Enhancing Supply Chain Visibility….and Transparency

Many companies still struggle with inefficiencies and delays due to the lack of real-time visibility, transparency and information sharing across the supply chain. While there may be some technological solutions to help, there also may be some underlying fundamental human nature issues that technology just can’t solve. 

Supply chain visibility refers to the ability to monitor and track products, materials, and information as they flow through various stages of the supply chain, from raw material sourcing to final product delivery. Real-time visibility allows stakeholders to identify potential bottlenecks, predict disruptions, and make data-driven decisions promptly. 

Here's why supply chain visibility and transparency are crucial:

Proactive Decision Making. Real-time visibility provides supply chain managers with actionable data to proactively address potential issues before they escalate into significant problems. With access to comprehensive information, they can quickly re-route shipments, adjust production schedules, create workarounds, or find alternative suppliers to prevent delays.

Enhanced Collaboration. Visibility promotes collaboration among different stakeholders within the supply chain, including manufacturers, distributors, logistics providers, and customers. Transparent information sharing enhances communication, fosters trust and allows for overall smoother intercompany operations.

Inventory Optimization. Lack of visibility often leads to inaccurate inventory management, causing either excess stock or stockouts or production shutdowns. Real-time visibility allows for better inventory tracking, ensuring optimal stock levels. 

Customer Satisfaction. On-time deliveries and accurate order information are critical for end customer satisfaction. Supply chain visibility enables businesses to provide accurate shipment updates to customers, allowing them to better plan their business operations. 

Risk Mitigation. The ability to anticipate supply chain disruptions helps companies mitigate risks effectively. Whether it's natural disasters, geopolitical tensions, data breaches or supplier issues, real-time visibility empowers businesses to develop contingency plans.

Despite its significance, many companies still face challenges related to supply chain visibility and transparency. Some of those challenges can be mitigated through the use of technologies such as the digitization of manual processes, adopting blockchain, incorporating IoT, the use of cloud-based collaboration platforms, and the integration of AI and predictive analytics. 

But for many companies, even those larger ones incorporating bleeding edge supply chain technologies, some supply chain transparency and visibility issues may be rooted in basic human nature. 

There are opposite polarities when it comes to transparent supply chains. On one side, for example, the farm to table movement that uses supply chain transparency as a competitive advantage and marketing strategy. In that business segment direct relationships with suppliers are critical and raw materials are traced back to the field, ranch, and boat. The supply chain is an active and proud contributor. And cost is usually not an issue. Their customers will pay for supply chain transparency. 

One the other side, there are companies that will not identify their suppliers. These are often highly cost driven companies in a competitive market where every supplier relationship is crucial to their success. They may also be trying to hide their supply chains because of the maladies common in some low-cost country sourcing relationships. Unlike the farm to table example, those customers who demand supply chain transparency in this environment may not be willing to pay more for products from factories that do not meet their supply chain visibility criteria. 

These two examples are from opposite ends of the spectrum. As a professional customer I can say that my suppliers were quite hesitant to identify members of their supply chains unless they could assign blame for late deliveries or price increases.  

While some supplier relationships may be obvious, such as a franchised distributor buying and reselling from a manufacturer, other sources were often not divulged for fear of customer interference, gaining direct relationships by eliminating the primary supplier, or even worse, learning the cost structure and profit margins of the purchase. Protecting confidential pricing information is often the driver in purposefully maintaining opaque supply chains. 

A push for greater supply chain visibility and transparency throughout the tiers presents a contradictory situation for many prime suppliers.  They understand the importance of a synchronized end-to-end supply chain for their customers, but also fear a loss of control and influence by providing it. 

But there is a middle ground; one based on strong relationships, trust, and clear communication. It is also buyer dependent. Those dealing in a low cost and all cost environments cannot expect very much supply chain transparency. But those buyers working in a more rational marketplace, perhaps integrating some level of ethical sourcing in their procurement activities, will most likely have a clearer window into the extended supply chain.