CAI Transportation Blog

Supply chain visibility: what it is, why it matters + how technology can help

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Despite being one of the most dynamic industries around the globe, supply chain and logistics can sometimes get a reputation for lagging behind in digital technology. And yet, we’ve heard big talk about blockchain, IoT, and big data being the future of logistics. To an extent, that future is here. But for many companies, actually implementing this type of technology at a large scale seems a long way off. Before we can embrace the technology of tomorrow, we have to understand and utilize the technology of today.

Although it’s been a topic discussed in supply chain and logistics for some decades, many businesses still struggle to capture visibility into their own supply chains. We’ve come a long way, even in the last ten years, with the technology available to us to provide visibility. So, with all the talk of visibility, why can’t we seem to get a handle on it? First, we need to understand what we mean when we say, “visibility,” why we should care about it, and how to achieve it within our organizations.  

Simply put, visibility in logistics is electronic information integrated between trading partners. But that’s only the beginning.

Visibility means at any given time, logistics managers can know where their product is, when it should arrive at its destination, and have access to all the related data to help increase efficiency and reduce error—and costs—along the way. That data will not only provide insight into the current state of their product but also help guide decision-making for the future. When we zero in on the transportation aspect of supply chain visibility, supply chain professionals can receive real-time data and know how to respond to potential problems and threats to the supply chain.

The goal of supply chain visibility

Next, we need to identify the goal of supply chain visibility. The Hollings Manufacturing Extension Partnership puts it this way: “The goal of supply chain visibility is to reduce business and supply chain risk, improve lead times and performance, and identify shortage and quality problems along the supply chain.”

So, when we say we want more visibility into our supply chain operations, what do we really want? In transportation and logistics, there are three main types of visibility we focus on:

  • visibility into inventory: how much do we have and where is it?
  • visibility into performance: how do we measure up against the market and our own benchmarks?
  • visibility into future events, also called “risk events”: how quickly can we react to natural disasters or other volatile circumstances?

What value does visibility bring to your supply chain?

There isn’t much point in investing money in technology or time in training employees around something that doesn’t provide value to your company, your customers, or your bottom line. Being a hot topic in headlines isn’t enough— what value does visibility bring to your supply chain and logistics efforts?

Reduce costs

There are a number of ways visibility can reduce costs for your business. A sudden change in demand for your product (or the end product) or supply of material can increase cost to your business. An unexpected natural disaster or economic swing can have a large impact on your operations and your ability to get your product where it needs to be. More insight into operations means there’s more you can learn, understand, and forecast. With this enhanced visibility, you can react to and reduce disruptions and optimize your supply chain.

Increase level of demand filled

Visibility helps revenue by letting you know the present and future state of your product and inventory. Product shortages due to poor forecasting or poorly executed supply chain operations can mean a lot of missed sales. Visibility via analytics means you can react quickly and develop recovery models when shortages occur.

Make informed decisions about your capital

To manage the variables in supply and demand, many companies add a buffer to their inventories. Unfortunately, rules of thumb (rather than numbers) tend to dominate decision-making, which can lead to poor calls on inventory reductions. Visibility into your inventory and working capital allows you to make data-driven decisions over those numbers that “seem about right.”

Communicate with trading partners

At any given point in the supply chain, there are multiple parties involved. Transparency into operations can offer invaluable insight about your product—can you rest easy knowing things are running smoothly or do you need particular data insights to guide your decision-making on how to respond to an unexpected event?

Having visibility into your supply chain is important. The data visibility provides can improve efficiency and productivity, reduce operating costs, help you provide better customer service, and ultimately give you an inside look at to what’s going on so you can plan ahead, respond, understand, predict, and be all-around smarter about your supply chain.

Visibility through technology

Technological tools can provide data and visibility, but what good is data if you don’t know what to do with it? Ultimately, it’s up to your 3PL to keep you in the know, tell the story of your data, provide solutions with what to do with that data, and be transparent throughout the process.

At CAI Logistics, we value visibility and transparency for our customers, and we invest in the best technology to provide that to them. Our transportation management system (TMS) communicates in real-time with our transportation providers. That means that as your logistics partner, we provide you with accurate monitoring and tracking updates throughout the transportation process.

With their own portal access, our customers can obtain customized reports, billing information, historical documents, and other essential documents to help them analyze data and streamline their workflow. Customized shipment boards, including a customized load board for all active loads, provide metrics on history, lane volumes, pickup performance, and delivery performance. We provide our partners with the ability to download a bill of lading or proof of delivery, view and print invoices, see record history, review current loads, and more. Load boards can be configured to contain any key data column, and reports can be tailored to your organization’s specific needs.

Our solutions support visibility that leads to optimization across the supply chain—so our customers can make informed decisions every step of the way. If you’re ready to get that level of visibility into your supply chain with the right technology and logistics partners, we’re ready to help. Speak with one of our logistics experts today.