What is supply chain visibility (SCV)?
Supply chain visibility (SCV) is the ability of parts, components or products in transit to be tracked from manufacturer to final destination.
The goal of SCV is to improve and strengthen the supply chain by making data readily available to all stakeholders, including the customer.
Supply chain visibility software
SCV is typically a part of the enterprise resource planning (ERP) system. However, SCV has recently become even more integral as companies have increased the outsourcing of supply chain planning and, therefore, lost some visibility and control over it.
SCV, empowered by supply chain management technology, improves these issues by delivering real-time logistics data and insights into various aspects of the supply chain.
So, for example, through this technology, a company might review metrics that indicate impending supply chain shortages before they become severe and find ways to adapt, remove bottlenecks, or reposition to meet goals, compliance requirements, and delivery obligations.
Aspects of supply chain visibility data
Increasing supply chain visibility through data encompasses a variety of data collection activities. The following are some of the common data collected in SCV:
- Order status. Real-time visibility of cargo movement through the supply chain ensures operational efficiency, as the company knows when to expect the delivery of goods from the distributors.
- Auditing records. This includes various compliance and regulatory information throughout the supply chain. This is critical for ensuring that business processes are conducted lawfully.
- Shipping details. This includes real-time data on the shipment of goods. Through SCV software, this can be shared by all the relevant stakeholders at once.
Why is supply chain visibility important?
Some of the expected benefits of supply chain visibility include the following:
- Measurable KPIs. As a result of globalization, supply chains have become highly complicated. Monitoring the supply chain in real time with relevant key performance indicators (KPIs) can help avoid last-minute logistical disruptions that affect profit margins.
- Competitive advantage. Relevant data on traceability of product orders can serve as a substantial competitive advantage. The data allows a company to know precisely when materials need to be ordered, when to contact the suppliers and when the customer's product will be delivered.
- Forecasting. The real-time data of the entire supply chain ensures that supply and delivery times for a product are adequately forecasted. This helps improve business operations, tracking raw materials, decision-making and delivery of information to the customers.
- Customer satisfaction. Through inventory management, SCV helps maximize customer satisfaction by quickly meeting customer demand.
- Compliance. Global supply chains are subject to many compliance obligations related to procurement, distribution and taxation on the goods. As a business owner, it's essential to monitor the movement of goods through the supply chain and ensure they are being handled in a compliant way.
This was last updated in March 2022
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FAQs
What is supply chain visibility and why is it important? ›
Supply chain visibility (SCV) is the ability to track individual components, sub-assemblies and final products as they travel from supplier to manufacturer to consumer. The scope — for example, are raw materials included, and will the item be tracked with forwards and backwards tracing — depends on the product.
What means supply chain visibility? ›Supply chain visibility is the ability to view or track inventory as it moves through the supply chain. Real-time supply chain visibility is the complete, end-to-end view of a company's logistics, inventory and warehouse management processes and people in real time.
What is supply chain visibility quizlet? ›Supply Chain visibility. The ability to view all areas up and down the supply chain in real time. Supply Chain planning system. uses advances mathematical algorithms to improve the flow and efficiency of the supply chain while reducing inventory.
How do you achieve supply chain visibility? ›- 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.
Having visibility is one indicator that the processes put into place by the management team are followed by the rest of the team. Companies are optimized for better performance if management has high and full visibility in the organization. High visibility generally means they are confident in their projections.
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.
Why is supply chain visibility a challenge? ›The bottom line is, companies of all sizes struggle with a host of supply chain visibility challenges, such as: Disparate management systems and siloed teams. Lack of real-time data on supply chain operations. Poor communication between supply chain stakeholders.
What are the visibility challenges in supply chain? ›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.
How many companies have supply chain visibility? ›However, according to research by Zippia, this year, only 6% of companies report full visibility on their supply chain while 69% of companies don't have total visibility. Many organizations consider it impossible to understand exactly what's going on at all levels of their supply chains.
What is the importance of supply chain visibility quizlet? ›Supply chain visibility involves a major trading partner to connect any part of a company's supply chain to access data in real time on inventory levels, shipment status and similar key information. This type of information sharing allows companies to prepare for future actions of their trading partners.
What causes poor supply chain visibility? ›
- Disparate management systems and siloed teams.
- Lack of real-time data on supply chain operations.
- Poor communication between supply chain stakeholders.
- Unauthorized subcontracting and/or raw material sourcing.
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.