Visibility In Supply Chains Is The Key To Resiliency

Visibility in Supply Chains is the Key to Resilience

Supply chains have had a tough time in the last couple of years. These were probably the most challenging years supply chain managers had to deal with in their careers.

Many vital suppliers shut down, ports congested, and shipping prices skyrocketed. Overall, the effect of supply chain disruptions on international trade was devastating. For Europe alone, this cost reached €112.7 billion in lost GDP in 2021. At the same time, the Russo-Ukrainian war is expected to aggravate the situation further with more GDP losses in 2022.

According to Accenture, a way to deal with this situation is through greater visibility in supply chains. They support that companies with more visibility can face all types of disruptions better. In the same research, it is found that visibility is divided into two different types: structural and dynamic. Let’s find out what their differences are.

Structural visibility

Structural visibility shows the location of suppliers. This entails their manufacturing locations, the routes they follow, and their interdependencies in the supply chain network.

Structural visibility usually comes through frequent network mapping, risk management, network simulations, optimization, and modeling. These are great for this job, but they became more frequent during the pandemic.

Other ways to improve structural visibility are also using new technologies like the digital twins that replicate the existing supply chain network. With the help of analytics, businesses can use these digital twins to check for the risks and weaknesses of their supply chains.

However, structural visibility does not cut it. Yes, it can help find weak points in your supply chains, but it is time-limited.

Dynamic visibility

With dynamic visibility, firms can monitor and respond to events in real-time. They know where their products are, how operations are going in plants and warehouses, where there are disruptions, what they disrupt, and how.

Businesses can have dynamic visibility in their supply chains with a supply chain control tower tool. It enables you to autonomously monitor, forecast, prescribe, and execute across your supply chain.

The most important part of dynamic visibility is execution. Firms can either act on any arising issue manually or have control towers act autonomously with the help of AI, ML, and RPA. That way, supply chain managers who have access to this tool can come back faster from disruptions or avoid them altogether.

How to build resilience through visibility

While structural visibility is required for good supply chain resilience, the objective should be dynamic visibility. Most businesses monitor demand and supply and utilize data predictively, but prescriptive usage provided by dynamic visibility is still uncommon.

Αutonomous execution is the least used kind of dynamic visibility. Companies claim to employ it for internal operations, suppliers, and customers but have yet to apply it to external events. However, precisely this predictive visibility and autonomous execution, directed by a smart control tower, are the keys to maximizing resilience.

Companies must establish new capabilities to analyze where they are most susceptible and monitor what is happening across the extended supply chain as they transition from centralized, linear supply models to decentralized, flexible and efficient supply networks. With this level of insight, supply chain executives will be able to recover faster from interruptions or perhaps avoid them entirely, regardless of how many are thrown their way.