All businesses need a strong supply chain to ensure the goods they want to sell are delivered on time, in perfect condition, and at a competitive price. Yet, the supply chain is a complicated system with many players, each with its own goals and strategies. Every step in the production process — from sourcing materials to shipping products to customers — is handled by a dedicated group of people or systems.
Having a well-functioning supply chain can save you time and money. For example, if you have trouble finding a specific product type, you can use your network of suppliers of your other products to help find it. In many ways, your supply chain is critical to the success of your business.
In recent years, there’s been a revolution in how businesses use the supply chain. As the way we buy things changes, the supply chain has undergone a transformation, changing how companies operate in many ways. One essential part of this transformation is the use of technology. Today’s businesses rely on digital tools to manage their supply chains more effectively than ever. This includes electronic data interchange (EDI), which allows companies to send and receive information.
What is supply chain visibility?
Supply chain visibility is the ability to see everything that happens in the supply chain. This includes tracking the progress of products from their origin all the way to your customer. It allows you to make sure that products are delivered on time and in accordance with your specifications. You can also track inventory levels and forecast future needs.
When a supply chain is visible, you track the flow of products and materials to ensure they are delivered on time, in the correct quantity, and at the correct cost. This helps you identify and fix problems early, preventing the development of larger issues that could disrupt your operations. Many different tools can be used to track your supply chain, including internal systems, cloud-based ERP systems, and third-party suppliers.
The increasing complexity of strategic supply chains & role of technology in managing them
One of the most critical aspects of the supply chain transformation is the increasing complexity of strategic supply chains. A strategic supply chain is essential to your overall success, and it involves multiple steps and connections between different companies. The more complex the supply chain, the more difficult it is to manage.
One way that technology has helped to manage this complexity is by making it easier to track products throughout the supply chain. This tracking can be done with electronic data capture (EDC) systems or radio frequency identification (RFID) tags. EDC systems allow you to track products as they move through the manufacturing process, and RFID tags allow you to track products as they move through the distribution process. These systems allow you to detect problems early in the process and fix them before they become significant.
Another way that technology has helped to manage the complexity of supply chains is by making life easier for purchasing and planning departments. Purchasing departments now have access to more information about their suppliers, including information about the products those suppliers are manufacturing. This allows purchasing departments to be more efficient in selecting the best suppliers and helps them stay competitive in their industry. It also helps companies ensure that their supply chain remains stable and reliable.
Another benefit of technology is that it allows you to expand your sales worldwide and across different regions of the country. For example, you might have factories in several other countries or need goods produced and shipped directly to stores in another region. With modern technology, this kind of operation can take place with ease, as each factory in the supply chain can use technology to get information on how to produce, package, and ship all of the goods they’ve been tasked with supplying.
How does technology help make a supply chain visible?
Technology has helped in increasing supply chain visibility. One of the most important ways technology has done this is by creating a digital trail. This trail records all the actions that have been taken along the supply chain, from the sourcing of materials to the delivery of goods to the customer. This information can be used to track down any issues that may have occurred and to make adjustments as needed. It can also help companies to improve their communication with their suppliers. Two technological advancements in the supply chain are the use of big data and Internet of Things (IoT) technology.
Improve analytics with big data
With automation of the supply chain, more data are available for statistical analysis. This can lead to better decision-making at every stage of the supply chain. For example, in your warehouse, picking zones and warehouse space allocation can be determined by analyzing data on the most popular products and efficiency of workers. Similarly, production scheduling and transportation processes may be improved by analyzing such facts as cost, inventories, capacities and consumer patterns.
See more with Internet of Things technology
Although not widely used in the supply chain yet, IoT technology has huge potential. IoT refers to objects that are connected to one another or to a central sensor and communicate with one another. For instance, sensors may be placed on freight containers that report their location and condition to a central source. By tracking devices and data in real time, you can take corrective actions, such as replacing a shipment of food that has been exposed to unsafe temperatures. You can also collect data that over time can reveal patterns, such as where you consistently have bottlenecks in your distribution, that can be used for predictive analysis and preventative measures.
How does supply chain visibility enable better inventory management?
By digitizing and automating various aspects of your supply chain, you can improve your inventory management.
Improve inventory management
Inventory management is an important part of any business. It’s essential to be able to track inventory so that you can make sure that you’re always getting the supplies that you need and minimizing the amount of inventory that you have on hand. By having high supply chain visibility, you can ensure that all the different parts of your business are working together as a cohesive unit. This will lead to increased efficiency and reduced costs overall.
Maintain healthy inventory levels
Maintaining healthy levels of inventory allows businesses to avoid excess stock that can lead to increased costs and reduced profits. By automating your inventory, you’ll be able to submit orders for high volume products and make decisions about poorly performing products more quickly, allowing you to maintain healthy inventory levels. This will help to ensure that the inventory remains in good condition and does not exceed the company’s needs.
Boost demand forecasting
By using big data analytics to understand which of your products sell well at certain times of year, you can better predict demand, plan for shortages and manage your inventory effectively.
How can Cin7 improve your inventory and supply chain visibility
There are many possible reasons brands lose track of their stock. Generally speaking, though, a lack of visibility tends to come down to inadequate inventory management. If your inventory management system doesn’t automatically include purchases, sales, and other activity that impacts the big picture or if it doesn’t track information in real-time, the information you have about your inventory is not complete nor up-to-date. Here are two common examples:
1. Using manually updated spreadsheets
This is one of the biggest reasons for lack of visibility. Small companies that sell few products can manage fine with spreadsheets. With even a little growth, however, spreadsheets can get out of date quickly, giving you a lack of visibility of what’s in your inventory. Reported stock levels will not match reality, and you may not realize it’s time to restock.
2. Managing sales channels and inventory separately
When you use separate systems for sales channels and inventory, you risk overselling your inventory. For example, if you are a company with a Shopify store and you add Amazon Seller to your channel mix, you will now have at least two places to track inventory, plus any spreadsheets or siloed inventory software you may use as a “master.” The information in your master inventory depends on the people who collect and update the information. If the information is even a little off, the company could end up selling customers a product that isn’t available.
Inventory visibility cannot be an estimate of the products you think you have. It must be the actual inventory based on current sales and any other activity that impacts accurate stock levels and locations, such as purchases, which increase inventory, and branch transfers, which move products to different locations.
How to achieve inventory visibility
Proper stock visibility requires accurately recording everything that happens to products in your inventory. This includes purchases, sales, stock transfers, returns, and any workflow that changes inventory quantity, location, or cost. To that end, visibility can only be achieved if all data are integrated with and tracked in a central inventory master, including:
- All purchases that increase your inventory of components and finished goods,
- Production jobs that lower component inventory and increase finished goods inventory,
- Sales orders that reduce your inventory,
- Dispatched orders that reduce stock on hand and change order status,
- Purchases and sales that adjust inventory at each stock location,
- Stocktakes that confirm or adjust inventory at each stock location, and
- Stock transfers that decrease inventory in one location and increase inventory in another.
The key to visibility is to integrate your data so that you can track products in real-time as they move through your supply chain, affecting stock levels and inventory value along the way.
The benefits of inventory visibility
Integrating data allows your company to
- Reduce data entry and eliminate related errors.
- Eliminate the use of redundant software and portals.
- Increase order accuracy.
- Maintain optimal inventory levels / reduce overall storage costs.
- Fulfill orders faster and increase order transparency.
- Build customer satisfaction and drive future purchases.
- Increase forecast accuracy for improved inventory planning.
- Reduce losses due to obsolete inventory.
Achieving inventory visibility is simple with Cin7
By providing real-time visibility into the status of shipments, Cin7 helps companies to identify potential issues in a timely manner and take corrective action. By using Cin7, businesses can confidently rely on the software to help them make informed decisions about their business operations. Book a free, no-obligation demo below to learn more about how Cin7 gives product companies complete, real-time inventory visibility. Request a Demo.