The issue of visibility in supply chains has been talked about for over 30 years but never completely resolved.
Ever since FedEx offered online track and trace at the beginning of the internet era, companies and consumers no longer had to call a customer service hotline to get information on a shipment. Nevertheless, this major step change only updated a small – but important – piece of the supply chain: the final shipment from a distributor or retailer/e-tailer to the final recipient.
Adopted quickly by other express carriers, this piece of technology has increasingly evolved to present up-to-the-second changes and alerts, not only regarding the physical whereabouts but also the condition of shipments. Furthermore, it allowed businesses to issue invoices faster than before, and so payments were accelerated as well.
However, this development has not resolved the wider visibility issues around the global supply chain, where multiple parties are involved in a series of transactions in a trading network and a B2B2B2B2C chain.
A SURVEY OF SUPPLY CHAIN BUSINESSES
To get deeper insights on their challenges and needs, Endava partnered with logistics research provider Freightwaves to survey companies across the supply chain on their current readiness in terms of visibility. Showing that it is fast becoming a must-have, these companies recognise that greater visibility leads to higher efficiency and improvements to the bottom line.
Let’s take a look at some key takeaways from this study.
Poor visibility across the supply chain
While the majority of respondents have taken some steps towards embracing visibility, they acknowledge that there is significant room for improvement in their strategies. We believe that this indicates that this lagging visibility could be tied to technological hesitance.
Low level of end-to-end information solutions
Perhaps more disturbing is that many respondents still don’t feel the need to engage in these solutions. They have a sense of complacency and don’t see the value that such solutions can provide since their customers seem to be satisfied with their service. We think that this is valid only to the extent that no major supply chain disruption happens. It is not a sustainable or resilient solution.
High level of manual intervention in processes
A great number of paper processes and manual handoffs still occur in today’s extended supply chain. This was also recognised by our survey respondents. Many don’t seem to value the cost benefit that occurs when better, more technology-driven processes are put in place. Not only can organisations save money, but they become significantly less error-prone and can avoid having to rework process parts or entire process chains.
Adoption of connectivity solutions still behind the curve
Perhaps the most astonishing answer was on the use and integration of systems via the use of APIs. 20% of respondents didn’t even know how many APIs they were using throughout their supply chain, and 50% were using less than four integrations. This simply shows the huge opportunity for increased connectivity between the various players in the supply chain.
IMPROVING VISIBILITY THROUGH TECHNOLOGY
Yet, current capabilities in technology do allow trading partners to share information across the supply chain. Data turns into dashboards to alert all parties involved of any issues. Like any online system, the exchange of information between trading partners through APIs, integrations, manual inputs, etc. is only as good as the willingness of those partners to share that information. Furthermore, it is only as good as the quality of that data.
As the answers to our series of questions have shown, the overall data exchange between the parties in a supply chain is still far from where it could be. It is critical that the adoption of technology-supported visibility solutions accelerates. Perhaps the huge supply chain disruptions and the current media and political focus on these backlogs will re-centre the focus of attention on the need to complete the digitalisation of these processes.
In the end, those who don’t innovate in this area will lose a competitive advantage as they fall behind their more tech-savvy peers.