Supply chain visibility is one of the core operational efficiency determinants simply because of the data it delivers. The more you know about each transaction and each phase of custody, the more you can improve your entire supply chain.
Increasing supply chain visibility means shining a spotlight across channels, looking at the many variables affecting efficiency, transparency, and reliability. Gleaning data and using it to power change is a fundamental step in making sure the individual cogs powering the larger mechanism are well-oiled, so to speak.
Breaking down the supply chain
The first step in increasing supply chain visibility is identifying the unique aspects of your supply chain. Mapping its complete scope from start to finish with transaction points along the way is equivalent to building an outline for process improvements. Plotting potential chokepoints and various offshoots in your supply chain presents a top-down view of each opportunity for improvement.
Spotlight the variables
As you examine each part of your supply chain, list the governing factors that dictate it. This process is called master data analysis, and it’s instrumental in understanding what variables you control now and how best to control them moving forward.
Whether gathered through internal case studies, collected through an internet of things (IoT) network, or just noted via routine record keeping, data dictates better supply chain visibility. Supply chain managers need to know who, what, where, why, when, and how things are being done. When they have knowledge backed by quantifiable data, they can use it to drive insightful hypotheses and inform decision making.
A note about key performance indicators (KPIs)
Data in and of itself isn’t useful unless executives take it out of silos and aggregate it so they can see trends and patterns. More so, it requires benchmarking for norms and averages to see where deviations — positive and negative — occur. Setting KPIs based on the data, then looking at how the data stacks up can yield wide-ranging insights.
Supply chain leaders can and should set KPIs regarding any essential data they’re trying to examine, such as average warehousing time, average cost per shipment, or the rate of error per number of inventoried parts picked. Supply chain managers can determine what KPIs are important by either working backward from a goal or through data to reach one.
For example, if you know you want to decrease warehousing time, you can work backward from inventory data. If you’re not sure about the efficiency of your average shipping cost, examining data can allow you to set KPIs against future operations.
Deploying the data
As the focus narrows from the overall supply chain to specific chokepoints then to granular data surrounding a single process, visibility sharpens. Using that data to address processes and variables is what drives improvements and allows for even more visibility within the supply chain.
For example, you might use data to determine better shipping logistics from your warehouse to a distributor. This may result in everything from fewer less-than-load (LTL) shipments to eliminating deadhead runs, saving logistics leaders money at multiple single points in their supply chains. Data makes the problems visible, and discerning supply chain managers can then use that data to explore targeted solutions.
Data deployment goes beyond just implementing drastic changes. In many cases, logistics leaders use it to make marginal improvements that have rippling effects across later stages of the supply chain. Examples may include:
- Increasing the logistical efficiency of freight transport across different supply chain zones
- Predicting supply and demand trends that improve staffing and scheduling across different chokepoints
- Eliminating redundancies that may slow down specific segments of the supply chain and prevent future bureaucracies from arising
- Reducing errors, loss, and accidents that occur within the chain of custody to improve the balance sheet
How supply chain managers use data and the specific issues they choose to illuminate will dictate how their supply chains flourish. Independent of this, however, any effort to shed light on supply chain operations can result in increased visibility: a benefit for companies, customers, and other stakeholders alike..
Looking to gain more control and visibility into your supply chain? Next Generation Logistics Inc. experts can tailor inbound and outbound supply chain solutions to your specific needs. To learn more about our innovative logistics technology offerings, contact us online, or give us a call at 847-963-0007