Analyst Insight: Perhaps the most interesting capability that continues to rank highly in our supply chain surveys is the desire for supply chain visibility. Not because visibility is new, but because manufacturers are starting to define it for their businesses in the context of specific-use cases like the desire for comprehensive traceability or the need to be more responsive to changes in the demand forecast.
-Simon Ellis, Supply Chain Strategies practice director, IDC Manufacturing Insights
Although it is hardly new news, manufacturers continue to outsource their operations as companies look for cost economies and, to an increasing degree, flexibility. Yet, many companies find themselves managing a combination of owned and outsourced manufacturing locations - certainly in a less direct way for the latter but still with the same business expectations of quality and timeliness. To the extent that visibility has been a challenge - particularly actionable visibility - across a network of owned facilities, it can be even more of a challenge across a hybrid network. Certainly, key performance indicators and shared metrics can be stipulated in the service-level agreements, but this does not necessarily provide the level of visibility needed to manage the network in turbulent economic times.
To facilitate the intelligent supply chain, visibility is essential. But, is it just visibility, or is it "cost-ed visibility". Certainly supply chain organizations have talked about visibility, perhaps even invested in tools to facilitate visibility, yet it remains elusive and poorly implemented.
It is the contention of IDC Manufacturing insights that perhaps companies need to think about visibility in terms of costs and benefits, and as a capability to drive particular use cases. Perhaps ask the following questions:
1. What is the cost to acquire a particular level of visibility into the business?
2. To what degree do I trust the data?
3. If I acquire a particular "piece" of visibility, can I act upon it usefully, and in a timely fashion?
4. How do we value what it is we are looking at, or, what is the benefit to the business?
Perhaps this is no different that companies have been doing all along, but it is my view that visibility has tended to be one of these "we just need it" and "let's just do it on faith" types of initiatives. And these days, with so many competing projects for investment dollars, I just don't think the approach works - if it ever did!
It is the view of IDC Manufacturing Insights that specific use cases like traceability and supply chain responsiveness will start to drive more significant investments in supply chain visibility. With a business problem more clearly defined, and costs/savings more easily quantified, these specific use cases will allow companies to target visibility improvements and answer the question about its value.
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