Executive Briefings

Eliminating Supply Chain Silos Is Crucial to Improved Visibility and Success

Analyst Insight: Ditching spreadsheet programs and stand-alone supply chain solutions for integrated software solutions is key to increasing visibility throughout the supply chain. By improving visibility, supply chain leaders can further optimize inventory and improve forecasting abilities, as well as increase the business's ability to react to disaster within the supply chain - a top priority for many executives. - Michael Koploy, ERP analyst, Software Advice

The idea that visibility only impacts the most complex supply chains is untrue - even the most "simple" chains often source globally and are instantly impacted by any logistical hiccup. However, Software Advice finds that many supply chain leaders have difficulty moving past "silo-based" approaches - or relying on spreadsheet programs or non-communicative software solutions to manage various supply chain functions.

By adopting software solutions that can provide accurate and up-to-date inventory data, supply chain managers gain a more realistic portrayal of their entire value chain. One way this can be done is through the deployment of integrated supply chain solutions in a supply chain hub. This hub uses a centralized access point and automated inventory collection methods to improve inventory accuracy. In doing so, human error is reduced and inventory data is visible to anyone within the organization with access.

System selection is vital to any organization looking to improve visibility. The ability to collect, organize and evaluate inventory is one of the most important aspects of any supply chain software solution. When evaluating software, the functionality of features such as automatic identification and data capture, inventory dashboards, programmable notifications and pre-set alerts will be key focus points.

Some of the benefits of supply chain visibility can be realized in the following ways:

• Improved inventory policies. Without visibility, inventory managers are left to base their policies around heuristics, which often lead to inventory bloat and inappropriate levels of safety stock. Visibility allows inventory managers the ability to analyze how subtle changes (e.g., changing days' worth of supply for specific products) will affect inventory levels and profits.

• Improved procurement and sourcing analysis. Visibility impacts downstream facets of the supply chain as well. Spend analysis is more accurate with improved supply chain visibility, and purchasing managers can successfully analyze areas that require improved supplier performance. Additionally, impact spend analysis findings can be shared with other departments, such as risk assessment to help mitigate supplier risk.

• Improved communication between manufacturing and transportation. Information from manufacturing, distribution and logistics operations can be further integrated to increase the entire supply chain's reaction time. The entire process becomes much smoother and able to quickly adapt to disaster or rapidly developing change.

The benefits of end-to-end supply chain visibility impact the entire supply chain, from planning and forecasting to sourcing and procurement to logistics. By investing in visibility improvement, business leaders can move beyond thinking about the supply chain as a cost-reductive business initiative. Rather, proper visibility can lead to operational excellence and the supply chain becoming a powerful, strategic arm of the business.

                                        The Outlook

Visibility was a top priority for executives in 2011. Look for this initiative to increase in 2012 as more executives are concerned about supply chain risk in light of recent natural and supplier disasters. Additionally, look for more executives to focus on improving inventory accuracy and accessibility to obtain greater insight into the entire value chain.


Keywords: Supply Chain Visibility, SC Planning & Optimization, Sourcing & Procurement Solutions, Business Intelligence & Analytics, Technology, Business Strategy Alignment, Supply Chain Security & Risk Mgmt, Global Supply Chain Management, Supply Chain Hub, Automated Inventory Collection Methods, Risk Assessment, Supplier Risk Management

The idea that visibility only impacts the most complex supply chains is untrue - even the most "simple" chains often source globally and are instantly impacted by any logistical hiccup. However, Software Advice finds that many supply chain leaders have difficulty moving past "silo-based" approaches - or relying on spreadsheet programs or non-communicative software solutions to manage various supply chain functions.

By adopting software solutions that can provide accurate and up-to-date inventory data, supply chain managers gain a more realistic portrayal of their entire value chain. One way this can be done is through the deployment of integrated supply chain solutions in a supply chain hub. This hub uses a centralized access point and automated inventory collection methods to improve inventory accuracy. In doing so, human error is reduced and inventory data is visible to anyone within the organization with access.

System selection is vital to any organization looking to improve visibility. The ability to collect, organize and evaluate inventory is one of the most important aspects of any supply chain software solution. When evaluating software, the functionality of features such as automatic identification and data capture, inventory dashboards, programmable notifications and pre-set alerts will be key focus points.

Some of the benefits of supply chain visibility can be realized in the following ways:

• Improved inventory policies. Without visibility, inventory managers are left to base their policies around heuristics, which often lead to inventory bloat and inappropriate levels of safety stock. Visibility allows inventory managers the ability to analyze how subtle changes (e.g., changing days' worth of supply for specific products) will affect inventory levels and profits.

• Improved procurement and sourcing analysis. Visibility impacts downstream facets of the supply chain as well. Spend analysis is more accurate with improved supply chain visibility, and purchasing managers can successfully analyze areas that require improved supplier performance. Additionally, impact spend analysis findings can be shared with other departments, such as risk assessment to help mitigate supplier risk.

• Improved communication between manufacturing and transportation. Information from manufacturing, distribution and logistics operations can be further integrated to increase the entire supply chain's reaction time. The entire process becomes much smoother and able to quickly adapt to disaster or rapidly developing change.

The benefits of end-to-end supply chain visibility impact the entire supply chain, from planning and forecasting to sourcing and procurement to logistics. By investing in visibility improvement, business leaders can move beyond thinking about the supply chain as a cost-reductive business initiative. Rather, proper visibility can lead to operational excellence and the supply chain becoming a powerful, strategic arm of the business.

                                        The Outlook

Visibility was a top priority for executives in 2011. Look for this initiative to increase in 2012 as more executives are concerned about supply chain risk in light of recent natural and supplier disasters. Additionally, look for more executives to focus on improving inventory accuracy and accessibility to obtain greater insight into the entire value chain.


Keywords: Supply Chain Visibility, SC Planning & Optimization, Sourcing & Procurement Solutions, Business Intelligence & Analytics, Technology, Business Strategy Alignment, Supply Chain Security & Risk Mgmt, Global Supply Chain Management, Supply Chain Hub, Automated Inventory Collection Methods, Risk Assessment, Supplier Risk Management