Supply chain visibility tools and why they're important

Sep 20, 2021
Supply Chain
Innovation

Supply Chain Visibility Challenges

Having visibility across a supply chain means knowing what’s happening at any stage across it. The reality is that this is very difficult to achieve, as supply chains are complex, with lots of moving parts at any one time, relying on ecosystems made up of many partners, often using different tools and systems.

The value of supply chain visibility is not always fully understood or appreciated until something goes wrong and it’s really needed. Supply chain disruptions range from extreme weather, to natural disasters, damaged factories, political interference and trade wars, pandemics, canal blockages, and more. And while visibility can’t prevent these events from happening, it’s clear that a lack of visibility makes dealing with such crises much more difficult.

Organizations don’t always have data on where their suppliers and sub suppliers are based and can be unaware of the potential impact of a shortage of even just one small component. For an example, you only need to look at the many industries currently experiencing a shortage of semiconductors and other electronic components. Although entire industries can be affected by shortages, those organizations with better visibility across their supply chains will be more empowered to make agile decisions and often fare better than those with less sophisticated tools and capabilities.

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What is Supply Chain Visibility?

Supply chain visibility is quite simply the ability to track and view, at any point in time, the status of raw materials, components or finished products, wherever they are throughout a supply chain. This helps organizations better monitor supply chain flows from suppliers and manufacturers through the organization’s own manufacturing facilities (or retail distribution network) down through to customers. It also helps product teams to identify and fix weaknesses within a supply chain, including inventory shortages or issues fulfilling orders, before they become bigger problems. Types of data that an organization would likely want visibility over often include receipt of orders by suppliers, the status of inbound raw materials, status of suppliers’ manufacturing processes, delivery and shipping details, customer information and real-time order status.

Why are Supply Chain Visibility tools important?

There are a number of areas of benefit that supply chain visibility tools can offer:

  1. Greater visibility of their shipments and deliveries for end customers
    As consumers have come to expect live updates for their deliveries, so too has it become expected in the B2B realm. However, B2B supply chains are far more complex and fragmented, which makes deliveries more difficult to monitor. Visibility blindspots exist, where shipment status is unknown for days or even weeks and delivery delays go unnoticed until a customer actually complains, damaging the brand and potentially resulting in penalties. This also results in more calls for customer service teams, when their time could be better spent on adding greater value for the organization.
  1. Better measurement and improvement of delivery performance
    Visibility gaps within supply chains stop valuable insight from reaching management. Many companies rely on manual reporting, pulled from siloed computer systems and sometimes paper forms. This type of approach can lead to inaccuracies, a lack of objective information and takes longer to collect. This impacts an organization's ability to measure OTIF and other metrics accurately and in a timely manner, particularly for subcontracted carriers. This in turn hinders a company’s ability to optimize processes and avoid costs associated with inefficiency or late penalties.
  1. Improved handling of transport-related disputes
    When deliveries don’t go to plan, disputes, or even litigations, can arise. By using paper CMRs (Bill of Ladings) forms, the time taken for operations teams to receive this information is increased considerably, and often lacks enough detail to aid in performance and root-cause analysis. Paper forms also require physical storage. Digitalizing this process makes the accurate generation, faster receipt and digital storage of these documents possible, saving transport dispatchers a lot of time.
  1. Enhanced operational efficiency and productivity
    Without visibility, operational inefficiencies are more likely to occur within the supply chain, particularly at delivery sites. A lot of communication between carriers and shippers tends to happen over email, phone and even fax, which makes it time consuming for transport teams to verify when deliveries are completed. This time could be better spent on actually analyzing operations to determine where things are going wrong, so improvements can be made. A lack of knowledge in advance around delays or early arrivals, loading and unloading at docks are less efficiently managed, potentially resulting in longer dwell times for trucks and their associated costs.
  1. Greater supply chain resilience and agility to mitigate impacts from unexpected events
    A lack of real-time supply chain performance data and insights affects decision making confidence. End-to-end supply chain visibility increases organizational agility by aiding leaders in making more confident decisions leveraging real-time operational data and actionable predictive insights. The flexibility of API (Application Programming Interface) integrations used by real-time visibility platforms makes this possible. By leveraging these new technologies, organizations can both eliminate unnecessary executional layer costs and increase flexibility and agility throughout supply chains. This helps organizations cope with disruptions better, gain a competitive advantage and ultimately improves both customer experience and shareholder value.
  1. Reduced stock buffers and inventory optimization
    Changing consumer behaviors and appetites are forcing organizations to rethink their supply chain designs. With the explosion of e-commerce, a preference amongst consumers for same- or next-day delivery is growing. Inventory levels are being reduced and just-in-time approaches are being more heavily relied upon by manufacturers. In the FMCG sector, customers are increasingly opting to spend more on fresh organic produce, free from artificial preservatives, which have shorter shelf lives, requiring more frequent, local deliveries of stock. More regular deliveries mean stockists can reduce inventory on hand, and instead take up more space to display products.

Across all of these areas of benefit, there are also cost savings, reduced risk, improvements in trust, transparency and accountability, and ultimately improved service levels which make for happier, more loyal customers.

What are the main types of supply chain visibility tools?

These days, successful supply chain orchestration relies on supply chain managers having access to real-time data, shared amongst supply chain network partners, via a centralized hub, or control tower, capable of analyzing performance to allow optimizations to be made on the fly. The comprehensive data on product demand, sales forecasts, availability of materials or components to name a few, makes the tool a valuable resource for supply chain management.

Supply chain visibility tools that are used for supply chain management tend to help address the following categories:

  • Customer Demand - A business-planning process that enables sales teams to develop demand forecasts as input to service-planning processes, production, inventory planning and revenue planning.
  • Inventory Control - The process of keeping the right amount of raw materials or number of parts and products in stock to avoid shortages, overstocks, and other costly problems.
  • Warehouse Management - To support and optimize warehouse functionality and distribution center management.
  • Fleet/Transport Management - The overall actions that take place to keep a fleet running efficiently, on time, and within budget, while identifying ways to ensure compliance, improve efficiency, and reduce costs.

There are a number of types of tools that have been designed to improve supply chain management and visibility across these areas, including order and inventory management systems, transport, warehouse and yard management systems. One of the most critical capabilities that can supplement all of these tools is real-time transportation visibility. In fact, the ROI from implementing many of these other tools can only be truly maximized when paired with a real-time transportation visibility solution. For example, real-time insights on the status and position of goods moving through the value chain can help sales and operations planning teams better plan promotions in retail. Customer service teams can provide a higher level of service when handling customer inquiries - or even avoid inquiries in the first place - with automated customer delivery notifications.

The importance of real-time supply chain transportation visibility tools

Implementing real-time transportation visibility is especially important alongside transport management solutions. The main reason concerns fine-tuning and maximizing performance. Real-time transportation visibility platforms leverage sophisticated machine learning algorithms to process vast amounts of data, in real-time, to produce actionable, predictive insights. Predictions and estimates can be compared with objective real-time data, enabling unequivocal root cause analysis to be conducted. This analysis can uncover the ‘gaps’ or areas within transport operations that need attention, and in turn what adjustments to make within the transport management system (TMS) accordingly so that ROI can be maximized.

Real-time transportation visibility bridges the gap between the core functionalities of a TMS, which are largely focused on pre and post shipment activities, with data derived from transport execution itself. This real-time information about delivery status, key events and ETA predictions, flow back into the TMS, avoiding double or manual entries and helping to reconcile shipment transport data with that of other operations and processes involved before and after a shipment.

For example, during the pre-shipment phase, objective real-time transportation visibility data tracking things like carrier performance, dwell times, ETAs and delays can be used to improve optimization and planning. Likewise, after a shipment, real-time transportation visibility data improves the granularity and reliability of reporting and cuts administrative burdens by doing things like speeding up invoicing processes. This data also helps to both reduce disputes and speed up dispute resolution between shippers, carriers and receivers thanks to readily available timestamped delivery data. Finally, throughout all phases of shipment, real-time transportation visibility helps boost collaboration between all supply chain partners, providing a single platform ‘control tower’ tool for monitoring goods and coordinating activities throughout the value chain.

Diagram: How real-time transportation visibility (RTTV) bridges the gap between core transport management system (TMS) functionalities.


Achieving true end-to-end supply chain visibility with tools

The end goal for supply chain management when it comes to digitization is ultimately full ‘end-to-end’ visibility of supply chain operations. The reality is that without the real-time transportation visibility component, a TMS implementation cannot achieve this since it cannot provide real-time or predictive information about shipments in transit. When TMS and real-time transportation visibility solutions are combined, the capabilities of each system increase by order of magnitude. By relying on a carrier’s TMS, tracking data quality will always be more accurate, as carriers tend to run their daily operations directly via their TMS. These daily operations include, for example, the pairing of vehicles with their transportation orders, the advanced planning of milk runs and requirements for cross docks without the need for a dispatcher to perform anything manually.

The contextual information relating to each shipment extracted from a TMS allows real-time transportation visibility to produce more accurate and reliable ETAs and helps to generate powerful insights into transport network performance. Shippeo’s TMS partnerships make it possible to combine TMS offerings with our real-time visibility capabilities, producing an all-in-one solution for shippers. From transport planning, to execution and real-time visibility, these partnerships offer a unique approach to streamlining processes. In addition, real-time KPIs encourage excellence in execution and facilitate better analysis of operations by Exception Management. It also offers TMS users market-leading estimated time of arrival (ETA) accuracy and reliability thanks to our sophisticated proprietary algorithm.

Shippeo is currently integrated with over 200 TMSes, many used extensively throughout Europe. Shippeo’s integrations team are experts in integrating any TMS quickly, easily and most importantly at scale. This is crucial for onboarding large carrier fleets, across multiple regions or continents. This ability to connect with TMSes rapidly has allowed us to quickly grow our network, which comprises over 140,000 carriers linked to our 100+ customers. Once a TMS connection is created, it makes onboarding new customers who use the same systems lightning quick, speeding up the availability of valuable predictive data to shippers sooner.

Gartner ranked real-time transportation visibility as the most important supply chain investment in its 2019 Market Guide for Real-Time Visibility Providers and when you consider all the capabilities it brings to a TMS it’s easy to understand why. By 2023, Gartner predicts 50% of global product-centric enterprises will have invested in real-time transportation visibility platforms. With our extensive experience in TMS integrations, get in touch with our expert team to discuss how easily real-time transportation visibility can be combined into your TMS implementation or find out more about the importance of TMS integrations in our visibility guide 'Choosing the right transportation visibility provider'.

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