The Value of True Supply Chain Visibility

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Most supply chain professionals are familiar with track and trace, and are frequently asked to answer the age-old question, “Where is my container?”

The Value of True Supply Chain Visibility
Photo by Victoire Joncheray on Unsplash

But this question alone is not enough for global organisations. Read on to understand why container tracking alone has become insufficient, what true supply chain visibility really means, and the key drivers for achieving ROI.

What is supply chain visibility for international shipping?

Most supply chain professionals are aware of the intricacies of tracking and tracing their shipments. This can include back and forth emails and phone calls and constant communication with carriers. But it often has more layers of complexity especially when it comes to traversing countries, borders and bodies of water. And many times, these are multimodal shipments, including ocean, dray and rail.

In a recent survey by Reuters and FourKites of top European supply chain leaders, 67% of respondents indicated that their biggest pain point in transporting goods was end to end freight traceability. When asked about dwell time and detention costs almost 40% agreed that these are key challenge.

Understandably, organisations want to know where their containers are during different stages of the journey, but what is missing is the complete process flow prior to departure. This is where true supply chain visibility comes into play. There are complexities around rates and bookings, the estimated time of departure (ETD) and estimated time of arrival (ETA) of vessels, and document management that organisations want deep insight into. With true supply chain visibility, you can analyse the best rates, receive booking support, manage your documents for the vessel’s journey and track your containers throughout the ocean journey.

What is the value of supply chain visibility?

A primary driver for organisations implementing supply chain visibility is that they want to see true ROI. Key challenges for organisations include booking properly, lowering transportation costs, exception management, and capturing accurate documentation. Supply chain visibility can solve for all of these pain points. By knowing exactly where your container is — from booking through arrival — organisations can achieve operational efficiencies and proactively avoid problems when they arise.

One particular solution is exception management. True supply chain visibility providers give you visibility across the entire journey of your goods, and notify you when issues occur — whether it is weather, port congestion, delays or dwell times. Organisations can then proactively change their bookings, routes and more, saving time, transportation cost and demurrage and detention fees in the process.

The top-3 drivers of supply chain visibility

There are three key drivers for visibility. These include:

  • The most obvious value drivers for supply chain visibility are the operational efficiencies. When supply chain professionals are spending countless hours tracking down a container via emails, phone calls and communication with carriers, having real-time tracking for that container provides immediate value for the organisation in operational efficiencies and time savings.
  • Another key value driver is revenue and profit. With supply chain insights, organisations will have more control over inventory planning, resulting in less safety stock and, consequently, more profit. Additionally, this visibility can result in higher OTIF rates and a higher customer satisfaction. According to a McKinsey study, the US food retail industry loses an estimated 2-3% of sales every year due to stockouts and unavailable inventory.
  • A final value driver that organisations can see with true supply chain visibility is cost reductions. These can come in the form of reduced freight spend with better ETAs and exception management, reduction in demurrage and detention fees, and operational efficiencies. These improved margins ultimately provide competitive differentiation for those organisations with complete visibility from booking through delivery.

With true supply chain visibility organisations can realize great value from booking through arrival in the form of operational efficiencies, profit and cost reductions. Organisations who invest in supply chain visibility will realize competitive advantages for their international shipping processes, especially during these times of heightened supply chain disruption.

Photo by Victoire Joncheray on Unsplash

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