Focus Areas to Improve Supply Chain Visibility and Mitigate Risk

The ability to track individual components in complex supply chains allows the product teams and procurement subcontractors to tackle inventory and supply problems before disrupting the chain. However, supply chain visibility has become increasingly difficult as management became complex, adding challenges and straining the CSR commitments.

The scope of supply chain visibility massively depends on the product and the organisation’s objectives. However, there are some common pain points where all organisations will want to dedicate their resources for long-term profitability.

Improving supply chain visibility - 4 Tips

1. Product lifestyle transparency

Over the last decade, a massive shift has been observed in consumer behaviour regarding their awareness about product sourcing. Essentially, they want information about the composition of a particular product and the origin of these parts, staying away from brands that indulge in unfair practices like abusing human rights and child labour when sourcing products.

Therefore, organisations must stay true to their corporate social responsibility commitments and work with sourcing agents demonstrating ethical sourcing practices. Not only that, but they must also take proactive measures to improve the product’s lifecycle transparency.

2. Supplier performance metrics

The next step is improving the supplier performance metrics to allocate time and resources based on the risk factors properly. For instance, not all suppliers deliver 100% on social and environmental safety, quality control, etc. A better method to keep a tab on the performance metrics of each supplier without indulging in costly audits will allow organisations to grade these suppliers, improving the visibility into the supply chain and its transparency and efficacy.

3. Centralised data and its uses

While more data is always beneficial, all the data in the world may convolute things without a data management protocol. Therefore, data management is most likely the most significant area to focus on to improve supply chain visibility. A centralised repository of data on the suppliers, origin of the product components, and performance metrics allows procurement subcontractors and everyone else in the organisation to study the supply chain and identify potential pain points at any given time. In addition, it simplifies the compliance process, allowing firms to study past performance to predict future trends.

4. Improving risk assessment

The probability and severity of several risks in the supply chain are difficult to address and therefore challenging to address and mitigate in time. Intrinsic and extrinsic factors (like a pandemic) can bring the entire supply chain to a halt. A better insight into where these risks prevail will allow firms to assess their severity and undertake proper steps to mitigate or solve them without hassle.

The globalisation of the supply chain and digitisation of supply chain management have added challenges requiring the sourcing agents to gain better visibility into various parts of the product lifecycle. In addition, quicker adoption of industry 4.0 technologies like advanced analytics and AI will allow businesses to thrive and succeed in highly competitive markets.