Estimated reading time: 2 minutes, 18 seconds

Supply Chain Intelligence: Using Your Visibility To Reduce Supply Chain Costs

Visibility 1If you have followed my writing at all, you already know I am the great advocate of Supply Chain Control Towers. Why, because they provide such great VISIBILITY into the whole supply chain. That easily translates into reduced supply chain costs. Let's see how!

Supply Chain Visibility: A Critical Strategy to Optimize Cost and Service is a great report from Aberdeen by Bob Heaney and posted by GS1. A survey of global companies shows that Supply Chain Visibility (SCV) is a high priority for improvement and a critical strategy. Supply chain execution and responsiveness require the tight synchronization of supply and demand, as well control of the three flows of commerce (movement of goods, information and funds) across a large number of logistic and trading partners in a wide geographic area.

It requires supply chain visibility which they define as “The awareness of, and control over, specific information related to product orders and physical shipments, including transport and logistics activities, and the status of events and milestones that occur prior to and in-transit.”

Visibility means more than just track and trace. It begs a control tower approach which covers everything from raw material to the delivery to the end customer. A global supply chain can be huge and every member must be in synch. This approach is defined as “A set of integrated processes and technologies that support a seamless flow of product from source to end customer, regardless of global complexity, or sales and logistics preferences of customers.”

There are a lot of pressures to improve Supply Chain visibility:

  1. Growing global operations / complexity (e.g. longer lead times and lead-time variability, or need to gain visibility)
  2. Need to improve supply chain operational speed and / or accuracy
  3. Increased stakeholder and customer demand for accuracy and timeliness of inbound / outbound shipment events
  4. The business mandate to reduce supply chain execution costs
  5. The need to reduce, proactively allocate, or manage inventory held at various stages in the supply chain
  6. Need to optimize the numbers of trading partners, suppliers, carriers, logistics service providers (LSPs)

Key Takeaways:
There is a continuing need for seamless integrated visibility and responsiveness across multiple enterprises.

  1. Product and Shipment Visibility (share data and adopt universal standards for barcoding, track and trace, and data exchange.)
  2. Transport and Logistics Events (logistics is the glue that interconnects raw and component suppliers through manufacturing, warehouse and 3PL facilities and on to the final customer)
  3. Supply Chain Finance and Intelligence (by leveraging available and emerging financial solutions, leaders have visibility into logistic, trade and financial costs).
  4. Enable Dynamic Collaborative Processes (all this increased visibility does is expose problems and opportunities.
  5. Bridge the blind spots and company silos as well as reduce current gaps in internal and legacy systems. 

The end result is reduced supply chain costs.

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