Supply chain organizations face several imposing challenges in 2022. As many industries still struggle to recuperate from COVID-related disruptions, continued demand shifts and supply strains threaten a speedy recovery. Supply chain visibility lies at the heart of these issues.
While a lack of visibility didn’t necessarily cause all of the industry’s current challenges, it certainly exacerbated them. If organizations hope to become more resilient, they must be able to detect and respond to incoming obstacles. That begins with improving visibility.
Why Supply Chain Visibility Must Improve in 2022
Supply chain visibility enables organizations to adapt faster, minimizing damages from incoming disruption. Considering how average wait times for Chinese-originating goods rose by nearly a month between 2019 and 2021, it’s clear that this area has room for improvement.
Many sectors are still grappling with ripple effects from shutdowns, delays and demand spikes that arose in 2020. Improving supply chain visibility now can help fight the bullwhip effect, resolving these ongoing challenges sooner. Addressing this issue will enable more significant long-term improvements, too.
While the COVID-19 pandemic was an unusually severe and universal disruption, it’s not the first—nor will it be the last. The resulting delays and shortages have highlighted how the industry must change. Improving visibility will help enable earlier, more effective responses to future disruptions. If businesses want to avoid similar consequences in the future, they must change now.
Here are five ways companies can improve supply chain visibility in 2022.
1. Look for Blind Spots and Pain Points
The first step to maximizing visibility is discovering where it falls short. Most organizations likely have real-time, accurate pictures of some factors, but not others. Analyzing the supply chain for pain points can reveal areas of limited visibility, and addressing these first will yield the most significant improvements.
Inventory levels are a common blind spot, often resulting from outdated solutions. More than two-thirds of supply chain organizations use Excel spreadsheets for management. While these tools can be helpful, they rely on manual processes and can’t offer real-time insight, creating substantial room for error.
Of course, different companies may have various pain points. Organizations can find these by reviewing past disruptions to see where issues arose. It can also help to map out supply chain processes and relationships, reviewing any tracking systems companies use for each part.
2. Embrace the IoT
Once businesses know where they need to improve visibility, they can use the internet of things to do so. Moving away from paper and other manual systems is critical, and IoT tracking is one of the best alternatives.
Connected devices provide real-time data that can automatically sync with online databases, ensuring consistent, timely records. They also reduce human error through automation, giving supply chains records that are reliable and up-to-date. The agility and reliability of these systems make it far easier to gain a comprehensive, current picture of operations.
Inventory and shipment tracking are the easiest and most beneficial places to apply IoT tracking. Wireless sensors in shipments and RFID tags can provide location data and shipment quality updates to provide visibility into logistics and warehouse updates. Businesses should start here if they don’t have other, more significant pain points.
Reevaluate Partner Relationships
Since these chains are complex and multi-faceted systems, organizations must look outside their internal operations. Disruptions and delays can also come from partners, so supply chain visibility must involve transparency from other parties.
Companies should review their suppliers and other partners to see how much insight they have into their operations. If they lack visibility, they should ask for more data-sharing, suggesting that both parties share more real-time information. Preferring to work with third parties that also implement IoT systems is ideal.
Additionally, businesses should reevaluate how they communicate and work with partners, aiming for closer collaboration. These changes can produce significant results. Studies show supplier management improvements can lead to a 69% decrease in scrap and rework time and costs, improving lead times.
3. Standardize and Consolidate Data
As businesses implement more IoT devices and similar technologies across the supply chain, they’ll end up with vast amounts of data. This information will only prove helpful if companies can process it quickly and understand it in context. Consequently, supply chains must standardize file formats and recording processes while viewing everything from a single, central repository.
In many companies, data analytics processes can take several weeks, at which point the data may be outdated. Supply chains can avoid this by streamlining the organization process using standardized formats and reporting tools. Businesses should also work with partners and third parties to ensure they all use the same data processes.
Next, businesses need to hold all this information in one place to view it in context and further streamline analytics. Consolidating data will help remove redundancies and enable faster reactions by providing a single window for all operations. Ideally, this should happen via a cloud solution, as these maximize accessibility and are easily scalable.
4. Establish Efficient Communication Systems and Habits
Supply chains should reassess their internal and external communications. Data is only helpful when the appropriate parties can see it in time to react.
Supply chain organizations must form a habit of communicating regularly. Monthly meetings with suppliers and other partners can help, as do regular employee updates and surveys. In addition, businesses should habitually inform relevant stakeholders of every update or change while encouraging others to do the same.
Maximizing communication involves implementing new technologies. Teleconferencing services and workflow-management software can help keep teams on the same page regardless of location. IoT devices and instant-messaging platforms can complement these services by providing real-time alerts for more sensitive updates.
5. Follow These Steps to Maximize Supply Chain Visibility
Supply chain visibility is crucial to businesses’ post-pandemic recovery and long-term success. Maximizing transparency is the first step to adapting to incoming challenges and disruptions, so organizations must begin this journey now.
These five steps can help any supply chain organization foster greater visibility. As more companies in the industry adopt these practices, the sector will become more resilient and flexible. Even events that businesses can’t prevent will have minimal impacts as a result.
