Supply Chain Visibility is a hot-topic, and, as reported in this article in Logistics Management on Defining Visibility late last summer, was the hottest project in 2011 according to a Capgemini Consulting study. Fast forward to 2012, and visibility is a term I’m hearing from at least every other vendor as a selling point of their supply chain services and solutions.
Thus, at this point, I have to ask — what, pray tell, is visibility? When we look up visibility, the first definition returned from dictionary.com is the state or fact of being visible, which isn’t very useful since visible is defined as that [which] can be seen. So what do we have to see?
Well, if you talk to a software-based solutions vendor, we have to see the data. Specifically, data on where your order is in terms of production, shipment, or delivery. And this is good, but it’s not enough. While this will tell you that production on an order is three (3) days behind, it won’t tell you why. Is the plant recovering from a backlog, and about to put your order into overtime production tomorrow? Are they suffering from a worker shortage, or strike, and your order is delayed another week? Or have the components and/or raw materials not yet arrived? And if it’s the latter situation, why? Is it a transportation delay? A production delay? Or a raw material shortage that may take months to correct? So you need visibility into the status of your order and all of your supplier’s orders that impact your orders. But this isn’t always enough.
While it would be great to know as soon as a delay occurs that could potentially impact your supply chain, and give you more time to respond and potentially create and/or implement mitigations and counter-measures (such as finding an alternate source of supply or stepping in to help the supplier solve the problem), this still doesn’t give you any indication of problems that could be brewing. That’s why other vendors try to sell you risk-focussed data solutions such as financial viability reports (from credit-based data) and activity reports (from import/export data). But these solutions only allow you to judge supplier viability, they don’t allow you to determine if an external event in the supplier’s locale (such as war breaking out or a likely natural disaster) could take the supplier out even if they are financially viable and low-risk from a business perspective. So other solutions try to sell you country-based risk assessment solutions with data on each of the locales you are doing business with. And this is a type of visibility. As are sustainability tracking solutions which track sustainability data (with regards to environmental, legislative, and other types of compliance data) to try and predict current and future supplier health based upon a sustainability score that goes beyond pure financial data. And this is another type of visibility.
And if you had all these solutions, you could certainly argue that you had supply chain visibility, but the question is, how complete is it? How much do you need to see to be confident that the chances of an unpredicted event are sufficiently low and/or the chances of you not knowing about an unpredictable event soon enough to implement mitigations are sufficiently low? It’s hard to say. It probably depends upon your operation, your risk exposure, and the strength of your supply chain and supplier relationships.
Regardless, visibility is a concept that is hard to narrow down and no one approach completely solves the problem. Keep that in mind when evaluating solutions on the strength of their visibility.