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Supply chain visibility is key to success
Supply chain visibility is of paramount importance to all the players who rely on it, says Ken Jones, director of Executive Education at Western Michigan University’s Center for Integrated Supply Management and an instructor on supply chain matters.
“At its highest level, it is important to proactively coordinate all elements of the supply chain from raw materials to customers,” says Jones.
A visible, transparent supply chain also has a positive impact on economics. According to Jones, a visible supply chain “helps anticipate behaviors in the chain, either positive, like increased demand (for a product) or negative, like breakdowns or failure modes.”
Who should care about supply chain visibility, anyway?
In Jones’ mind, the pressing issue for players in the supply chain is not who should care about its visibility, but who shouldn’t. And that, he says, is a simply question.
“Everyone” involved in the chain should care about its visibility, says Jones. For example, the marketing experts involved in the chain should be concerned with a supply chain’s visibility because it helps track demand and ensure inventory is going where it is needed.
Money gurus are impacted by a supply chain’s transparency, too. According to Jones, finance departments should be concerned with “accurate information on investments and cash flows.”
Of course, supply chain managers themselves have an interest in how visible the chain is, too. That’s because supply chain managers are tapped to manage suppliers and supply chain performance. Implementing and maintaining a transparent supply chain helps supply chain managers track “how suppliers are doing from the supply chain/delivery cost perspective,” states Jones.
The good, the bad and knowing when your supply chain is truly transparent
You know your supply chain is visible when “when you can anticipate beyond your immediate supplier and immediate customer,” says Jones. If a company can look several layers into its supply chain and accurately anticipate the future needs of its customers, its supply chain is transparent, he explains.
Being able to respond to market changes is a huge benefit of supply chain visibility. Another bonus is the cost-savings reaped by not shipping unneeded products and not incurring the other costs involved with that wasteful endeavor.
But the biggest benefits of maintaining a transparent supply chain are the “clout and experience to exemplify the right behaviors to smaller companies,” says Jones.
But all is not necessarily rosy when a supply chain is visible. According to Jones, a company “usually needs to invest in systems and processes” to get the supply chain humming. Such an investment is costly, because the technology required to create, implement and maintain a well-oiled supply chain is expensive.
Because achieving supply chain visibility is a long-term endeavor, not an overnight project, many companies shy away from attempting it. Says Jones, “It’s a multi-year journey to imbed the needed systems and processes.”
“The devil is in the details. Of course, companies want to know what end-customers are doing and buying, and creating that complex system is the challenge,” sums Jones.