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As priorities shift and departments vie for resources, it’s a leadership moment for supply chain executives.
The pandemic catalyzed an unprecedented sense of urgency to digitally transform the supply chain industry, and for many, real-time supply chain visibility topped the list in terms of priority investments.
The question now is whether organizations will continue the work they started, extending visibility technology throughout supply chains, end-to-end, in order to shed light into the status of supplies, inventory, and order or shipment details, anywhere and everywhere.
My concern – which is based on many conversations with customers, partners and supply chain industry leaders of all stripes – is that “good enough” thinking could prematurely derail visibility efforts that are really just in their adolescence.
There is still so much more value to be realized through the implementation of true end-to-end (E2E) supply chain visibility.
Consider the results of a recent survey of global supply chain leaders by McKinsey, which paint a muddled picture. On the one hand, the report accurately reflects the tremendous progress that has been made in bolstering the resilience of supply chains through technology, inventory increases, dual sourcing and regionalization – 83% of survey respondents said the “resilience measures they have taken over the past two years helped them minimize the impact of supply chain disruptions in 2022.”
And there is widespread recognition that “resilient supply chain planning is built on three interdependent pillars: visibility, scenarios, and master data.” Companies successfully executing on these pillars overwhelmingly reported greater success in minimizing and mitigating supply chain disruptions.
On the other hand, the report strongly suggests that as organizations set their priorities for the coming year, many seem to be under the impression that when it comes to supply chain visibility, they’ve already ‘checked the box:’
Last year, supply chain visibility was the top priority for companies, with 77 percent of respondents saying they were investing in this area. This year, with little more than half saying they have supply chain visibility systems in place, it has fallen to fourth place behind demand planning, supply planning and inventory optimization.
This is wrong-headed thinking.
There’s no question that many organizations have implemented some form of what they are defining as ‘visibility.’ But most organizations define this in the most limited way, i.e., as the ‘track and trace’ and/or ‘where are my shipments’ portion of visibility. True E2E visibility is a journey that goes far beyond being able to see and respond to the status of shipments in transit.
E2E visibility is about literally seeing the status of everything, everywhere, and applying advanced technologies such as AI to automate decision-making and workflows throughout entire supply chain ecosystems. Understanding visibility as just “track-and-trace” is analogous to thinking that visible light is the entirety of the electromagnetic spectrum instead of just a small sliver.
It presents a leadership moment for supply chain execs, as corporate boards and CFOs increasingly weigh in on matters of supply chain resilience and organizational priorities. Supply leaders need to take the reins here and ensure that company leadership understands that visibility is foundational. Better demand planning depends upon deep, E2E visibility – as does improved supply planning, inventory optimization and every other aspect of supply chain operations.
It’s not either/or. Visibility enables all of the other priorities to be well-executed.
Ironically, even as many McKinsey survey respondents reported having visibility systems “in place,” a large number – 45% – said they have “no visibility into their upstream supply chain or that they can see only as far as their first-tier suppliers.”
This seeming contradiction reinforces for me that too many organizations are thinking of visibility in a one-dimensional, narrow and limiting way. And a lack of true E2E visibility seriously hamstrings various risk management efforts.
A recent supply chain survey by EY found that companies who are increasing their efforts toward sustainable supply chain operations struggle with “a lack of visibility and ROI backed sustainability initiatives.”
Supply chain executives have an opportunity to educate and lead. Now is the time to perform a gap analysis on your organization’s – and its entire ecosystem’s – level of visibility. Where are the remaining blind spots? Are you sharing visibility data and insights at every level of the organization, and throughout your ecosystem of partners? The next step is to more explicitly articulate how E2E visibility can help the organization achieve its top priorities for the next three to five years.
At the end of the day, E2E supply chain visibility is perhaps the most powerful capability companies can leverage to validate strategy. Whether it’s the company’s inventory optimization strategy, the supply planning strategy, the customer experience strategy or the environmental, social and governance strategy, visibility is foundational to all.
It’s a leadership moment for supply chain executives, who are uniquely positioned and qualified to be advocates for “the art of the possible” when it comes to E2E supply chain visibility. Now is not the time to let up.
Curious how you can get the most out of real-time visibility, with end-to-end insight? We’d love to show you.