Importance of Visibility in the Last-mile of Supply Chain
With the advancements in technology, there have been innovations in the supply chain space as well. While there has always been technology for supply chain design and management, there are very little tools for the day-to-day on the ground operations. This is especially so for the last mile of the supply chain, where more often than not, the execution has been outsourced to multiple third-party logistics service providers.
Due to the number of stakeholders involved in the last mile, the lack of visibility has become one of the major problems in today’s global supply chain. The flow of goods and services that often span across multiple enterprises causing possible data loss and also a lack of visibility as orders are handed off from one party to another. As the goods travel further away through exports from its country of origin, it is handled by more parties and manufacturers do not have the same level of oversight as they do in the originating country.
The lack of visibility throughout the supply chain is not only felt by Supply Chain Directors and Managers but also extend to other departments. A 2018 survey conducted by Deloitte reports that more than half of 504 chief procurement officers from around 39 companies have visibility problems. The finding shows that overall supply chain transparency is poor, with 65% of procurement leaders having limited or no visibility over their supply chain. Their organizations are leaving themselves exposed to potential supply chain disruption and margin erosion by other companies who have better visibility of their supply chains.
Supply Chain Visibility is also inexplicably linked with good data collection and management. With data about supply chain performance, this can help with improving the efficiency and productivity of the supply chain. Both externally and internally, having supply chain visibility problems can put the organizations at a disadvantage in the business world. The lack of accessible data slows the team down as it takes longer to make smart decisions. When information is spread out across different applications and tools, operational delays become inevitable as time is spent collating and making sense of that information. For example, a team might have to check several carrier systems for updates while sharing error-ridden spreadsheets via email.
So what is supply chain visibility exactly? Supply chain visibility occurs when a business and all involved parties have access to the transactions, events, and other applicable shipment data across your supply chain. That visibility extends to each stage of your supply chain, from moving a product or service from the supplier, to your distribution center, and finally to your customers.
Supply chain visibility gives you real-time access to the information your business needs to excel. With that visibility, you can pre-plan according to your shipment statuses — achieving maximum inventory efficiency and optimised transportation costs as a result. Eventually, it will be helpful for the management of performance expectations and to predict future demands. This would be advantageous to a company in achieving business goals.
A high visibility allows the team to collaborate and communicate more effectively with one another, knowing what’s going on in the chain. It provides transparency and permits all stakeholders throughout the supply chain network to be informed about business processes. Problems that arise can be quickly resolved and reaction times can be greatly improved with every party kept abreast of the current state at all times.
Good visibility in the supply chain also helps to build resilience as all parties are kept updated and can react quickly whenever issues arise. This means that the supply chain is more responsive to changing demands and fluctuating needs. Not only should the last mile run smoothly and efficiently, companies should be able to respond rapidly and proactively to changing environments and situations.
Also, with the right software tools like Transportation Management Software (TMS) in place, not only can companies have an overview over all the milestones in the delivery process (eg. Goods Collected, Driver on the way, Driver Arrived, Order Completed etc), companies can also gain benefits from notifications. Escalation policies can be formed and implemented effectively. A good example would be when partial orders occur where only some of the items are delivered successfully, the operations team can be notified and they can immediately make provisions to rectify the situation. This in turn creates a good customer experience as brands are able to react faster to customers’ needs and issues with orders.
Furthermore, with a TMS, companies can standardise the updates across different logistics services providers, who may or may not have systems of their own to use to provide the same amount of visibility for the last-mile delivery processes. Using the same TMS across multiple logistics service providers not only helps to ensure the same level of visibility is available at all times but also the same type and quality of data can be collected and used to improve operational efficiency. This would remove unnecessary gaps of information and make it easier for data analysis and operational review sessions.
It’s no wonder that implementing the right tools to gain full visibility over the last-mile of the supply chain is more important than ever. With the right tool, visibility can be easily achieved and can be used to improve efficiency and customer satisfaction, and also help in lowering costs. As deliveries are expected to be fulfilled faster and customer experience is becoming more important, visibility is now fundamental for supply chain improvements and can help establish appropriate information sharing processes among supply chain managers to benefit the business.