As supply chain management becomes increasingly central to business strategy, so the need for visibility within the supply chain becomes paramount. Greater end-to-end visibility improves revenue and reduces costs, while allowing for better management of disruption, complexity, opposition and growing customer expectation, Tech-Pro tells SmartProcurement.
Image: Erik Kriek, Supply Chain Movement 2013
Supply chain visibility (SCV) is a top priority for many companies, with 63% of respondents to the Aberdeen Group’s Visibility in the Supply Chain Survey citing visibility as a leading priority.1
Yet, definitions of the concept vary.
The Aberdeen Group defines SCV as ‘the awareness of, and control over, specific information related to product orders and physical shipments, including transport and logistics activities, and the statuses of events and milestones that occur prior to and in-transit’¹, while Gartner prefers the more inclusive ‘E2ESCV’ – or End-to-End Supply Chain Visibility, which is aimed at ‘providing controlled access and transparency to accurate, timely and complete events and data – transactions, content and relevant supply chain information – within and across organizations and services operating supply chains.’2
Benefits of supply chain visibility
According to CSC’s 9th Annual Global Survey of Supply Chain Progress, supply chain’s contribution to revenue increased to 8.5% from 4% previously, making end-to-end visibility in the supply chain a key factor for business success.3
In addition to driving revenue, the benefits of SCV include:
• Improved communication enhances collaboration between supply chain partners. This, in turn, enables a more flexible response to real-time fluctuations in supply, capacity and consumer demand.
• The possibility of achieving true demand-driven planning.
• Cost savings across the supply chain.
• Resilience, particularly better planning for, and response to, supply chain disruption.
• Improved speed across all areas.
• Enhanced customer service.
• Competitive advantage.
Improving visibility in the supply chain
Despite the benefits, 49% of respondents to KPMG’s GMO 2013 are “familiar only with their immediate Tier 1 partners in the supply chain and know very little about their partners beyond”, while only 9% can assess the impact of a supply chain disruption within hours.4
Research indicates that leaders in supply chain management improve visibility by:5
• Clearly defining expectations: visibility means different things to different stakeholders, therefore, clearly defined goals and expectations, combined with measurable benchmarks, are essential.
• Creating open communication between all partners: effective collaboration relies on open communication.
• Fostering trusting relationships: strong relationships, focused on shared planning and execution, encourage information sharing.
• Investing in technology: the ability to exploit technology and manage the resulting data explosion is critical to achieving a competitive edge.
• Identifying ‘wins’ for each partner: shared success enhances visibility.
South African success stories
There are many examples of South African companies improving visibility in the supply chain, with excellent results.
Collaboration between Imperial Logistics’ Trans-Send Container Logistics and Bidvest Panalpina for client Toyota South Africa has created exceptional end-to-end visibility in the motor manufacturer’s logistics chain. The transparency created by access to real-time data across all areas has allowed Toyota South Africa to plan more efficiently and improve customer service.б
Wallenius Wilhelmsen Logistics (WWL)’s factory-to-dealer solution for global automaker, BMW, has improved visibility and predictability in BMW’s outbound supply chain, managing finished vehicle delivery from eight factories in Europe, USA and South Africa. Consolidating under a ‘Lead Logistics Provider’ – WWL – has created real benefits, including a reduction in lead times by 10% to 15% and lower inventory costs.7
Implementing Imperial Logistics’ One Network technology at Pick n Pay, as part of an overall SCM and transport management services (TMS) contract, should see the retailer enjoying the benefits of improved visibility, better alignment of demand and supply – and estimated savings of 20% on transport costs over the contract period.8
Improved supply chain visibility offers many benefits. Is your supply chain looking at ways to improve visibility? We’d like to hear your thoughts on transparency as a means of improving demand planning and customer service? Join our discussion on LinkedIn.
1: ‘Supply Chain Visibility: A Critical Strategy to Optimize Cost and Service’, Bob Heaney writing for the Aberdeen Group, May 2013
2: ‘Gartner Quantifies the Benefits of Supply Chain Visibility’, GTNexus, November 2013
3: ‘The Ninth Annual Global Survey of Supply Chain Progress’, CSC, 2012
4: ‘Global Manufacturing Outlook – Competitive Advantage: Enhancing Supply Chain Networks for Efficiency and Innovation’, An Economist Intelligence Unit research program sponsored by KPMG, 2013
5: Various sources including Aberdeen Group/ CSC/ Inbound Logistics/ KPMG
6: ‘Achieving Supply Chain Visibility through System Integration’, Imperial Logistics, February 2013
7: ‘A Transparent and Reliable Global Supply Chain: BMW Case Study’, WWL
8: ‘Imperial Reduces Costs and Boosts Service for Pick ‘n Pay, Imperial Logistics, 2013