The Importance of Real-Time Supply Chain Visibility

Supply chain visibility is important because all organizations run on data. Read more about supply chain visibility in this article.

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    Supply chain visibility (SCV) offers a clear, end-to-end view of the entire supply chain – and the many different systems, stakeholders, processes, and variables with any connection to that chain.

    Having that big-picture view enables orgs to ID and fix process inefficiencies and tackle vulnerabilities like stockouts or fulfillment issues before they turn into bigger problems with much higher costs.

    That said, SCV is essentially about building a “single source of truth.” It’s just that in this context, you’ll need to look beyond your organization and its customers. And – instead, focus on connecting every link in your supply chain.

    In this article, we explain why supply chain visibility is the first major step toward transforming the supply chain – and everything else.

    What is Supply Chain Visibility?

    Traditionally, supply chain visibility describes the ability to track various materials, products, or parts from the original manufacturer to their final destination. 

    But – ultimately,  supply chain visibility is about transparency and understanding. Initially, that might mean creating a unified data ecosystem that operates on a common data model, automatically syncs data across the entire network, and serves up real-time insights – in context – to all users.

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    According to BSI’s 2023 Supply Chain Risk Insights Report, that level of understanding begins with self-knowledge. In it, Marianna Sanford, Intelligence Analyst for Connect SCREEN, BSI, explains that overcoming uncertain conditions and complex challenges starts with getting to know the ins and outs of your supply chain.  

    Internally, she says, that means gaining a deeper understanding of all supply chain operations and the tools used to manage them. So, you’ll need accurate, real-time insights for high-speed decision-making, surfacing unexpected patterns, improving process efficiencies, and slashing costs. 

    But, Sanford says, self-knowledge is also about looking outward and learning more about your environment and the external forces that shape it. Meaning, you’ll need to understand how supply chains are adapting to change and why, so you can then address the risks that threaten to undermine your supply chains. Think — cyber attacks, non-compliance, theft, etc. 

    She also noted that achieving both forms of visibility might involve investments in IoT, AI, predictive analytics, cloud computing, or security. 

    Of course, any investments you make should be informed by your specific situation – the data you already have, the information you’re missing, regulatory requirements, goals, and so on.

    Basically, you’re trying to build this layered ecosystem that covers every data point, device, asset, and end point. That, in turn, lays the foundation for a supply chain-centric data management strategy, which then allows you to systematically drive whatever outcomes matter most to your business. 

    Why is Supply Chain Visibility So Important?

    Supply chain visibility is important because all organizations run on data. If supply chains are involved in any part of your core business operations, supply chain data must factor into every decision you make. 

    According to McKinsey, end-to-end visibility allows orgs to create modern “supply chain nerve centers” that unify functional silos and enable orgs to get ahead of “shocks” and disruptions just over the horizon. 

    Companies can then take steps to strengthen and optimize supply chain operations. 

    For example, making insights available and actionable for all stakeholders can facilitate more efficient collaboration. Streamlined collaboration might then accelerate decision-making and innovation, delivering better outcomes for customers, partners, employees, and the bottom line. 

    In these next few sections, we’ll look at six key ways supply chain visibility can help you reach business-critical goals:

    1. Build Resilience

    Supply chain visibility allows you to build the resilience and agility you need to weather future disruptions. 

    We won’t rehash all of the details here, but last year, Velosio helped Veseris transition away from their legacy IT system after separating from their parent company, Univar.The company had just 18 months to ID solutions, build a new stack, and figure out how, exactly, to run all finance, sales, and supply chain processes on that new system. 

    During that time, we worked closely with the Veseris team, helping them build a brand-new stack in the cloud — with D365 Finance, Supply Chain Management, and CE joining forces to form a strong, digital foundation.

    We also used ISV apps to augment D365’s built-in capabilities — adding advanced credit card processing, EDI, and OCR invoice processing features to that main stack.

    We also helped them get started with Power BI for analytics and reporting — a total game-changer on the SCV front. According to CIO Nawaz Shaik, the company has more visibility than ever. 

    They can see what’s happening with their supply chain in real time — down to each individual variable or data point. They can see who’s working in a specific warehouse, what’s on the shelves, track project statuses, and pinpoint the location of every vehicle in their fleet. 

    What’s more, Shaik says, is that users can do all of this remotely. All they need is a laptop and a WiFi connection. That means, finance teams can work from anywhere without losing the valuable data or functionality they’d get in the office. 

    Visibility also goes a long way when it comes to effective contingency planning. For example, you can take steps toward building a more resilient supply chain by identifying vulnerabilities among tier 1 suppliers. 

    If critical partners are located in areas disproportionately impacted by hurricanes, wildfires, or war, it’s a good idea to start looking for alternative suppliers before disaster strikes so you can avoid future disruptions.

    2. Understand & Support Customers

    It’s old news at this point, but everything always comes back to the customer. Most of us already know that products, processes, and services should always be informed by customer needs, pain points, and preferences. 

    But – when you’re dealing in physical goods, there’s more to consider than messaging or functionality. 

    Customers want the best quality products at the best price point. They also expect those products to arrive ASAP – and, they expect brands to provide detailed, real-time tracking information. 

    Supply chain visibility helps business leaders understand what customers want, as well as how they feel about existing products and the overall experience. They can also pinpoint what’s working, or not, and quickly make changes to better align with consumers. 

    Beyond that, this data can be used to improve self-service options and provide more transparency into order status and arrival times. 

    3. Drive Operational Efficiencies

    Supply chain efficiency impacts everything from operating costs to profit margins. SCV gives you an overview of all activities, processes, and variables that actively support the supply chain –  along with the ones that might possibly influence SC outcomes in the most tangential capacity. 

    Basically, you’re getting a complete picture of the entire supply chain and everything it touches. That means, you can monitor performance on a holistic level – and zoom in on any red flags or anomalies to find the root cause of any given problem. 

    Long-term, that data can be used to improve AI, ML, and automation capabilities. So, eventually, algorithms will learn to find and fix supply chain issues on their own – or pass them on to their  human colleagues if the situation calls for more nuance.

    4. Monitor & Control Costs

    Monitoring and controlling costs is a key cornerstone of any supply chain management strategy. We say this often, but cost visibility is vitally important because everything links back to the bottom line. 

    See, in order to make decisions that drive profitability and efficiency under volatile, uncertain conditions, businesses need a clear picture of all costs associated with SC operations.

    That includes freight, logistics, and landed costs, inventory and procurement data, asset performance insights, operating expenses, as well as all of the individual players and processes with any connection to the supply chain.

    Establishing end-to-end visibility helps orgs control costs, even as conditions become increasingly complex and unpredictable.  

    It allows them to track company spending, run cost-benefit analyses, and manage things like quotes, invoices, sales orders, contract terms, and other variables that determine how much cash is coming in and out each month. 

    It also lets them pinpoint and pull the individual “levers” that stand to deliver the greatest impact on their overall financial performance. 

    If you’re using D365 SCM, the Inventory Visibility add-in enables smarter decisions about fulfillment and replenishment. The platform includes a visual dashboard that makes it easy to track inventory status – on-hand, in-transit, ordered, etc. – at a glance.

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    This allows you to detect the early signs of under- or over-stocking issues, giving you the opportunity to course-correct in near real time. And, it can help you avoid situations where you’re aggressively discounting products to clear up storage space — which can damage your reputation and cause major financial losses.

    Another area you might focus on is freight and logistics. Tracking transportation costs can help you understand how much you’re spending on shipping, logistics, and delivering freight. 

    So, you might monitor outgoing shipments by fulfillment center and carrier. In that case, you might look for opportunities to cut costs by using different carriers in different regions to get the best rate. 

    Or – you might reroute incoming orders to different warehouses to lower fuel costs or unlock discounts by bundling orders.

    5. Mitigate Risk 

    Poor supply chain visibility is a serious risk in and of itself, it exposes your business (and your customers, employees, suppliers, and partners) to a full spectrum of threats — both known and unknown.

    You need a complete and accurate view of the supply chain in order to respond to disruption, plan for the future, and take immediate action when said plans need to change. 

    According to a 2020 HBR piece, once you’ve achieved end-to-end visibility, you can leverage technologies like AI and automation as an early warning system. 

    For example, when COVID first hit, demand for critical medical supplies, medications, toilet paper, and PPE soared, putting health care providers and patients in a precarious position. 

    Over time, though, hospitals began leveraging real-time surveillance and automation capabilities to track the virus’s movement through local communities to better coordinate responses, predict surges in demand, and allocate resources to the areas with the greatest need. 

    In a retail setting, solutions like Dynamics 365 Intelligent Order Management can be used to predict risk and improve visibility, allowing users to orchestrate seamless customer journeys and gain more control over omnichannel operations. 

    Visibility also allows you to protect against cyber attacks by offering a comprehensive view of your entire supply chain. That way, you can identify and fix vulnerabilities before hackers can exploit them. 

    You can prevent internal threats by monitoring user activity and implementing safeguards like identity and access management (IAM), securing admin paths, and educating employees. 

    Final Thoughts

    If there’s one “ big takeaway” here it’s this: supply chain visibility matters because data matters. 

    All companies use data to make decisions, inform strategies, and anticipate customer needs. 

    However, if your business value hinges on the movement of physical inventory – raw materials, parts, finished products, whatever —  even in the most tangential capacity, you start thinking seriously about SCV. 

    Velosio works with distributors and manufacturers of all sizes and sectors – leveraging the entire Microsoft ecosystem to unlock end-to-end visibility and the many benefits of moving supply chain operations into one, cloud-based system. 

    Whether that means D365 Business Central, D365 Finance & Supply Chain Management, or a “custom stack” built on either core platform, our SCM experts will be there to guide the process to ensure you get the right results.

    Contact us today to learn more about our supply chain practice, solutions, and services.