Airline pilots depend on it, politicians crave it, and supply chain managers need it. What is it? Visibility!
Dictionary.com defines visibility as “the state…of being visible” and “the ability to give a relatively large range of unobstructed vision.” Both are relevant to the supply chain professionals responsible for managing product flows and demand fulfillment. Supply chain visibility helps managers make informed decisions, recognize and respond to disruptions, and positively impact financial performance.
Despite its importance, supply chain visibility remains somewhat of a buzzword. It is commonly dropped into conversations and presentations without much detail or substance.
To get realistic insights into this topic, I recently talked with supply chain experts and reviewed current industry studies. The good news is that the experts have moved beyond the buzzword stage with definitions and strategies that converge on credible goals.
The Council of Supply Chain Management Professionals glossary defines supply chain visibility as “the ability to access or view pertinent data or information as it relates to logistics and the supply chain, regardless of the point in the chain where the data exists.” Their interpretation focuses on knowledge accessibility.
Dan Vache, Vice President, Supply Chain Management for United Fresh Produce Association, defines supply chain visibility as “the ability to access relevant logistics information about products from the point of production until it reaches the customer.”
To this definition, Dr. John Langley of Pennsylvania State University adds a temporal component: “visibility most commonly refers to having knowledge of where individual shipments are in the supply chain at any point in time.”
At the website www.supply-chain-visibility.com, Jonah McIntire of Manhattan Associates defines supply chain visibility as “the practice of capturing and interconnecting data, creating intelligence, and altering decisions based on the three cross-organizational flows in the supply chain: materials, capital, and information.”
McIntire also provides an interesting supply chain visibility model to highlight various perspectives of visibility. He argues that supply chain managers should adopt the process view of visibility to make it actionable and measurable.
Vache agrees, stating, “We can collect a lot of data, but it is a matter of turning the data into information that is usable for managing logistics challenges, squeezing cost out of the supply chain, and reducing waste.”
Langley cautions against misguided visibility ventures. “Visibility for its own sake provides no value,” he states. “The objective is having information available so managers can take action when needed.”
These definitions highlight supply chain visibility as providing real-time, accurate, and usable information about product, processes, and flows. In a perfect situation, there are no blind spots or data-sharing delays. Information is readily accessible from anywhere in the supply chain for decision makers.
So, how can supply chain professionals best use this information? The experts and current research suggest that visibility supports supply chain planning, execution, and competitive advantage.
Demand planners rely heavily on visibility to match supply and demand. It is crucial to get timely, accurate updates regarding product availability so that planners can adapt to the over/under supply and quality of product, according to Steve Roosdahl, Corporate Supply Chain Manager at the Oppenheimer Group. Roosdahl states, “Visibility helps us strike a daily balance between sourcing to fill customer demand if we are undersupplied or find customers for excess product when volume exceeds forecast.”
“Visibility within an organization is beneficial for managing the fulfillment process,” says Ed Treacy, Vice President of Supply Chain Efficiencies for the Produce Marketing Association. “I have to know what’s not happening when it’s supposed to be happening. Give me the lead time to react as soon as you know of a problem.”
In its study Supply Chain Planning Mastery, Accenture highlights the importance of supply chain visibility in creating competitive advantage. Supply chain masters—the small minority of respondents that excelled at planning—collaborate extensively with business partners. This leads to greater visibility and strong sense-and-respond capabilities that improve reaction time to unplanned events. Such capabilities are critical to maintaining competitive advantage and leadership.
Despite these highly relevant opportunities, the IBM 2009 Chief Supply Chain Officer Study found that many organizations struggle to harness the potential of visibility. While visibility is a top concern, it is low on their priority list. Why? Some respondents said that creating visibility is costly, difficult to implement, and they are too busy to deal with it.
The ability to overcome these challenges is what separates the masters from the laggards in the Accenture research. This topic—making visibility a reality—will be addressed in my next posting. We will take a look at the technologies and best practices available for harnessing the value of visibility.
In the meantime, let me know what you think about visibility. Is it a real opportunity or just another “pie in the sky” concept that can’t be implemented? I’m interested in your feedback.