In case you missed what we’ve been up to…this is post #5 in our 10-post series covering the top ten 2024 supply chain trends that were announced by the Association for Supply Chain Management (ASCM) in September. In each post, we’ve been tackling a topic on the list to see how it’s making an impact in supply chain management (SCM).
Here’s what we’ve covered so far:
This week, we’re covering #5 on the list: Visibility, Traceability, Location Intelligence
Over the next five weeks, we’ll take a similar approach for each of the remaining categories in the top ten, which are:
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Disruption and Risk Management
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Agility and Resilience
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Cyber Security
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Green and Circular Supply Chains
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Geopolitics and Deglobalization of Supply Chains
While listed as three separate entities, supply chain visibility, traceability, and location intelligence are close cousins that work together to enable something else experts tout the need for: supply chain transparency.
Supply chain visibility vs transparency
Although supply chain visibility and transparency may sound like the same thing, various experts say they’re not.
According to IBM, supply chain transparency “allows businesses and consumers to understand how goods are produced and distributed. This includes knowing where and how products are made, the labor practices involved, the journey of products from source to consumer and any environmental impacts that occur along the way.”
In contrast, the company says supply chain visibility mostly provides an internal view of a company’s supply chain information.
“Transparency, however, goes beyond internal knowledge,” IBM says. “Supply chain transparency is not just about the company itself accessing information, but also making it accessible to external stakeholders, including customers, investors and regulators.”
Oracle agrees that there’s a difference between the two, noting that confusion in this context is common.
“While supply chain visibility refers to what companies see, transparency refers to what they do and communicate after seeing it,” Oracle says, adding that each is reliant on the other.
“A company can’t be transparent about things it doesn’t see or know,” the organization notes. “But the converse is also true: Transparency creates visibility. If a supplier is unwilling to be transparent about its operations, it’s difficult for the supplier’s customers to have any visibility. The two conditions are intertwined.”
Enabling supply chain visibility
Oracle says supply chain visibility (SCV) provides a detailed and comprehensive view of products throughout the supply chain — from the initial procurement of raw materials to final delivery to the customer. And that such a granular and extensive perspective is made possible by the “massive” amounts of data generated by supply chain technologies.
“Companies gain SCV by effectively connecting and managing that data to spot (or anticipate) problems in the supply chain, optimize the performance of operations, and plan more effectively,” according to Oracle, which describes three steps that enable data’s central role in this process.
1. Data collection
Oracle lists a variety of both internal and external sources which provide the data needed to enable supply chain visibility, including:
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Enterprise resource planning (ERP) platforms
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Transportation, inventory, and customer relationship management (CRM) systems
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Supplier data
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Weather patterns
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Customer reviews
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Economic trends
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Various technologies, such as radio frequency identification (RFID) tags, GPS devices on trucks, and IoT (Internet of Things) sensors
2. Data storage and analysis
Once collected, the data is then stored in an environment — such as a data repository or management system — in which it can then be processed and analyzed.
“Advanced supply chain analytics can help companies uncover profitability drivers, understand costs, identify demand trends, evaluate order fulfillment and delivery performance, manage supplier risks, and assess the impact of economic, social, and environmental trends on their business,” Oracle says.
3. Data display and sharing
Once the data has been collected, stored, and analyzed, results can then be displayed on real-time dashboards to help supply chain professionals meet various business needs.
By connecting all three steps, Oracle says businesses gain a “complete picture” of supply chain efficiency. The company also notes that related technologies — including IoT sensors; artificial intelligence (AI); and AI-driven analytics and machine learning — are rapidly evolving.
The benefits of supply chain visibility
The fickle nature of today’s global supply chain increasingly requires more of the benefits SCV can provide. In fact, Oracle says a 2022 Supply Chain Survey conducted by IDC found that 80% of respondents had projects in the works to improve SCV.
In addition to giving managers a heads-up about new issues that require a rapid response, Oracle says SCV can help organizations keep up with or outpace the competition by allowing their supply chain teams to:
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Identify their most trusted suppliers so they can keep factories running
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Uncover cost-saving opportunities and operational bottlenecks
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Monitor driving behaviors in fleets and encourage fuel-efficient driving habits
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Monitor work in progress across factories to maximize product quality
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Gain visibility into the sales funnel to improve supply chain planning
Additional benefits include the ability to:
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Identify shortages in materials and inventory
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Enjoy near real-time tracking of goods
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Speed up decision making
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Cut down on costs
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Mitigate risk
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Meet regulatory compliance requirements more efficiently
“The benefits of supply chain visibility are extensive and can ultimately drive higher productivity, happier customers, and greater profits,” Oracle says.
Intelligent supply chain visibility
While others are parsing the difference between supply chain visibility and transparency, global consulting firm Accenture takes things a step further by categorizing supply chain visibility as either “structural” or “dynamic” — which, when combined — create “intelligent” visibility that leads to better supply chain resilience.
“Intelligent visibility is a capability that is a combination of structural and dynamic visibility supported by analytical techniques and artificial intelligence,” Accenture says.
According to the firm, structural visibility answers the question, “What does your supply chain look like?” by providing an operational snapshot “at a point in time or over a certain period.”
In contrast, dynamic visibility answers the question, “What’s happening right now?” by providing companies with real-time event monitoring that informs any needed response.
Accenture says the combination of the two creates intelligent visibility that offers a “deeper view into the extended supply chain,” which supports improved response times and fact-based decision making for managing supply chain disruptions — as well as guidance about where to focus investments.
Based on its research, Accenture says it has found a “strong correlation between visibility and resilience.”
For more details about the firm’s findings, please see the full report.
The growing role of blockchain
As we noted in a previous post, blockchain technology is playing a growing role in the supply chain to enhance visibility, traceability, location intelligence, and transparency.
IBM defines blockchain as “a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network.” The firm notes that assets can be tangible or intangible and that “virtually anything” can be tracked on a blockchain network, which helps to reduce both risks and costs for those involved.
According to IBM, blockchain is important to business because it “provides immediate, shared and completely transparent information stored on an immutable ledger that can be accessed only by permissioned network members.” This shared, “single view of the truth” provides end-to-end visibility of each transaction, which enables a variety of benefits—such as increased trust, more efficiencies, and the potential for new opportunities.
IBM describes the key elements of a blockchain as:
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Distributed ledger technology—which gives all participants access to a shared ledger in which transactions are only recorded once.
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Immutable records—meaning that transactions cannot be changed once they’ve been recorded in the shared ledger. If an error needs corrected, an additional transaction must be added to reverse the error.
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Smart contracts—which are a set of rules stored on the blockchain that are automatically executed to help speed transactions.
As Oracle notes, this “digital ledger of supply chain transactions” can be updated in real time and shared by and with stakeholders across the supply chain.
“The ledger becomes a virtual path partners can trace,” Oracle says. “Intelligent track and trace combines blockchain, Internet of Things (IoT) sensors, and analytics to automate tracking, making it fast and easy to trace products through every step of their journey.”
