SupplyChainTalk: Beyond tracking - the strategic importance of enhanced supply chain visibility 

On 21 February 2024, Supply Chain Talk host Alastair Charatanwas joined by Mike Loquercio, Digital Manufacturing Program Manager, Coca Cola; Nicusor Pisica, Head of Department Inbound Operation, Renault Group; and Fraser Robinson, CEO, Beacon. 

Views on news 

A.P. Moller-Maersk, the world’s second-biggest ocean shipper, told its customers to prepare for the possibility that the Red Sea crisis extends into the second half of 2024. According to CNBC, van der Steene said that Maersk has added about 6% more vessel capacity to its schedule in order to keep the flow of trade moving, further adding to the company’s operational costs. What companies can do to address the problem  is gaining full visibility of their freight that they can monitor on a dashboard. Then they may arrive at a point where they can no longer absorb increasing costs and must pass on at least some of it to their customers. However, previous disruptions have already prepared supply chains to manage a new crisis. The one on the Red sea came at a point when the practice of overstocking was about to disappear but now businesses are switching back to it.

Defining enhanced supply chain visibility 

Supply chain management has become a strategic function in the past few years. Visibility by itself doesn’t guarantee that things happen on time unless you can respond immediately to alerts. The definition of visibility depends on who you’re talking to and what their role is in the supply chain. However, there are two main vectors to visibility – one is the classic tracking use case and the other is about bringing the visibility to all the people that need to have it. So, it’s not just a question of choosing the right technology, it requires collaboration too. It must be assessed whether there is enough safety stock and buffer time to absorb a delay in shipping. The critical point is when a certain delay already affects a company’s customer experience and leads to revenue loss. With the application of AI, the negative effects of a critical delay can be eliminated with a few clicks by activating alternative scenarios.  

But the transportation slice is only one aspect of visibility, and transparency must be end-to-end from making the order to inventory levels or even delivery to consumers. Visibility can enhance RoI through several pathways, where the ultimate goal is to increase revenues and grow the business. With higher visibility you can keep your inventory levels lower and less of your capital will be tied up in stock. Another route is via customer satisfaction, as customers will be more loyal thanks to a more transparent service that enables resolving bottlenecks. 

RoI considerations are different for enterprises and SMEs. The former tend to look at specific RoI for particular metrics (inventory enhancements, customer satisfaction, stockout problems), which are highly measurable. For online retailers, however, the ability to have items that customers need in stock fast is of the utmost importance. They realise that supply chain visibility lies at the core of their business. But data, if you have too much of it unfiltered, can easily turn into white noise. With transparency, you can see what effect your solution, which is deemed spot-on, has on everybody else up and downstream. AI can help identify the information that is most relevant to the operation of the supply chain, as well as find alternative routes, suppliers and solutions in a matter of seconds.  

The panel’s advice 

• To produce good outcomes, visibility must be combined with collaboration. 
• What cloud computing has brought to the world is the ability to collaborate remotely in real or near real time. The challenge is to take communication platforms and apply them to supply chains to enable communication within. 
• Visibility is not only about gleaning data but also creating new data based on what has been collected and which you can also build your automation on. 
• Understand where your gaps and pain points are in terms of visibility, technology or data that affect the customer experience, and choose your tools accordingly.