As businesses are going global and expanding day by day, operations are increasing rapidly. Bigger companies are no longer limited to a city or country and their networks aren’t restricted. Since a company may be operating in multiple locations, it is essential to keep track of every one of those activities for a number of reasons. One of the most crucial parts is the supply chain. A geographically dispersed chain needs to be monitored in order to ensure security and quality. Thus, supply chain visibility has become a must for such businesses. But what measures must be taken? Are they worth it?
Global expansion of businesses has forced companies to outsource and spread their business operations over multiple geographic regions. Christopher (2005, pp. 25-35) Let us look at the example of Toyota. The company has manufacturing and assembling operations in many countries like Pakistan, Japan, and China. But most of the main parts and supplies come from countries like Malaysia and Korea. Hence, Toyota has a diverse supply chain. A diverse supply chain is usually very long and has a lot of crucial points. In order to ensure the safety and quality of supplies, the supply chain must be monitored and tracked. Tracking components and operations in such a supply chain is not an easy task. At least it was not, but that has changed over the past few years. Supply chain visibility is the concept that aids businesses around the world in keeping track of and monitoring their supply chains. Hoekman (2001, pp. 50-55)
Methods to Increase Visibility
Time is an important factor today with practices such as Just In Time manufacturing and inventory, where supplies are procured when they are needed. Inventory levels are kept as low as possible in order to save warehousing and inventory costs. In this type of environment, even the slightest delay in any link of a supply chain can cause a company a lot of business (Visibility and Collaboration Systems, n.d.). To prevent this, a business must monitor and keep track of its supply chain. New methods and ways have been developed to increase supply chain visibility. The most popular one is RFID (Radio Frequency Identification) this mechanism is used to track supplies, items, parts, packages, etc. over its entire route. RFID uses telecommunications technology to track an item or a group of items anywhere, anytime. For example, a business can keep track of a shipment order from its supplier that is being transported across two countries via multiple channels (air, sea, and land). If the logistics service providers support RFID tracking, the business will be given a tracking number through which they can find out about the shipment’s delivery at any point in time or the route. This provides the business with exact and real-time notifications on the status of their supply chain operations and planning and timing of operations can be done with pinpoint accuracy. (Supply Chain Visibility, n.d.)
Another new way is through GPS (Global Positioning System) which is similar to RFID. In this, satellites can pinpoint the exact location and provide visual status and notifications on a particular order or shipment.
Another aspect of supply chain visibility is the visibility of information. Information needs to be accessible and visible to all departments and links in the supply chain. The solution to this problem is an enterprise-wide integrated information system. With the help of such a system, information from the sales and marketing department would be easily available to the supply chain links. For example, Garment Production and purchasing levels can be linked with the levels of demand and sales forecasts and inventory costs can be saved. Also, with more involvement and integration, the company can share ideas and work together. Systems with as ERP, SCM, and CRM software offers these facilities and increase supply chain information visibility.
Conclusion
Increasing supply chain visibility is an additional cost. But is it worth it? Yes. By increasing supply chain visibility, businesses can keep track of their supply chain which is a very important function. This prevents any mishaps that could delay operations and cost a lot of money. Tracking also allows logistics and other services providers to predict and foresee any obstacles and bottlenecks in a supply chain. It also ensures the safety of valuable supplies and prevents any accidents. Planning and scheduling of operations can be done more accurately if the exact status of shipments and deliveries is known. Also, with a clear view of the entire supply chain, it is easy for businesses to identify weak points and correct them. It is evident that the benefits of increased visibility certainly outweigh the costs in today’s global environment.
References
(n.d.) Supply Chain Visibility. Ciber [Internet] 2009. Web.
(n.d.) Visibility and Collaboration Systems. Tompkins Associates [Internet]. 2009. Web.
Christopher, M. (2005) Logistics and Supply Chain Management. 3rd. ed FT Prentice-Hall. ISBN 0273681761
Hoekman, B. & Kostecki, M. (2001) The Political Economy of the World Trading System from GATT to WTO. Oxford. ISBN 019829431X