Addressing Data Challenges With Supply Chain Visibility

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Because global modern supply chains are incredibly complex, involving a vast network of manufacturing and logistics personnel, even simple mistakes can result in lengthy delays.

Unforeseen circumstances are often the cause of major delays in operations, something we witnessed firsthand as the COVID-19 pandemic threw global manufacturing, stock and delivery processes into disarray. In response, businesses are looking to boost the visibility and oversight of their operations to safeguard their supply chains against future challenges.

More businesses now recognize that the combination of visibility and data is critical to future planning, relationship management and crisis response.

Understanding the impact of visibility in retail supply chains can help businesses to improve collaboration and stay prepared for what’s just over the horizon. In particular, they need to rethink their approach to data to enable greater visibility across their operations.

Data visibility and transparency underpin all successful supply chains. Both are critical for fluid business operations, and help provide the level of customer service needed to bolster a business’s reputation.

Because a supply chain consists of multiple working departments, often contracted separately, achieving effective visibility means accessing multiple data streams to identify sales trends, scale supply and warn of any delays.

Consider a retail chain. Everything from the manufacturing process to storage and shipment of end products needs to be planned perfectly to fulfill demand with minimal wastage. If the manufacturing segment of the supply chain is struggling — whether that’s due to staffing issues or problems sourcing materials — real-time data can help reallocate resources for maximum profitability. This limits the delays that impact consumer relations and, ultimately, the bottom line.

The sales gap between e-commerce and in-store shopping is closing, and real-time visibility can help strengthen customer relations by driving timely deliveries. Here, customer relationship management (CRM) applications play a pivotal role.

When a customer orders a product, real-time data from a CRM can show the consumer when their product will be arriving, update them on any changes to their order, and store purchase data along the way. That same data can help the retailer to spot trends quickly and strengthen customer service.

Real-time data can also be used internally to bolster service offerings and limit hiccups. For example, trend data can be used to scale demand, minimize waste and make logistical adjustments to ensure timely delivery.

Businesses can also use real-time data to avoid additional delays by implementing a “fill-kill” order system. Using this strategy, if the order can’t be fulfilled in its entirety, it’s canceled. This reduces both unnecessary hassle for supply chain workers and disappointment for customers.

Supply chain planning can be split into two main types, proactive and reactive. Modern supply chains that don’t have access to real-time or historical data can only plan reactively. This means they can only act in response to a crisis — often when the reputational damage has already been done.

Real-time data can foster proactivity, but even with the proven benefits of sharing data among manufacturers, vendors, and logistics teams, only 49% of businesses capture and use data in real time.

To illustrate, consider e-commerce, a highly competitive market where being first is critical. If data on stock requirements and seasonal consumer habits isn’t readily available, it becomes much harder to fulfill orders and meet delivery deadlines.

Lack of transparency means falling behind for the customer as well, leaving them wondering when they’ll receive their goods or frustrated by the lack of tracking information. This damages supply chain efficiency, as company efforts are directed toward mitigating reputational damage and handling complaints rather than sourcing and securing opportunities for growth. The longer this happens, the more resources are wasted and more interruptions occur. Ultimately, this means demand isn’t being met — and it’s reflected in a company’s revenue.

Inefficiencies in the supply chain result in lost money from wasted materials, understocked or overstocked products, storage fees, and demurrage fees for late delivery. In fact, one in three organizations faces $1 million or more per year on average in losses.

How, then, can companies start using real-time data to sidestep these issues and streamline operations? The most effective way of protecting against unforeseen market dynamics is by using new technology to improve communication and increase visibility. But an often-overlooked tactic is using data to build smarter plans.

A clear plan is key to boosting efficiency, elevating employee happiness, and keeping customer satisfaction high. Plans created using data-driven analytics can also project potential logjams and dramatically improve a business’s first-to-market chances.

Large businesses can achieve more comprehensive assortment planning by incorporating advanced electronic data interchange (EDI) and application programming interface (API) systems designed to keep suppliers and customers up to date during the buying process. Smaller businesses can benefit from expediting their ordering process to third-party firms with pre-established infrastructure, leveling the playing field with larger corporations.

To refine plans and create a measurable impact, it’s vital to test one’s efforts. Third-party companies can run audits on business operations to help spot supply chain issues that are affecting efficiency, and help to create a strategy to move past those roadblocks.

Scott Bolduc is director of supply chain strategy at SPS Commerce.

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