Many businesses struggle with supply chain operations simply because it involves so much monitoring and visibility. For even the simplest of businesses, the supply chain can be extremely lengthy and complex, involving many suppliers and steps. In order to manage one’s business properly, it's completely necessary to see what is happening in the planning, sourcing, building, delivering, and returning stages.
Despite a growing movement towards investing in tech and qualified personnel, many businesses struggle to achieve end-to-end visibility across the supply chain in its entirety. There is clearly a need for it, but in a competitive global environment, it is difficult to respond as quickly as necessary to all supply chain events that could impact customer experience and profitability.
But what exactly is end-to-end supply chain visibility by definition? Why exactly is it so important, and how can one’s business focus more on excellent overall visibility? Let’s take a look.
What is end-to-end supply chain visibility?
End-to-end (also known as E2E) in supply chain management refers to the end-to-end process in the supply chain. It involves the process in its entirety, starting at the procurement of materials from suppliers and ending when the product reaches the customer. The process needs to be tracked with data logging and circumstance monitoring, and that collected data must be analysed.
In most instances, end-to-end supply chains will follow this formula:
- Procurement and inventory management
- Logistics and planning
- Sales and customer service
When we bring visibility into the picture, E2E supply chain visibility is a necessity for businesses to communicate, solve problems, and provide service to partners and customers.
In addition to visibility, it is also important to understand supply chain collaboration, as it is the main way to gain visibility along your supply chain. Supply chain collaboration is the act of having a collaborative multi-tier supply chain planning and managing solution. For the sake of visibility, collaboration is a solution to getting more insight into the ordering process, inventory that is in motion or at rest, supply chain issues or risks, and stand-alone supply chain analytics. Collaboration also aids in supply chain event management. To put it simply, collaboration among the necessary teams, warehouses, suppliers, and stakeholders is necessary to have better visibility of your supply chain.
Upstream vs downstream
In many cases, businesses focus solely on downstream visibility. This is because downstream visibility focuses primarily on the customers, which should naturally be a priority. However, the idea that a business should only focus on downstream visibility is actually quite damaging and narrows the business focus. It’s also a very old-school way of looking at supply chain visibility.
Downstream visibility can be defined as a pure understanding of how one’s products are traveling down the chain to the customer. Downstream covers each process and action involved in getting the complete product from the warehouse to the customer. Upstream visibility is a pure understanding of how all the parts necessary to make the product are moving through the supply chain. It covers all of the processes, actions, and movements involved in getting each part to create the final product.
Downstream and upstream visibility together create end-to-end supply chain visibility.
Focusing a little too much on downstream means that you could risk not getting the proper parts needed to build your final product. Ask yourself this question: How are you going to get your specific product into your customers’ hands if you can’t build them to begin with? As such, upstream visibility is crucial to E2E supply chain visibility.
What are the benefits of E2E supply chain visibility?
There are a number of benefits to having better visibility in the context of your end-to-end supply chain:
- Improved customer service on the shipper’s end
- Overall enhanced and improved customer experience
- Cost controls via management of inventory in motion
- Proactive status tracking and updates as close to real-time as possible
- Fewer disruptions
- Better risk mitigation
- Better prevention of order errors
- Better customer retention
- Fewer errors
- Improved view of business functions
- Improved insight into demand for OEMs
- Improved planning opportunities and capabilities
- Better reporting
- Tangible data analysis potential
What is preventing end-to-end supply chain visibility?
Unfortunately, many businesses on a global scale are not keeping supply chain visibility as a top priority. According to Geodis’ Supply Chain Worldwide Survey report, only 6% of businesses reported that they have end-to-end supply chain visibility. In the few years since the report’s release, that number has not changed much.
There are some ways to focus on both upstream and downstream visibility. To begin with, give your procurement department access to all necessary data in order to provide the right insight into all risks affecting the supply chain.
Most disruptions in the supply chain also occur below the first tier, where there is little visibility. Make it a priority to get visibility into your first-tier suppliers as well as your sub-tier suppliers. Having a great relationship with your first-tier supplier is necessary for this.
Look at which major logistics hubs your supplies and finished products are going through. Are there any obvious bottlenecks, and is your supply chain management team aware of events that might harm your supply paths? You need to be able to mitigate possible threats in real-time.
Next, you’ll want to take a look at your own distribution centers and warehouses. Monitor as many sites as necessary to properly monitor your suppliers. Having decent communication methods and good relationships with your internal stakeholders can be helpful for this. Those who are on those sites will know the best if there are issues or potential issues. From there, you can work together to test actions and solutions to prevent issues.