Supply Chain Visibility: The Key to Understanding Your Logistics Operation

Written By
CloudSort Staff

An opaque supply chain—one in which the inner workings are not transparent to the logistics executive—can lead to costly delays, systemic inefficiencies, and competitive disadvantages. Of course, nobody aims for an opaque supply chain: it can happen for a number of reasons, including a lack of communication between the shipper and carrier, a lack of visibility into the tracking data, or a lack of standardization across fulfillment center processes. 

In response, a growing number of logistics companies are taking steps to make their supply chains more visible. They are using data analytics and machine learning to create models that can track shipments in real time and predict delays. By improving their visibility, these companies can avoid disruptions and better manage their inventories. In the long term, this will lead to more efficient supply chains and lower costs.

The Advantages of Supply Chain Visibility

The main advantage of supply chain visibility is that it enables a real-time understanding of everything happening throughout your supply chain. For logistics leaders, this is valuable information because it helps them make decisions about where to allocate resources, when to respond to potential problems, and how to avoid costly delays and disruptions.

When all members of the supply chain have visibility into data, everyone can make better decisions. Having this data available in real-time—information on inventory levels, supplier performance, customer demand, etc.—can help businesses make more informed decisions that can improve the bottom line.

For example, if you see customer demand consistently outstripping your inventory levels, you can adjust your production or sourcing strategies accordingly. Or if you can see that a certain supplier is consistently late in delivering their goods, you can switch to a different supplier that can meet your needs more effectively.

Ultimately, supply chain visibility has a positive effect on a company's bottom line. By uncovering risks, and mitigating reputational costs and damage, supply chain visibility can save a company a significant amount of money. When businesses have visibility into the supply chain, they can more effectively track and manage inventory, allowing them to reduce the amount of inventory that’s lost or stolen, known as “shrink.” In addition, the increased data access and strategizing that comes with supply chain visibility can lead to further cost savings. 

How to Achieve Supply Chain Visibility

Logistics executives who wish to make their supply chains more transparent need to shift their focus to a few core areas of their business. By investing in the following, business leaders can prioritize their way toward a highly visible supply chain that reduces inefficiencies and improves customer satisfaction

  • Cargo location. Knowing where your goods are at all times is critical to supply chain visibility. You need to be able to track your products from the moment they leave your facility until they reach their final destination. This information can be tracked through GPS tracking devices or by using RFID tags. 
  • Rates. In order to maintain supply chain visibility, you need to know the rates for all of the transportation methods you are using. This includes the cost of shipping, the cost of fuel, and the cost of labor. By having this information, you can make informed decisions about how to move your products most efficiently. 
  • Auditing records. Auditing records can help to improve the visibility of a supply chain by providing data about where bottlenecks occur, where products are being wasted, and where improvements can be made. This data can help managers to identify areas where changes need to be made in order to improve the efficiency of the supply chain. In addition, auditing records can also help to provide data about customer satisfaction levels. This information can be used to improve customer service levels and ensure that products are being delivered in a timely manner.
  • Supply chain activities. In order to maintain supply chain visibility, you need to be aware of all of the activities that are taking place in the supply chain. This includes manufacturing, packaging, shipping, receiving, and inventory management. By tracking these activities, you can identify problems and make changes to improve the efficiency of the supply chain.

The Power of Supply Chain Management Software

Supply chain management software is a tool that helps businesses plan, execute, and track their supply chain operations. It can be used to track inventory levels, monitor supplier performance, and optimize production schedules. The software includes analytical capabilities that help businesses identify trends and optimize their supply chains, while also providing data security features that protect businesses' most precious information from the prying eyes of unauthorized access. 

There are a few key things businesses should consider when debating which supply chain management software to purchase: How will the software fit into our existing processes and technology infrastructure? How user-friendly is the software? What is the total cost of ownership? How scalable is the software? What kind of support and training does the vendor offer?

What Does a Highly Visible Supply Chain Do?

What does a highly visible supply chain look like in practice? It’s one that is able to track the movement of materials from the source to a warehouse in real-time, allowing the business owner to see where their materials are at all times and to track any delays or issues that may arise. 

One example of a highly visible supply chain is a system that uses radio-frequency identification (RFID) tags to track the movement of materials. RFID tags are attached to products and can be read by special scanners that track the product's location. This allows businesses to see exactly where their products are at all times and to identify any roadblocks that pop up. 

Another example of a highly visible supply chain is one that uses GPS tracking to keep tabs on the movement of packages and materials. GPS technology can be used to track the location of trucks and other vehicles as they move products from one location to another, allowing businesses to see exactly where their products are at all times and to make real-time changes as delays are identified.

Investing in this sort of visibility will generally improve a business's operations by reducing the amount of time that gets wasted waiting for materials to arrive, and by allowing the business owner to quickly resolve any supplier conflicts, carrier delays, or customer concerns.

The supply chain is the backbone of any successful business, so it's critical to have visibility into every aspect of it. By improving the visibility of your supply chain, you'll be able to identify delays and potential problems more quickly, which will save your company time and money. Ultimately, you'll be able to make more informed decisions about your supply chain, which will lead to improved efficiencies and lower costs.