Infinite visibility

Even before the COVID-19 crisis, calls for end-to-end supply chain visibility were common among internationally operating manufacturing companies. Indeed, for most businesses, visibility did not extend beyond their own perimeter fence in practice. Supply chain software vendors further fuelled this desire by loudly proclaiming everywhere – both at trade shows and online – that such visibility was finally technologically available.

The extreme demand volatility and delivery uncertainty during the pandemic showed that the visibility left a lot to be desired. This was further underlined by the arrival of some black swans, including the Russian invasion of Ukraine and the escalating Gaza conflict. As a result of all this, the reliability of expected arrival times of trucks, goods trains, container ships and even air freight turned out to be quite low.

Survey end-to end visibility

Last summer, I conducted an international survey together with Buck Consultants among 123 supply chain executives from mostly large multinationals on the current status of their end-to-end visibility. Less than 30% said they had complete visibility.

Interestingly, 70% cited an increase in supply chain resilience as the main reason for wanting visibility all the way from raw materials to customer demand. Despite the high inflation of the past few years, the third highest-scoring reason (with 59%) was to reduce operational supply chain costs.

Demand sensing

Personally, I was particularly curious about the survey responses of the 19 companies with a supply chain maturity level of 4 or 5 (the highest). These companies have a significantly stronger ability to analyse transport costs, especially since they can now track shipments with dynamic arrival times. This makes them more effective at saving operational costs and reducing inventories.

But much more notably, most of these mature companies are using demand sensing in their sales channels to predict actual customer demand, in addition to tracking current supplier capacity. Medium-term tactical insights into strategic suppliers and key customer groups make the key difference in maturity. Because knowing where to look is more important than having an infinite field of vision.

Martijn Lofvers, Chief Trendwatcher Supply Chain Media
martijn.lofvers@supplychainmedia.nl