Global modern supply chains are incredibly complex, involving a large network of manufacturing and logistics personnel, so even simple mistakes can result in lengthy delays.
Unforeseen circumstances are often the cause of major delays in operations — something we witnessed firsthand as the COVID-19 pandemic threw global manufacturing, stock, and delivery processes into disarray. In response, businesses are looking to boost the visibility and oversight of their operations to help them safeguard their supply chains against future challenges.
More businesses now recognize that the combination of visibility and data is critical to future planning, relationship management, and crisis response.
Understanding the impact of visibility in retail supply chains can help you improve collaboration, fundamentally transform your operations and stay prepared for what’s just over the horizon. Here, we’ll talk about how your business can rethink its approach to data to enable greater visibility across your operations.
The Value of Visibility
Data visibility and transparency underpin all successful supply chains. Both are critical for fluid business operations and help provide the customer service needed to bolster a business’s reputation.
Because a supply chain has several different working departments — often contracted separately — achieving effective visibility means companies need access to multiple data streams to identify sales trends, scale supply, and warn of any delays.
Real-time analytics and proper assortment planning can simplify how those data streams deliver actionable insights.
For example, let’s consider a retail chain. Everything from the manufacturing process to storage and shipment of end products needs to be planned perfectly to fulfill demand with minimal wastage.
If the manufacturing segment of the supply chain is struggling — whether that’s due to staffing issues or problems sourcing materials — real-time data can help you reallocate resources for maximum profitability. This limits delays that impact consumer relations and, ultimately, your bottom line.
The sales gap between e-commerce and in-store shopping is closing, and real-time visibility can help strengthen customer relations by driving timely deliveries. Here, CRM solutions play a pivotal role.
When a customer orders a product, real-time data from CRM solutions can show the consumer when their product will be arriving, update them on any changes to their order and store purchase data along the way. That same CRM data can help you spot trends quickly and strengthen customer service.
Real-time data can also be used internally to bolster service offerings and limit hiccups. For example, you can use trend data to scale demand, minimize waste and make logistical adjustments to ensure timely delivery.
Businesses can also use real-time data to avoid additional delays by implementing a fill-kill order system. Using this strategy, if the order can’t be fulfilled in its entirety, it’s canceled. This reduces unnecessary hassle for supply chain workers and reduces disappointment for customers.
In order to use real-time data most effectively, you’ll need to step back and identify the largest challenges for your business.
Understanding Pain Points
Supply chain planning can be split into two main types, proactive and reactive planning. Modern supply chains that don’t have access to real-time or historical data can only plan reactively. This means they can only act in response to a crisis — often when the reputational damage has already been done.
Real-time data can foster proactivity, but even with the proven benefits of sharing data amongst your manufacturers, vendors, and logistics teams, just 49% of businesses capture and use data in real-time.
To illustrate, consider e-commerce, a highly competitive market where being first is critical. If data on stock requirements and seasonal consumer habits isn’t readily available, it becomes much harder to fulfill orders and meet delivery deadlines.
Lack of transparency means falling behind for the customer too, leaving them wondering when they’ll receive their goods or frustrated by the lack of tracking information. This damages supply chain efficiency as company efforts are directed towards mitigating reputational damage and handling complaints rather than sourcing and securing opportunities for growth.
The longer this happens, the more resources are wasted and more interruptions occur. Ultimately, this means demand isn’t being met — and it’s reflected in your revenue.
Inefficiencies in the supply chain result in lost money from wasted materials, understocked or overstocked products, storage fees, and demurrage fees for late delivery. In fact, one in three organizations faces $1 million or more per year on average in losses.
So how can you start using real-time data to sidestep these issues and streamline your operations?
Planning for the Unpredictable
The most effective way of creating long-term solutions that protect against future unforeseen market dynamics is by using new technology to improve communication and increase visibility. But an often-overlooked tactic is using data to build smarter plans.
A clear plan is key to boosting efficiency, elevating employee happiness, and keeping customer satisfaction high. Plans created using data-driven analytics can also project potential logjams and dramatically improve a business’s first-to-market chances.
Large businesses can achieve more comprehensive assortment planning by incorporating advanced EDI and API systems designed to keep suppliers and customers up-to-date during the buying process. While smaller businesses can benefit from expediting their ordering process to third-party firms with pre-established infrastructure, leveling the playing field with larger corporations.
To refine your plans and create a measurable impact, it’s vital to test your efforts. Third-party companies can run audits on business operations to help spot supply chain issues that are affecting efficiency and help you create a strategy to move past those roadblocks.
Scott Bolduc is director of supply chain strategy at SPS Commerce.
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