With supply chains that stretch around the globe, retail companies are finding that they are increasingly vulnerable to disruptions such as delayed shipments, capacity shortages, and product recalls. Having greater visibility into what is currently happening in their inbound supply chains can help them deal with these disruptions faster and more effectively.
Retail companies interested in learning how their own level of supply chain visibility stacks up against industry averages may want to take a look at the analyst organization Aberdeen Group's November 2016 report, "Supply Chain Visibility: Know Sooner, Act Now." ( A complimentary copy of the report can be downloaded from the global trade management software company Amber Road's website.)
According to the report, there is a big gap between the level of visibility that best-in-class companies have and that for the rest of the retailing world. A survey of 135 retail supply chain managers found that 85 percent of best-in-class companies can see the status of their in-transit shipments, while only 58 percent of all other companies have that ability. Even fewer respondents had access to more granular information, such as information about what products and orders are connected to a particular shipment. The survey found that 78 percent of best-in-class companies had access to the type of inbound supply chain data needed to make decisions in the face of a disruption (such as where to allocate limited inventory or whether shipments could be rerouted) versus 48 percent of other companies.
One particular point of weakness for retailers was a lack of visibility into supplier quality and manufacturing processes, according to Aberdeen. While 68 percent of best-in-class companies have visibility into their suppliers' quality and manufacturing processes, only 30 percent of all other companies did. Recent events— such as the discovery by Wal-Mart Stores Inc. and Target Corp. that an Indian supplier was selling them fake Egyptian cotton sheets—highlight the risks associated with this lack of visibility.
The Aberdeen report concludes that investment in supply chain visibility pays off in the form of a greater number of on-time shipments and lower overall costs.