacturing. The primary examples/capabilities to look for are:
- Order status: Has it been acknowledged, completed, and paid?
- Rates: Shipping can be a significant proportion of total business costs. Effective supply chain software lets you track what you’re paying, helping you identify trends and look for cheaper alternatives.
- Shipping details & cargo location: Knowing how your orders move and where they are in real time is at the heart of supply chain visibility. This information enables inventory optimization and efficient production scheduling.
- Auditing records: Visibility includes the ability to access historical information on orders, shipments, and deliveries. This capability supports improvement efforts and demonstrates compliance with legislative or other regulations.
- Payment due dates: This is valuable information for financial management, as it gives insights into when your company can expect ebbs and flows in revenue.
- Payment status: Knowing when orders have been paid is another key part of financial management. Payment status assists with tracking cash flow and identifying any deviations that need attention.
- Documents: The logistics industry is very documentation-intensive, and there’s a growing emphasis on traceability. The right supply chain product helps with tracking documents such as:
- Packing lists
- Bills of lading
- Quality checks
Improve Supply Chain Visibility With Anvyl
Modern supply chains are too complex to be managed effectively with spreadsheets, and are beyond what ERP systems can handle. Using the wrong supply chain management product means risking disruption to your production schedules — and late deliveries to your customers.
A real-time system provides a highly granular level of visibility into your entire supply chain, giving you actionable information for rapid decision-making and the ability to adapt to changing circumstances. It supports better stakeholder communication and helps measure performance, forecast events, and streamline internal processes. This leads to higher customer satisfaction and gives you a significant advantage over competitors.
Anvyl helps companies improve their supply chain management with sophisticated, yet easy-to-use software. Set up a demo to see how Anvyl can help streamline your business’s supply chain management today.
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