The lack of transparency is a pretty common problem in businesses' supply chain processes, which often leads to operational losses resulting from disruptions such as cargo theft, fuel theft, and rerouting, among several others. By integrating supply chain visibility solutions with their fleet, businesses can pretty much eliminate the transparency problem in their supply chain as they can track and trace their vehicles in real-time using technology.
A supply chain visibility solution, as the name suggests, provides real-time operational visibility to businesses, in particular, transporters and logistics service providers. This article looks at how improving visibility in the supply chain can help businesses tackle core issues such as transparency and efficiency.
How does a supply chain work?
A supply chain can be simply understood as the entire process of providing the end consumer with finished goods. Let’s take an example of a paint company with local paint shops owned by dealerships as its end customer. To do so, the company needs to procure raw materials for its manufacturing plants. Finished goods from plants are transported to warehouses, further transporting them to local warehouses in different regions. These regional warehouses further transport finished goods to dealerships based on demand. Executing the entire process essentially involves transportation by employing fleets of vehicles and warehousing of goods which forms the basis of any supply chain operation. Supply chain operations are complex, and visibility becomes a significant issue as businesses scale.
The problem of supply chain visibility in operations
To track and trace the product, businesses in the past have primarily employed to manually connect with different stakeholders such as vehicle drivers, warehouse managers, and clients to track shipments. It would provide little transparency in the processes, but it becomes difficult to keep track manually as businesses scale.
Furthermore, the process would become less transparent and inefficient for scaling businesses. As a result, they would find themselves more vulnerable to issues that plague the logistics & transport industry in a country like India, where the entire supply chain process is mostly fragmented. The lack of visibility in supply chain operations can,
- Make businesses more vulnerable to issues like cargo theft and fuel theft
- Wastage of resources due to lack of information leading to frequent rerouting
- No timely intervention in case of disruption such as accident or cargo spills
- Lack of a central system to track and trace reducing transparency on fleet managers end
These issues make the supply chain process inefficient and negatively impact revenues and profits. In addition, high resource intensity resulting from unwanted resource use also makes the supply chain process more polluting and unsustainable in the long run.
The need for real-time supply chain visibility solutions
In the above section we have identified the problem of visibility in the supply chain process as well as have briefly discussed the consequences of it for businesses.
- The supply chain process is complex and defragmented and as a result is not very transparent.
- Lack of transparency can hamper the efficiency and resource utilization for businesses impacting revenues
- Lack of transparency also makes businesses prone to disruptions such as fuel or cargo theft.
- Manual track and trace method is tedious and resource heavy and is counter productive for scaling businesses.
Businesses can look out for supply chain visibility solutions to tackle the lack of transparency in the supply chain process. It does so by enabling fleet management in real-time from a centralized space. How is that even possible? A simple method is through the digitalization of the supply chain process, which is being adopted across the industry.
By upgrading fleets with tech-enabled hardware such as a GPS tracking system or a telematics system and integrating the software in their supply chain management system, businesses can digitize their entire operation. Digitization of supply chain management will allow businesses to track and trace the movement of the entire fleet in real-time, which means they can have complete transparency in their supply chain process through software, anytime and anywhere.
How will a supply chain visibility solution work?
Businesses are currently using several kinds of supply chain visibility solutions based on their requirements and the industry they operate. The most commonly used supply chain visibility solution is the GPS tracking system used widely by transporters and logistics operators to track their fleet movements.
Every vehicle in the fleet is fitted with a GPS tracking system (BlackBox in case of a fully-integrated telematics system) which collects and transmits location data to the main server. The data is processed into a usable format through the software and is accessed by the end-user. In this case, the end-user is the fleet manager.
Some basic supply chain visibility technologies to know
The number of tech-based solutions that improve visibility in the supply chain process is ever-increasing. However, some key technologies form the basic blocks of every software or solution in this space.
- Radio Frequency Identification or RFID are used in stationary facilities to track movement of vehicles by scanning tags (or unique IDs) provided to individual vehicles.
- Global Positioning System or GPS uses receivers that transmit and receive signals from a network of satellites and provide location data in real-time.
- Telematics softwares offers the ability to track vehicular data which are not limited to just location digitally to the end users.
- Application Program Interfaces or APIs make it possible for multiple internet-based applications to interact with each other.
- Transport Management System is a system employed by businesses to track and manage their entire transport operations from loading to delivery.
How does a supply chain visibility solution benefit businesses?
Every transporter or logistics service provider will agree that being able to track and trace their entire fleet in real-time without increasing their labor force is nothing short of a miracle. However, the margin of benefits from integrating operations with a supply chain visibility solution depends on the industry a business operates in and what software or technology they employ in their day-to-day operations. Let’s look at some benefits of supply chain visibility solutions in brief.
Making transportation more consumer friendly and accessible
Supply chain visibility in the transportation industry can make the business or service more customer-friendly. In the case of D2C businesses like e-commerce, supply chain visibility solutions make it possible for customers to track their shipments in real-time. In addition to that, businesses can also offer clients the accurate estimated time of arrival or ETA and inform them in case of unforeseeable delays, which further improves communication and consumer-business relations.
Using data to provide insights and improve operational efficiency
AI-driven supply chain visibility solutions use available data and provide critical insights to users to help eliminate inefficiencies in the process. Using AI can also help predict demand, provide the most efficient and cost-effective routes, and improve day-to-day operations using digitization and technology.
Improve sustainability in supply chain operations
Supply chain visibility solutions such as a telematics system can make supply chain operations more sustainable by improving particular processes' resource utilization and reducing resource intensity. Examples include eliminating unwanted rerouting and route planning to reduce fuel usage reducing emissions.
To conclude, by integrating tech-based supply chain visibility solutions, businesses can not only improve transparency in their operations but, in fact, positively impact their business operation by improving efficiency, reducing disruptions, automating processes, reducing compliances, and so on. For example, suppose one wants to look at the true impact of business supply chain visibility. In that case, they can look at the supply chain process of paint giant Asian Paints, which implemented technology to improve supply chain visibility much before their competitors. Today, they have one of the most efficient supply chain systems in place.
What is a supply chain solution?
A crucial link between production and consumer delivery of the good or service is the supply chain solutions. Businesses may successfully meet client demands with the aid of an effective and seamless supply chain system.
What is Supply Chain Visibility Software?
Access to real-time data on the order process, inventory, delivery, and potential supply chain disruptions is known as supply chain visibility, and it is available to all stakeholders. A major issue is the lack of inventory visibility and B2B transaction transparency.