Why is Visibility critical to realizing Supply Chain Agility / Adaptability?
The underpinning of agility is visibility.
Visibility is a Critical Enabler to:
- Acquire the fundamentals of what is going on in your supply mechanisms
- Perform Supply Chain Diagnostics
- Determine the best corrective actions to reduce risk and supply disruptions
- Mobilize and orchestrate Stakeholders and Supply Chain Actors to act accordingly
Visibility on the interaction between these dimensions is vital to supply chain success. These areas are complex components and a thorough understanding of the cause and effect relationships between them is critical. The goal here should be the acquisition of visibility as quickly as possible.
According to a Deloitte Study 65% of procurement leaders claim that they have no or limited Visibility of their supply chains. Many may argue that Supply Chain Visibility is a Core Input for realizing Resilience, Risk Mitigation, and Supply Sustainability.
Limited visibility can:
- Negatively impact Supply Decision-Making Processes
- Negatively impact the Capacity of Supply Departments ability to anticipate disruptions
- Compromise the capacity for Proactive Supply Planning
- Increase the probability of failure due to supply chains becoming more complexed, due to shifting demands and customer requirements
- Increase Supply / Demand Imbalances and Bullwhip Effect
- Exposure to fraud, theft, and maverick spending
- Increase the Total Cost to Serve and Total Cost of Ownership
- Reduce Supply Chain Performance
- Loss of Value in your supply chain
- Increase the burden of meeting compliance with regulatory demands
Table 1, Current Levels of Supply Chain Visibility
Source: Deloitte. Leadership Driving Innovation and delivering impact
“Compliance is an up and coming factor, and manufacturers are expecting a lot more regulations for environmental compliance, around packaging for trade compliance and things like pedigree, for understanding where your product is coming from,” Noha Tohamy, at AMR Research
What type of Visibility do you have on your Procurement and Supply Chain Activities?
Did you know that visibility impacts the Degree of Supply Chain Maturity?
State 1, depicts Ad-hoc Reaction
State 2, depicts Anticipation
State 3, depicts Integration
State 4, depicts Collaboration
State 5, depicts Orchestration
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