The real cost of poor supply chain visibility

Credit: Afbeelding van Click via Pixabay
The meaning of supply chain visibility is simple: it means you always know what is going on in your supply chain.
However, understanding and maximising supply chain visibility can be more challenging.
When your company has poor supply chain visibility, you can end up facing numerous issues. So, you need to be crystal clear in your vision for enhancing supply chain visibility.
The supply chain data that you should always have access to
In basic terms, supply chain visibility is about tracking your products, components, or raw materials from the original suppliers and manufacturers through to your facilities and then on to the end customers.
In an ideal supply chain visibility situation, you would always have the following data available:
- The supplier’s order receipt.
- The status of the raw materials needed to complete the order.
- The status of the supplier’s manufacturing program.
- The supplier’s delivery date.
- Shipping details.
- Regulatory information.
- Customer information.
- Current order status.
The cost of poor supply chain visibility
Do not underestimate the cost of poor supply chain visibility.
Without excellent supply chain visibility, which is accessed by having the right data always available, your company is at risk of several things.
Disruptions
Firstly, without excellent supply chain visibility, you will not be prepared for major unstoppable disruptions, such as pandemics, fires, floods, earthquakes, labour disputes, trade wars, and political issues.
Such things can cause a huge amount of disruption to the natural flow of your supply chain.
When companies have poor supply chain visibility, they can be unaware of critical dependencies and even not know where suppliers and sub-suppliers are located.
No company wants to be caught off guard with supply chain disruptions, but when you have strong supply chain visibility, you can ensure your company is equipped with a recovery plan when disaster strikes.
Basically, with excellent supply chain visibility, you can ensure your supply chain issues are minimised when disruptions happen.
Interruptions
If your company has poor supply chain visibility, you do not need to wait for disruptions to hit for your supply chain to be negatively impacted.
You could just as easily just lose track of your supply network, which could bring about all manner of problems.
For instance, without strong supply chain visibility, you may not be able to forecast demand. In turn, that means you could be left with too much or too little inventory at different points in your supply chain.
That can create major delays and other problems. Ultimately, it means end customers or clients might not get their items delivered on time, and that can lead to poor customer satisfaction, refunds, and a loss of profits.
Bad data
Great supply chain visibility is all about accessing, analysing, and utilising the right data to ensure your supply chain runs smoothly and to make sure appropriate steps can be taken immediately should unforeseen circumstances arise.
But you still need that data to be 100% reliable, otherwise, you will end up accessing bad data and making poor decisions.
You need to have full visibility into accurate data in order to create unity in your supply chain and predict challenges.
Unethical suppliers
Companies are under the spotlight more than ever before to ensure the suppliers and organisations they do business with meet and maintain ethical standards.
If you do not delve deeply into your suppliers and sub-suppliers, you could end up partnering with a supplier who does not meet ethical or environmental standards.
That can greatly damage your brand and reputation. But you will only get into that situation if your supply chain visibility is poor.