Visibility continues to take center stage among many supply chain issues—as it has for more than a few years and is likely to for the foreseeable future. But what is this visibility issue, and why does it continue to be such an elusive goal?
Technology Evaluation Centers (TEC) has touched on the issue of visibility from many perspectives in many forms in research that can be found on the TEC Web site. Numerous recent events—including stories about Apple and Foxconn, factory fires in Bangladesh, and, more recently Walmart’s disclosure that more than 15% of its suppliers failed their initial audits—serve to highlight the continuing issue that companies have around visibility.
Need for Greater Visibility
While the most immediately available case studies on supply chain visibility are often found in the Tier 1, Tier 2 . . . Tier N suppliers, and many recent stories have to do with ethical concerns, one need only to read, for example, the recently published 5th Annual Survey from the Business Continuity Institute (BCI), to see a full perspective of supply chain disruptions and the need to have greater visibility into your supply chain.
It is all the more alarming, then, to see BCI’s statistics and finding of the laundry list of causes of supply chain disruption.
75% of the companies surveyed “do not have full visibility of their supply chain disruption levels.”
75% of companies surveyed have experienced at least one supply chain disruption in the past year.
42% of these disruptions happened at Tier 2 . . . Tier N suppliers where numerous findings have pointed to a much lower visibility.
It may be surprising to learn that the primary sources of disruption were unplanned information technology (IT) or telecom outages, followed by bad weather conditions or events, and “outsourcer service provision failure.”
BCI’s survey shows several significant increasing levels of supply chain disruption, including “transport network disruption”; cyber attacks; and lack of available talent/skills.
In a milieu of hyper-competitiveness, accelerating business cycles, and increasing consumer demands, the market is perhaps less forgiving than ever before for disruption and delays. The need for visibility is as high, or higher, than it has ever been, and while both end users and vendors pay a lot of lip service to enhancing visibility, the goal seems nearly as elusive as ever with continuing stories of the resulting surprises and consequences.
What Is Supply Chain Visibility, Anyway?
There are, it is worth noting, at last two aspects (anyway) to supply chain visibility:
Responsible, or ethical sourcing
Supply chain performance and resiliency (also known as “supply chain risk management”)
While tomes could be, and have been written on their first topic, and near-equal attention given to the second, this article will talk not so much about this area as about the visibility that supply chains need to have to construct and support healthy and responsible supply chains, and anticipate, sense, and be able to respond to disruption of any kind in the supply chain.
Given how much attention has been paid to, and how much technology and innovation that the technology community is committing to, visibility, it is a wonder, then, that this remains such an unsatisfied goal for so many companies. Or is it?
Visibility is relatively easy to talk about in the supplier context. Visibility, however, extends up and down the supply chain. To TEC, visibility means access to the necessary information on demand, supply, and products, in actionable detail, updated and presented in real time or near real time.
Yet, as others have pointed out, visibility is a best practice that often has no process owner, necessitates the collaboration (if not integration) between supply chain partners with competing and conflicting goals, requires investment in technology, and requires the commitment of resources to (in the supplier context) continually assess suppliers and supplier capabilities.
Gain a Strategic View of Visibility
Walmart, with the available resources and supply chain influence, has taken the laudatory step of publicly disclosing results of its supplier audits, with promises of more to come. Even with the obvious benefits (inventory reduction, lower transportation costs, working capital efficiencies, better customer delivery, brand protection), smaller companies are often more challenged to commit the resources to a full-on visibility initiative.
Supply chain vendors have been offering a range of solutions that serve the goal of visibility, including portals, business-to-business (B2B) networks, supplier relationship management and scorecarding solutions, sales and operations planning (S&OP) technologies, and even the idea of supply chain control towers (which remain more of a vendor marketing framework than a packaged solution).
Visibility should continue to be a major focus for many companies. While companies do not necessarily need to buy into the end-to-end vision of the supply chain control tower, companies do need to take a strategic view of supply chain visibility, recognize the competitive need for real-time visibility and decision making, and commit to achieving better visibility up and down most supply chains. TEC will have more to say about these technologies and vendors in 2014. Will end users be listening, and evaluating and selecting solutions for visibility? Let us know.