How to achieve better supply chain visibility

  • Written by Peter Needle
  • Published on 27 July 2015
  • Blogs

Achieving supply chain visibility can be difficult in the modern supply chain, but new research suggests that it’s a team effort.

Supply chain visibility benefits

The Chartered Institute of Procurement and Supply (CIPS) recently carried out research with a number of UK supply chain and procurement professionals, and discovered that only 11%have a close relationship with suppliers across all tiers of their supply chain.

According to the study, 56% of these businesses claim to have complete supply chain visibility, while just 13% of companies who work closely with tier one suppliers only believe they have transparency.

By developing strong relationships with suppliers across multiple tiers, businesses are therefore four times more likely to have complete visibility over their supply chain. They are also 1.5 times more likely to have avoided a major supply chain crisis in the past 12 months, and three times more likely to be sure that there is no malpractice in their supply chain.

So why aren’t more companies building bridges with their suppliers and improving supply chain transparency?

Supply chain visibility challenges

Supply chains are more complex and fragmented than ever, and this makes it much more difficult to achieve transparency. Global sourcing trends mean that a product is often produced across multiple continents, with items sourced from a huge number of suppliers.

The more suppliers there are feeding into a production line, the harder it is to monitor the supply chain and enforce compliance standards.

David Noble, CEO of CIPS, explains:  “As UK companies are increasingly using suppliers in emerging markets to maintain their price competitiveness, they are becoming more exposed to reputational risks such as poor health and safety standards for workers or even enforced slavery, bribery and corruption, as well as environmental degradation.

“Having visibility and strong supplier relationships at the first tier of the supply chain is clearly no longer enough, as these risks do not always exist in the first tier, but often further down supply chains.”

Supply chain visibility solutions

While businesses can outsource production, they can no longer afford to outsource their reputation to a collection of unknown suppliers. By developing positive working relationships, companies can develop trust and enforce standards throughout their supplier base.

In the case of many complex multiple-tier supply chains, it’s not always possible for employees to manage these contacts manually. Thankfully, Segura supply chain technology can help to manage these connections.

Segura allows companies to place orders within a framework of pre-approved suppliers, and keeps any sourcing or subcontracting within this same framework. Each approved supplier is already audited, and real time alerts will be sent if any orders are fulfilled by an external party.

An online audit trail is created throughout each ordering process, tracing a product’s journey through the supply chain and identifying every supplier for every component within that product who is involved in its supply chain and production. This transparency allows companies to see exactly which suppliers they have a working relationship with, drawing out a blueprint across all tiers of the supply chain.

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