CSCMP Explores... looks at supply chain visibility

Today's supply chains are more dependent than ever on flows of materials, services, and products from trading partners. Yet one in three companies experienced a material supply chain disruption in 2013. One reason for those disruptions is that there are gaps in visibility between trading partners, which creates a barrier to commerce and undermines efficiency.

Last year, the research firm Supply Chain Insights conducted a survey-based study to understand the state of supply chain visibility, and to find out what companies can do to increase visibility and thus improve supply chain performance. The results of this study, titled Supply Chain Visibility: A Missing Link in the Extended Supply Chain, are published in the most recent issue of CSCMP Explores....

The study found that 30 percent of the 78 respondents outsourced 40 percent or more of their manufacturing activities, and 55 percent outsourced 40 percent or more of their logistics activities. Despite the involvement of third parties, most companies were managing visibility of their extended supply chain through a combination of spreadsheets and electronic data interchange (EDI). Some connected with their supply chain partners primarily by using spreadsheets, faxes, and phone calls.

The study's authors argue that the extended supply chain is too important to rely on manual or outdated methods of communication. Instead, they write, IT systems need to be better integrated. Making this happen quickly is essential for business continuity, corporate social responsibility, and the prevention of major supply chain outages.

To accomplish this integration, the authors suggest, supply chain leaders must first develop a clear definition of supply chain visibility as well as identify the appropriate enabling solutions. Three steps companies can take in that direction include: defining priorities and aligning solutions, documenting the "as is" and "to be" states, and aligning IT strategies with future goals.

In many cases, the report asserts, the best way forward is to implement business-to-business networks that allow one-to-many or many-to-many company interactions and enable data harmonization and synchronization.

The report is free to CSCMP members. Information on how to order it can be found here.