Addressing the Visibility Gap™ within supply chains: Identifying challenges and implementing solutions
Supply chain management is a vast landscape. It is a multi-disciplinary area touching planning, sourcing, production, distribution and customer service. Companies need to strategically and tactically manage numerous individual silos throughout the chain.
Demand forecasting, supplier relations, sourcing, production, transportation and logistics, inventory management, technology integration and risk management are all valuable, distinct and risk-bearing components vital for seamless collaboration and execution.
Many companies are not fully aware of the risks and opportunities to unlock value within their supply chains. Data deserts and systemic blindspots mean decision-making can be compromised. The penalties for getting it wrong are sizable. US retailers alone are estimated to be financing a $2 trillion dollar hole, annually, caused by out-of-stock or overstock.
Strategic solutions can ensure ongoing accuracy and scalability of sustainable operations. Tactical questions can be resolved with quality data and insight, keeping goods flowing and ensuring every investment towards inventory counts.
The resilience imperative for supply chains
More than 57% of organisations are increasing their investments to enhance the resilience of their supply chains (Capgemini 2023).
Disruptions are inevitable, and increasingly varied in nature. The resilience imperative emphasises the need for companies to build robust and adaptable systems. Businesses can prepare for an increasing catalogue of ‘back tests’, but many are investing in resilience in new ways for existing and new assets and operations.
High-performance and high-quality supply chains thrive on deep understanding of the flow of raw materials and goods. Visibility is at the core of this concept. True supply chain visibility gifts organisations a rich, panoramic view of ongoing operations, and potentially a glimpse ‘over the horizon’. Potential bottlenecks and resolutions, process optimisations and strategic options at each stage combine to drive overall efficiency and effectiveness.
In warehousing and logistics, the ability to track inventory with increased precision, and to better monitor shipments and warehouse ops can offer game-changing commercial and financial rewards to service providers and inventory owners.
Why is full visibility so hard to achieve?
One of the fundamental challenges lies in determining what data needs to be collected. The modern supply chain generates an immense amount of data from different sources, making it complex to identify and gather the most relevant and valuable information.
Acquiring data is just the first step; translating insights into actionable insights and strategies is crucial. Many companies struggle with this transition from a systems and resource perspective, creating roadblocks to develop effective strategies based on the acquired intelligence.
Blind spots can emerge at any juncture in the supply chain, from the conceptualisation of a product to its journey to the end customer, making it challenging to track and manage operations effectively.
“We learnt a big lesson: data is very powerful for how we make decisions. We’re trying to pull multiple data points now, and when we have spikes or difficulty in moving products around, the data is critical for us to make decisions on inventory levels, going back and seeing where we need to spend more money. (...) In essence, keep customers happy, keep costs low and keep everything flowing.”
Harry Chase, GE Appliances
The reality of inventory accuracy in warehousing
Interestingly, we often find that the warehouse becomes a focal point where visibility tends to falter. This isn't surprising given it's a hub of numerous processes, people, machinery, and where customers share the same physical space. Warehouses are often susceptible to visibility issues, especially concerning accurate inventory tracking, stock levels, and potential discrepancies between recorded and actual stock.
The complexity of warehouse operations underscores the need for enhanced visibility solutions to address these challenges and ensure a seamless flow of information throughout the supply chain.
In warehouse management, an astonishing 6,000 hours* are dedicated annually to seemingly straightforward tasks such as cycle counts and stock checking. However, our global warehouse deployment experience reveals a stark contrast between perceived and actual inventory accuracy, and consistency between site performance within the same network.
Despite the significant investment of time and effort, these 6,500 hours still often result in data gathered in partial fragments, at a single moment in time. The challenge lies in the constant movement and changes within the warehouse, leading to a disconnect between the perceived accuracy, often based on outdated or incomplete information, and the reality on the floor. This gap underscores the need for more effective and dynamic inventory management solutions that can adapt to the evolving nature of warehouse operations.
The Visibility Gap™ is real and impacts businesses every day
For example, while many customers boast about achieving 99% accuracy, the data collected and fed into DexoryView, Dexory’s digital twin and AI platform, tells a different story. This typically highlights an initial data accuracy range of 91 to 95%.
This discrepancy has tangible consequences, with customers spending an average of 24 minutes** to resolve each discrepancy - a substantial drain on efficiency, especially considering the scale and underlying value of efficient warehouse operations.
Advanced robotics technology offers a promising solution, leading to a rapid increase in accuracy. However, addressing the efficiency drain also demands swift action when discrepancies arise, underscoring the importance of not only improving accuracy but also implementing efficient processes for timely resolution.
Closing the Visibility Gap™ in your operations
Supply chain management is the foundational framework for any business enabling trade in physical goods. The absence of end-to-end visibility, or the Visibility Gap™, creates a range of costs and frictions in the supply chain that no longer need to bear.
Innovative solutions to address these strategic gaps in data, technology and visibility exist today. Rapid implementation to enable more efficient and effective supply chains is possible.
Explore our recommendations and opportunities to close the Visibility Gap™
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* Over 6,000 hours per year wasted on basic stock checks - Unipart Customer Discovery [2022].
** Up to 24 mins to resolve a stock discrepancy - DSV Customer Discovery [2022]
