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Why visibility leads to improved supply chain resilience
▉ Insight 1
As global supply chains adapt to build resilience, the supply chain design must be infused with forward-looking intelligence and decision-making agility.
This places a renewed emphasis on end-to-end network visibility.
COVID-19 laid bare the vulnerabilities of global supply chains. The traditional model, ubiquitous across industry sectors, left organizations little room to maneuver as the pandemic closed factories, locked down cities and cut off critical transport links. They were especially hindered by the lack of transparency and intelligence they possessed about their suppliers, goods or manufacturing processes beyond their first tier.
▉ Insight 2
Increased visibility has become a top priority.
The pandemic has proved to be the wake-up call global industries needed to reconfigure supply chains away from the linear, cost-optimized model and toward networked ecosystems focused on risk management and end-to-end visibility.
A EY survey of 200 senior supply chain professionals found that increased visibility was the No. 1 priority of executives over the next 12-36 months, ahead of reskilling their workforce and reducing environmental impact.
▉ Insight 3
The importance of supply chain visibility isn’t confined to its role in mitigating disruption.
True resilience hinges not only on visibility into interruptions, but also on increased transparency around all opportunities and risks across the network.
A more strategic view of visibility helps enterprises underpin their supply chains with a much more complex and diverse set of value drivers across efficiency, cost, risk and sustainability – all in the pursuit of long-term resilience.
▉ Insight 4
Organizations can build a digital view of extended visibility and a data-driven intelligence base to capture risk across the supplier ecosystem.
This includes suppliers, goods/materials, data and digital technologies.
Network visibility manifests itself across key supply chain domains:
Suppliers: Transparency of the full supplier network beyond the first tier offers original equipment manufacturers (OEMs) better intelligence into short-term, emerging disruptions as well as more strategic supplier risk. Extensive transparency into deep-tier suppliers on a more strategic level can support strategic long-term objectives in network management, such as supplier sustainability, liquidity and regulatory compliance.
Goods/materials: Tactical and strategic benefits also accrue from immediate and extended visibility around the location of goods or input materials across the supply chain. This helps with short-term planning on inventory management while reducing the need for costly buffers around logistics.
Manufacturing: Coordinated intelligence and data on manufacturing enables better access to worker knowledge and more agile decision-making. It also can inform process optimization to help manufacturers mobilize around disruption and ensure a stronger contribution to longer-term value drivers such as cost and sustainability.
Data: The right combination of data will enable organizations to create the extended linkages between suppliers, better understand the composition of finished goods, and assess the efficacy of the manufacturing process. Building digital capabilities starts with making sure supply chain data is accurate, timely and secure, no easy task for chief information officers and chief data officers, but certainly the place to start.
Digital technology: Companies should consider a variety of technologies to improve supply chain visibility, including digital twin, control tower, the internet of things and analytics. Event collection, data-integration technologies and analytics are crucial in making data arriving from hundreds of thousands of sensors throughout the supply chain actionable.
▉ Insight 5
Scenario modeling plays a critical role in improving supply chain effectiveness.
Also among the common refrains sounded by enterprise leaders are the need for end-to-end visibility in their supply chains and the need to better understand demand considering the significant changes wrought by the pandemic.
Many companies are working to cobble these capabilities together with various manual processes and tools, which is an ineffective approach for the long term. The visibility imperative has been underscored as supply chains evolve into supply networks that require greater interdependence among organizations. Scenario modeling is an essential capability in a complex world that’s been rendered even more so by geopolitical turmoil.
