How greater visibility can improve the supply chain

     

Companies can gain better visibility into their supply chains through a number of methods, perhaps the most common being through the use of B2B integration solutions.

By collaborating more with the partner community, a company is provided with a full view of its manufacturing process, which, in turn, can lead to it identifying and fixing issues more quickly and easily.

According to a recent report submitted to the Warehouse Management Systems Guide blog (homepage), greater visibility can have an impact on supply chain management in the areas of planning, procurement and execution. Contributor Michael Koploy said "end-to-end visibility allows supply chain managers to better automate day-to-day activities and focus on more strategic responsibilities."

Below are a few examples of how that's made possible.

1. Improved inventory policies

Instead of going off gut instincts or inexact rules of thumb, companies will be able to manage their inventories more effectively if they have greater supply chain management. That means they will no longer have to stock the same amount of all products, and instead can manage their inventories based on demand.

Koploy said an organization can even determine the impact that will result in changing service levels from 98 percent to 97.9 percent. Doing so could ensure that just the right amount of a product is in stock at all times.

2. Accurate procurement analysis

According to the report, "visibility allows purchasers to more accurately analyze spending habits, prioritize commodities and identify areas to improve."

That means companies can look to the past to determine how they should be spending, or most likely will be spending, in the future. Some solutions even allow managers to predict future outcomes based on a set of analyzed scenarios.

3. Greater use of electronic data interchange

With more of a reliance on technology like electronic data interchange, the report said, companies can expect greater communication with the transportation and manufacturing segments of the supply chain. That's because "all parties can be notified of an incoming shipment or a production delay - smoothing out the entire logistics process," Koploy said.

According to a report recently issued by a U.K.-based supply chain consulting firm, many of the areas highlighted by Koploy in his Software Advice blog post are among companies' top concerns heading into 2012. That suggests that businesses should heed Koploy's advice and work to create better end-to-end visibility.