Managing Risk Through Supply Chain Visibility
While your business can always benefit from a supply chain analysis, gaining visibility into your network is now more important than ever. The intense effects of the COVID-19 crisis on our global economy only underscores how critical it is to gain transparency in your supply chain, giving you the ability to manage risk and react quickly to fluctuations in product demand.
What is supply chain visibility?
The term “supply chain visibility” is used to describe transparency in a number of different business processes. Some companies may refer to supply chain visibility when tracking the movement of a product from its initial shipment to its final destination. However, full supply chain visibility typically refers to the ability to track several types of processes within the supply chain, from sourcing raw materials to production and distribution, all the way to final delivery.
Why is supply chain visibility important?
Transparency in your supply chain gives you access to all sorts of important information about your business processes, including:
- A detailed look into supply chain productivity, helping you better integrate your capabilities and find ways to limit costly redundancies.
- A greater understanding of the industry, including your company’s competitive advantages and opportunities for growth.
- Potential threats to your supply chain, giving you the ability to respond to and mitigate issues faster and with less profit lost.
How do I get started analyzing my supply chain?
In order to achieve greater visibility of your network, you must start by assessing any gaps in the tools, processes and partners your business relies on. When analyzing your supply chain, consider these helpful tips:
- Establish trusted networks
When selecting suppliers, carriers and other partners, it’s important to remember that cost savings is not the only metric to evaluate. While affordability is an important factor in the procurement process, you must also consider if your network is prepared for future disruptive events. Are your suppliers prepared to handle the ebbs and flows of consumer demand? What processes are in place to mitigate supply chain disruption? Make sure to discuss any potential service disruptions with your team and spell out expectations should an unexpected disruption occur.
- Improve communication
In recent months, many of us have seen examples of slow and uncoordinated responses to COVID-19 due to poor communication between global teams. Be sure to establish ongoing communications with your supply network so you understand any current issues and can plan for any potential challenges down the road.
- Plan for disruptions ahead of time
Now is the perfect time to review your supply chain and determine solutions not only for our current economic crisis, but also for other potential disruptions down the road. It’s important to assess your supply chain to determine any possible pain points or weak links in your network. Consider this graph from the World Economic Forum, which shows other potential supply chain risks from environmental, economic, geopolitical and technological causes.
- Map your supply chain
There are many ways to begin mapping your supply chain, but the most common approach is to start with the key components of your network. Consider your top five revenue-generating products and break out each product by its components, listing the suppliers (and their suppliers, if applicable) all the way down to the necessary raw materials. Your map should also include specific information about each supplier in your supply chain, including primary and alternate site locations, available inventory, and typical production time. While mapping your supply chain may seem time intensive, its value is well worth the associated costs — a detailed map can help you inspect your network for any issues that may arise in the future.
The current pandemic has shown us what happens when you do not have full visibility into your supply chain. We encourage you to invest in assessing your supply networks — including your transportation options with Unishippers. This short-term investment will surely reap long-term benefits for your business.
Last Updated 4/24/2020