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Supply Chain Visibility to Impact Customer Loyalty, Buying Decisions by 2020

Analyst Insight: The term supply-chain visibility means different things to different folks. Interestingly, it's something that everyone knows they need more of, but very few organizations have a handle on. This will change rapidly between now and 2020. Supply-chain visibility is having an increasing impact on customer relationships and buying decisions. - Bryan Nella, senior director of corporate communications, GT Nexus

Supply Chain Visibility to Impact Customer Loyalty, Buying Decisions by 2020

The mainstream public tends to look at high profile issues like natural disasters, recalls or counterfeiting when thinking about supply chain risk but that’s beginning to change. A growing emphasis is being placed on the supply chain, in both the B2C and B2B markets, by customers, the media and investors. In particular, a slew of issues are impacting buying decisions and customer loyalty, including:

• Sustainability

• Stockouts

• Quality and recalls

• Factory conditions

• Supply-chain disruption

All of these challenges and risk areas require greater capabilities within one common area: visibility. Supply-chain visibility tends to be an overused term that means different things to different people. Some think that knowing when their goods will arrive is visibility. Others rely on data from 3PLs or tier 1 suppliers to provide visibility. While these are glimpses of visibility into certain steps in the supply chain, the discussion being brought to the forefront in light of the wave of brand damage caused by supply-chain disruption or failures is lack of end-to-end visibility. This term — end-to-end visibility — encompasses a broad definition and an even broader scope of work. Supply-chain visibility means a clear view into goods, data and payments from initial order through production and delivery. It reaches across tiers and enables multi-enterprise collaboration on a single set of data. It delivers a network view. Gartner’s Christian Titze recently suggested that supply-chain visibility applications should provide an information hub. The hub itself does not create value, but deployment of hub data drives timely outcomes. Instead of relying on excess inventory, Titze says, “Near-real-time visibility enables earlier detection of problems, as in risks, in both upstream supply networks and downstream channels, and immediate collaboration with suppliers and partners. When visibility-enabled companies encounter network and channel problems, the early detection gives them time to implement corrective actions and get deliveries back on track.”

End-to-end supply-chain visibility, in this environment, is the foundation for optimized decisions that reduce risk and cost — while assuring quality and on-time delivery of goods.

Why has supply-chain visibility remained so elusive to this point? Part of it is the current mindset. We typically view supply chain as a linear chain — a string of transactions and handoffs. Over the years, technology has evolved to plug in gaps and visibility black holes. Traditional solutions such as ERP, EDI and web portals have proven to be partially effective in years past. But partial visibility in today’s complex world is no longer sufficient.

The Outlook

Manufacturers and retailers that lack deep visibility and transparency are in fact now paying a price, in the form of lost revenues and brand erosion. Looking ahead to the supply chain of 2020, supply chain will be increasingly viewed as a network — a value network where each node is equipped with deep capabilities to deliver and execute based on data and visibility that optimize performance of the whole ecosystem. The supply chains of 2020 will be networked, agile and centered on customer expectations.

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