What is supply chain visibility and why is it important? (2024)

FAQs

What is supply chain visibility and why is it important? ›

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.

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.

Visibility into transportation and logistics enables companies to optimize routes, reduce costs, and improve delivery times. By identifying inefficiencies and streamlining operations, businesses can enhance productivity and reduce overall costs, thereby increasing profitability.

Supply Chain Visibility Benefits

Track goods in near real time: When supply chain teams have a detailed, up-to-date view of their entire product lifecycle, and tools such as AI to help them analyze the data, they can make better decisions that improve the flow of goods through their network.

End-to-end supply chain visibility provides a competitive advantage because it allows you to serve your customers better. Some benefits to expect include: Greater inventory control. Better customer experience and satisfaction.

The 4 key elements to achieve high supply chain visibility include a single source of truth for the operational data, immediate alerts to identify supply issues, historical data to facilitate improvement & forecast, and simulation of alternative plans to see the next best actions.

The impact of your hard work also needs to be visible to others. Workplace visibility is vital to getting your name mentioned in the room where decisions are made, being included in career-shaping projects, and eventually, landing a promotion.

By gaining full visibility, you can improve command over inventory and, on top of that, reduce the credit cycle by knowing when shipments change custody.

Visibility is also important and can be productive in identifying problems before they erupt into larger issues. Problems surfaced as part of a walk-thru, department visit, casual conversation or simply “being there” can be addressed proactively before they reach a level of crisis or escalated concern.

What is an example of supply chain visibility? ›

Supply chain visibility works on two levels: low and high visibility environments. For example, in a logistics providing company, one generally plans for shipment. But sometimes a power disruption at the client's factory might cause a delay in their shipment, affecting the logistics company.

Visibility in every tier of the supply chain has many benefits. These include: Lowered risk through increased knowledge of potential disruptions. Increased communication across tiers, which allows for rapid responses to changes or problems.

Real-time visibility improves the tracking and tracing of shipments across different modes of transportation and geographies. It helps companies plan and forecast, allowing them to adapt instantly to changes and prevent unexpected situations.

With improved visibility, you have the ability to: Optimize stock levels across your network. Save on logistics costs to offset the cost of shipping or any promotional incentives like free shipping. Calculate safety stock to avoid stockouts.