In this day and age, because we’re heavily connected via the Internet and social media, we are fully aware of more issues in the world than we were 30 years ago. This extends to the economy; businesses are becoming more diligent in identifying and addressing problems in their operations.
However, it can be challenging for businesses to monitor their supply chain and logistics effectively. This is because the entire supply chain can be complex, comprising various moving parts such as people, goods, assets, and tools. To better respond to issues within the supply chain, businesses are leveraging a vital skill: supply chain visibility.
Supply chain visibility aims to identify potential or ongoing issues affecting logistics and supply chain operations. By analyzing data from various sources, including external factors such as weather and market trends, businesses can identify opportunities for improvement, implement necessary changes, and reduce costs.
Companies can gain many insights by having a comprehensive view of their supply chain. Let’s explore six of these insights to understand the benefits of supply chain visibility.
Insight #1: Find Problems, Prevent Delays and Issues.
Like we said, supply chain visibility is used primarily to spot issues within your supply chain. These problems can range from delays in procuring raw materials to areas experiencing understaffing. If companies lacked supply chain visibility, they would be unaware of their supply chain’s status and be unable to respond quickly to issues as they escalate.
To improve your problem-finding skills, it’s advisable to examine the global supply chain. This supply chain is constantly changing due to volatile markets, new technologies, and unstable geopolitical situations. By analyzing it closely, companies can swiftly prepare to protect their interests effectively and be prepared the next time a similar incident occurs.
Insight #2: Where are the Holes In Your Inventory?
Inventory levels can fluctuate depending on market demands and geopolitical issues. If your warehouses and storage facilities are understocked or overfilled, then you may face problems down the road when market conditions are not in your favor.
To prevent this, look for the blind spots in your inventory management. Are you ordering too many materials at once? Are you ordering too few? Are your suppliers’ lead times excessively long, or are they consistently delayed? Address these issues to fill in the gaps, and keep a continuous eye on your inventory– market demands can change at the drop of a hat.
Insight #3: When Your Relationship with Your Vendor Isn’t Working.
Vendors and suppliers are the crux of manufacturing a business’s products. However, just because they are essential for the raw and finished materials necessary for developing your goods, doesn’t mean you have to put up with underwhelming service from them.
Evaluating your vendor performance data can help identify both the strengths and weaknesses of your partners. For instance, you might find that some vendors are the exclusive suppliers of essential goods for your business. On the other hand, you may discover that certain vendors are underperforming or are more expensive than their competitors.
If you discover your vendors aren’t performing at the standard you expect them to, it may be time to reevaluate your relationship with them. You can either give them a second chance by establishing new metrics and KPIs to evaluate their performance, or you can terminate your relationship with them and seek out new suppliers who can deliver quality service and care.
Insight #4: What Are You Spending On?
Logistics is known for being one of the most expensive industries in the world, so it would make sense that a large portion of your business’s finances goes towards your supply chain. However, are you aware of what you’re spending on, exactly?
When companies review their supply chain and financial data, they often find that many expenses are unnecessary and do not contribute effectively to their operations. Simultaneously, they may discover areas within their supply chain that are underfunded and require additional financial support.
If you are in a similar situation, this may be a great time to cut down on costs in areas where the extra spending is not needed, and pour it into areas where it’s vital. Most importantly, however, it is crucial to establish metrics for tracking your spending and its connection to your supply chain. This practice can help reduce wasteful expenditures in the future and foster healthy growth.
Insight #5: Meeting Regulatory Compliance Every Time.
Some products, including those made with hazardous materials, are subject to stringent regulations, both domestically and internationally. They can be confusing and difficult to understand if you aren’t familiar with them, not to mention how frequently they change.
If you aren’t careful in following the laws, then it won’t just be a loss for your supply chain; you could also face reputational repercussions. This is why companies must be scrupulous and rigorous in researching and following these compliances.
Collaborative tools and software are the key to ensuring that compliance with regulations is met. By communicating with others within the supply chain process about keeping to international and domestic standards and keeping a record of any certificates and documents required, you can guarantee your business is up to snuff with regulatory compliance and avoid financial setbacks.
Insight #6: Are You Satisfying Your Customers?
A business selling products wouldn’t exist without customers purchasing its goods and services. With that said, it is possible to be out of touch with your customers after a period of successful profits. Times change, however, and so do consumer needs. To be a successful company, you must listen to customers and make changes according to their needs.
Customer-related metrics are essential for achieving effective supply chain visibility. Examples of these metrics include downstream visibility, product performance, and demand spikes. They illustrate the desirability of your product and how efficiently it reaches customers.
If you are not considering your customer-based metrics in making decisions for your supply chain, then you are putting yourself at a disadvantage against competitors. By considering these metrics, companies can make informed decisions regarding procurement, inventory, and distribution, ultimately benefiting their customers in the long run.
All of these insights are extremely helpful in enhancing production, solving problems before and as they happen, and making customers happy. Supply chain visibility is more than just being able to access real-time visualization of the ebbs and flows of your supply chain; it is a path towards improvement and efficiency for your logistics management and your entire operations.
Investing in visibility is essential for companies operating in a highly competitive and fast-paced economy. By understanding the benefits of this investment, you may be encouraged to move past the challenges of researching and gathering data and instead embrace the numerous opportunities that lie ahead. Only then will you see the bigger picture of your supply chain.
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