Why transparency in Supply Chain should be your top priority
October 17, 2018
More and more supply chains are utilizing cutting edge strategies and technology to increase their supply chain transparency. As well as, other external factors such as pressure from consumers, continue to mount. You cannot afford to lose visibility and be left behind. It will cost in more ways than one.
Without visibility, we see the silo mentality, which is extremely dangerous for a modern supply chain. Synchronization amongst different facets boosts success and efficiency, yet without visibility, it is impossible. To make synchronization possible you need to enable everyone within the entire system to see what is truly going on elsewhere, allowing them to adjust and flex according to the various needs and demands. With visibility, you also open up greater opportunities for competitive advantage.
So how do you do this? It comes down to a number of factors. Culturally, there needs to be an attitude of openness and transparency for the overall good and health of the supply chain. Practically, you need the technology that provides the data and the insights and appropriately trained and skilled employees to act on this. You need to foster collaboration amongst departments and the multiple steps in the process.
Let’s look at the primary reasons why supply chain visibility and transparency need to be top priorities in your business in 2019:
Minimize Risks and Costs
Profit margins in 2019 are getting increasingly tight. Difficulties over supply and exchange rates are making profit margins even tighter than they’ve been in recent years. This is an incredibly tough field to profit in.
By increasing both visibility and transparency you ensure that you’re not making your profit margins any tighter than they should be, and not exposing yourself to unnecessary risk. Success at the moment is reliant on being able to flex and adapt to the market changes around you. That’s only possible if you can ‘see’ what is going on outside of your immediate sphere of influence.
It may take time and effort to actively prioritize supply chain visibility, but this can be seen as an excellent opportunity for a great return on investment. Open up visibility and you reduce unnecessary cost and minimize risk. The trick here is to use those who are already experts in creating visibility. Don’t be afraid to contact external consultants for such important and mission critical topics.
Identify Successes, root out inefficiencies
How do you measure your business success? Are you sure that your indicators are reliable? Tracking your success is crucial on several levels. Yes you want to ensure a healthy profit, but understanding your success should also be about growth and opportunity.
With increased visibility you can more clearly identify exactly where your successes lie and where you need to make changes to support the overall business. Heading after goals successfully is only possible when you have a good eye on the playing field and all the players.
Communication is the key to visibility and transparency in this regard. Visibility and transparency only work when the information garnered is used appropriately. Technology can be the tool that makes this happen but in order to improve your overall performance, strategic decisions need to be taken when opportunities present themselves.
Identify Weaknesses and Anticipate Problems
The most successful businesses and supply chains are those which successfully identify and plan for problems before they become stumbling blocks. They identify where their weaknesses are so that they can plug any gaps before they impact the overall business. By turning a blind eye to weaknesses, you store up problems for the future.
Visibility and transparency should expose both these weaknesses and potential problems, which opens up opportunity – opportunity to solve them. This puts you ahead of the game and ready to rise to challenges as they present themselves. Given that the 2019 customer is unlikely to hang around while you firefight problems, you need to pre-empt them and prevent the customer from ever seeing a problem rear its head.
This applies on both a macro and micro level. At the micro level, errors in individual orders get flagged before the customer experiences a late delivery. On the macro level, you know exactly how to respond if you have a warehouse fire on the other side of the world.
Visibility and transparency in this way is all about knowledge. Gain the knowledge about every facet of your supply chain and you then have the power to plan and to act. Performance is improved and mistakes are reduced. In turn, this has a positive effect on efficiencies and on reducing costs. A by-product is a boost to your business reputation. Following this, you should see reliable growth.
The trick here is to combine two things: technology and insight. You can’t have the second without the first. Knowing which technology to use and how to deploy it is often the first hurdle. However, the real challenge comes in analyzing the data and insights your technology should bring. This requires advanced skill.
Prioritizing Visibility and Transparency
The nature of management in supply chains is the constant bombardment of clashing priorities, so knowing that visibility and transparency are crucial is not the same as acting on it. However, the knock on effects are evident throughout the business and in bottom line success. Our endless pursuit is one of efficiency and informed decisions. That is only possible when visibility and transparency have been given the important focus they need. Visibility and transparency are therefore a business management ‘must do’ for the health and success of the overall business.