In the summer of 2000, with its order book overflowing but its assembly lines sputtering from lack of parts, Cisco Systems decided to crank up its supply line. It committed to buying components months before they were needed, and lent the manufacturers who build most of its Internet switching gear $600 million interest-free to buy parts on Cisco’s behalf. As it turned out, Cisco made a bad bet. On Monday April 16, 2001, with both its sales and the value of its surplus components shrinking, Cisco said it would write off $2.5 billion of its bloated inventory. People were in shock. In effect, Cisco executives had ignored or misread crucial warning signs that their sales forecasts were too ambitious. They overestimated Cisco’s backlog because of misleading information supplied by Cisco’s internal order network and continued to expand aggressively even after business slowed at some Cisco divisions. Alex Mendez, an ex-Cisco executive who left in November to become a venture capitalist, claims “Cisco always had a bit of trouble finding the brakes” (1).
The greatest potential of the Internet has been to facilitate collaboration between supply chain buyers and sellers to achieve better information visibility and facilitate better decision-making. Although the number of such applications is growing daily, one of the most promising is the ability to create information visibility between original equipment manufacturers (OEM’s) or large service providers (such as airlines) and their lower-tier suppliers. (A paper on this subject written by a group of students from NCState University recently won the 2002 Fogelman International Student Paper Award.)
Information visibility within the supply chain is the process of sharing critical data required to manage the flow of products, services, and information in real time between suppliers and customers. If information is available but cannot be accessed by the parties most able to react to a given situation, its value degrades exponentially. Increasing information visibility between supply chain participants can help all parties reach their overall goal of increased stockholder value through revenue growth, asset utilization and cost reduction. To improve responsiveness across their supply chains, companies are exploring the use of collaborative models that share information across multiple tiers of participants in the supply chain: from their supplier’s supplier to their customer’s customer. These trading partners need to share forecasts, manage inventories, schedule labor, optimize deliveries, and in so doing reduce costs, improve productivity, and create greater value for the final customer in the chain. Software for Business Process Optimization (BPO) and Collaborative Planning, Forecasting and Replenishment (CPFR) are evolving to help companies collaboratively forecast and plan amongst partners, manage customer relations, and improve product life cycles and maintenance. Traditional supply chains are rapidly evolving into “dynamic trading networks” (2) comprised of groups of independent business units sharing planning and execution information to satisfy demand with an immediate, coordinated response.
Perhaps no other company has been as successful in implementing information visibility as a competitive strategy than Dell Computer. Dell has fulfilled its commitments to customers through the company’s direct model, in which it holds only hours of inventory yet promises customers lead-times of five days. Component suppliers who wish to do business with Dell have to hold some level of inventory, since their cycle times are typically much longer than Dell’s (3). By utilizing the Web, Dell provides its supplier with forecasting information and receives information about the supplier’s ability to meet the forecasts. Dell uses i2 Technologies products for demand-fulfillment operations and products from Agile Software for engineering-change-order and bill-of-materials management. Communication between engineering changes, component availability, capacity, and other data between Dell and its suppliers flows both ways, in addition to forecasting and inventory data. Dell is also able to review suppliers and place Web-based orders into their factories in hours. After outsourcing to third party contract manufacturers, Dell executives realized that many of these manufacturers did not have adequate visibility of customer orders. This was a major driver in the initiative to increase visibility of orders. Dell’s build to order web-based customer model has become the benchmark for other industries, and organizations such as General Motors, Ford, BMW, General Electric, and others are seeking to create “build-to-order” models using the Web as the platform for taking customer orders.
Some of the considerations that must be planned for in implementing an information visibility system include the size of the supply base and customer base with which to share information, the criteria for implementation, the content of information shared and the technology used to share it. Clarifying these issues will help to ensure that all participants have access to the information required to effectively control the flow of materials, manage the level of inventory, fulfill service level agreements and meet quality standards as agreed upon in the relationship performance metrics.
(1) The Wall Street Journal, “Behind Cisco’s Woes Are Some Wounds of Its Own Making,” by Scott Thurm, p. A1, April 18, 2001.
(2) Cole S. J., Woodring S. D., and Gatoff J., “Dynamic Trading Networks”, The Forrester Report, January 1999.
(3) Lewis, Nicole. “Valuechain.Dell.Com Provides Pipeline to Info Exchange.” Dell Portal Adds ‘Value’. CMP Media Inc., 2001.
- Map Your Supply Chain Network.
- Be Proactive When Sharing Updates.
- Communicate Often With Suppliers.
- Offer Shipping Tracking.
- Provide Real-Time Shipping Updates.
- Partner With an Online Shopping Assistant.
- Gather Customer Feedback.
Supply chain visibility is the ability to track different goods and/or products in transit, giving a clear view of the inventory and activity. It enables shippers to improve customer service and cost controls through management of inventory in motion, proactive status updates, limiting disruptions and risk mitigation.What is information visibility? ›
Information visibility refers to the degree to which information is available and accessible. Availability focuses on whether people could acquire particular information if they wanted. Accessibility focuses on the effort needed to acquire available information.Why is information visibility important? ›
Having visibility will enable you to enter an order or document number and instantly see all the associated documents presented in an easy-to-read format. It should also empower non-technical users to easily view these documents, see their current status and identify important issues down to the line-item level.What is a visibility strategy? ›
Visibility is a tool to build influence and impact. It's a roadmap to make ideas happen. It is an activator of strategy. It disrupts traditional ideas around leadership and communications by combining self-aware and visionary leadership with authentic, strategic communications.How can supply chain visibility be improved? ›
- Analyze the supply chain.
- Identify pain points and prioritize based on strategic goals and objectives.
- Improve collaboration with suppliers, partners, and competitors.
- Balance digital technology and dexterity.
- Measure and improve with the help of KPIs.
However, lacking visibility into the flow of goods and services can be detrimental to a business. When companies do not have a clear view of their supply chain, inaccurate data can quickly accumulate, leading to costly errors and wasted resources. The impact on a business's bottom line cannot be understated.Why is information so important in supply chains? ›
Information is crucial to the performance of a supply chain because it provides the basis on which supply chain managers make decisions. Information technology consists of the tools used to gain awareness of information, analyze this information, and execute on it to improve the performance of the supply chain.What are examples of visibility? ›
- It was a clear day with good visibility. ...
- flying/driving under conditions of poor/low/reduced visibility.
- The fog was very heavy and visibility was down to a few feet.
The Visibility Method consists of three main parts: organic, paid, and social.
Visibility means how far or how clearly you can see in particular weather conditions. Visibility was poor. 2. uncountable noun. If you refer to the visibility of something such as a situation or problem, you mean how much it is seen or noticed by other people.What is the main objective of supply chain visibility? ›
The broad goal of SCV is to collect better information about supply chain operations, improve efficiency, reduce risk, boost customer satisfaction and increase profits.What are the advantages of visibility in supply chain? ›
With total visibility comes greater access to data, which allows you to develop more customer- and product-specific information. This can improve all facets of a company, including planning, reducing and avoiding costs, and increasing efficiency and customer service operations.What are the benefits of process visibility? ›
- Increased process productivity. ...
- Improved production planning capacity. ...
- Integration of information sources for the whole organisation. ...
- Reduced operating costs. ...
- Better positioning for continuous improvement.
- Leverage Social Listening to Know Where You Stand. ...
- Foster Community on Social with Regular Interaction. ...
- Use Employee Advocacy to Boost Your Brand. ...
- Focus on Video Content for a Dynamic Feed. ...
- Work with Influencers. ...
- Run Contests or Giveaways. ...
- Implement a Referral Program.
Leverage social media
Social media is a powerful tool to increase your product's visibility and engagement. You need to choose the right platforms, create a consistent brand voice, and share valuable and relevant content. You need to use hashtags, mentions, tags, and stories to expand your reach and visibility.