Supply chain management is unique among management positions because only part of it takes place within the manager’s company. Most of the work happens outside the company. Effective supply chain management requires developing and maintaining fruitful relationships with raw materials providers, manufacturers, and customers throughout the network.
When it comes to improving your supply chain operations, some of that work can take place within your company. You can monitor the performance of your vendors and adjust prices, or negotiate contracts with new suppliers when necessary. You can also standardize your tools and processes so that multiple employees in multiple locations can take on day-to-day duties.
But like the supply chain itself, the most important work of improving the global supply chain takes place outside your company. This is supply chain visibility.
Supply chain visibility is a metric that examines how well materials, components, or finished products can be tracked as they move through the supply chain. Ideally, supply chain visibility data is available to every member of the supply chain, including logistics providers and customers who purchase completed products.
Improving end-to-end visibility with a data-driven approach is an important step in better logistics management. It allows managers to better understand how much inventory they have and need, which allows them to control costs. It gives customers insight into the manufacturing process; greater transparency typically leads to stronger relationships with customers. And overall, more visibility leads to better supply chain management at every stage of production.
Supply chain management is in the midst of an industry-wide evolution. Companies that are ahead of the curve have made strategic investments in global supply chain visibility, which allows them to identify problems at every stage and come up with system-wide solutions. But those that lag behind are becoming more and more inefficient.
What you can do to improve supply chain visibility
Use a common platform
Everyone in your supply chain should be connected. Rather than going up to the supply chain manager and back out to partners, partners should be able to talk to each other: The manufacturer should know how much inventory is in the warehouse; the shipping carrier should know when customer orders arrive and raw materials procurement partners should respond to factory needs.
Enterprise Record Planning (ERP) software with supply chain management functionality can support this kind of crosstalk. For example, you can program ERP systems to track inventory levels and place orders with vendors when they fall below a certain level.
Supply chain visibility needs can vary greatly from one industry to another. A manufacturer who outsources contracts may benefit from visibility into the work of those factories, noting interruptions that could slow component delivery. For manufacturers of finished goods, insight into raw materials or component production facility offers the opportunity to warn customers when products might be delayed. But every party benefits from having more information about one another.
Know — and standardize — your data
It’s difficult, if not impossible, to compare metrics when they aren’t in comparable formats. Warehouse, inventory, and shipping metrics should all be able to speak to one another. For example, knowing the total cost per square foot for all your logistics facilities can help you plan your shipping network. Understanding labor costs across the supply chain can help you negotiate new contracts. And tracking packaging and shipping supplies at each step of production can empower you to place bulk custom orders, saving money on those materials.
Understand and interpret your real-time data to drive efficient decision-making
Data is only useful if you put it to work. As you begin to gather detailed information about your supply chain management, consult with an expert partner who can help you understand what it means and how you could renegotiate contracts or reconfigure certain elements of your supply chain to increase efficiency.
Additional steps to enhance your supply chain
As you work to make your global supply chain more visible, you can also adopt additional strategies to make your supply chain management more effective.
First, continue to invest in employee development. The need for global supply chain professionals is only going to grow in the coming years, as logistics capabilities expand and the global economy gets more and more connected. Support your team as they pursue training and professional development opportunities.
Second, encourage your partners to utilize up-to-date technology in their own practices. Everyone from raw materials suppliers to parcel delivery companies can benefit from analytics and tracking software.
Finally, make marketing and operations part of your supply chain management conversations. Explore the ways that these parts of the business can support each other — and check in regularly to find out if you’re moving in the right direction.
A strong supply chain management strategy means greater efficiency, optimized movement of products, minimized delays and a competitive advantage for your business. It means greater cost savings as you maximize each dollar. It helps your company manage risk, leverage greater transparency to improve customer service, and grow your output — and your profits.