Supply Chain’s Silver Bullet: Visibility

3 minute read

Upland Admin

Manufacturers are working in an increasingly global and complex supply chain environment.  Moreover, manufacturers are under pressure to introduce products more rapidly and to optimize costs, quality, and efficiency. Narayan Laksham, Ultriva’s founder and CEO notes that “The closest any manufacturer can get to the magic bullet is supply chain visibility. Supply chain visibility is needed to achieve manufacturers’ goal of inventory availability and improved service levels.”

Supply chain visibility provides manufacturers with accurate and timely data about the status and location of materials within their supply chain.  Furthermore, it enables manufacturers to obtain actionable information in real-time to support better decision-making.  Together these result in effectiveness and cost-savings.  Here’s how:

Data in Real-Time
Data can be accessed and viewed in real-time thereby enabling manufacturers, service providers, and partners to work together more effectively.  Being able to access data on orders in real-time, for example, allows suppliers to proactively respond to abnormal fluctuations in demand and to eliminate stock-outs.

Eliminates Stock Outs
Parts shortages and stock outs are often due to a lack of visibility; the manufacturer did not know that they were down to the last box of parts.  When shortages and/or stock outs occur, manufacturers are often faced with increased costs due to expedited shipping rates, or even worse – down-time.  When a manufacturer can get alerts on high risk parts in real-time, action can be taken to avoid shortages.

Inventory Reduction
In the absence of visibility manufacturers typically carry “excess stock” to protect themselves from stock outs.  At issue is the reality that most companies have no idea how much of a buffer they have at hand and what it costs the company.  Visibility into inventory enables manufacturers to better understand their replenishment capabilities and therefore optimize the amount of “safety stock” on hand.  By reducing excess inventory manufacturers are able to improve cash flow.

Eliminates Steps
When manufacturers rely on forecasts from a MRP system, augmented spreadsheets are often required.  When this happens, updated information must be communicated and shared with verified partners.  When manufacturers employ a cloud-based portal, all partners are given real-time visibility into the plans, actual consumptions and their replenishments without the need for these spreadsheets being circulated via emails.  By eliminating steps, supply chain is streamlined.

Optimizes Relationships
Being able to track, in real-time, when orders are sent, acknowledged, shipped, received and inspected allows manufacturers to segregate good suppliers from the bad ones.  Manufacturers can easily view the reports and make these reports available to suppliers as well. This eliminates the need for a supplier review.  Instead, both parties can see how the supplier is doing in real-time and identify areas of improvement as necessary.

Addresses Compliance Issues
Companies can also reduce headcount by streamlining the compliance process through the portal. The documents are electronically maintained and available in real time for inspectors and auditors.

When it comes to cost-savings, improved effectiveness and streamlining the supply chain, visibility is the closest thing manufacturers have to a silver bullet.

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