Visibility: transforming supply chains and warehousing

In the last four years, the supply chain and warehouse industry has gone through a remarkable transformation, showing how essential it is to everyday life. Everything in your room or office once passed through a warehouse. Warehousing’s role in linking supply with demand is pivotal. 

Ensuring timely, problem free delivery to consumers hinges on effective warehousing, yet businesses risk high costs from inventory errors. In the US, retailers alone face an estimated annual loss of $2 trillion due to inventory inaccuracies. 

The modern warehouse: a hub of constant activity

Today’s warehouses are dynamic environments operating around the clock, with goods moving in and out at speed. In such a complex, fast moving environment, the wrong inventory levels rapidly lead to customer dissatisfaction and employee frustration. Addressing challenges in demand forecasting, supplier management, production efficiency, inventory control, and technology integration demands perfect collaboration across systems.

The 2020 pandemic sped up the global shift towards eCommerce, raising consumer expectations of swift, hassle free deliveries in the process. Warehousing has become even more crucial in supply chain management and the global economy, driven by growing demands. 

The role of visibility in supply chains

Warehouse Management Systems (WMS) are considered the heart of warehouse operations. However, errors in stock counts and poor use of physical space can create visibility gaps. Accurate information is vital in today’s competitive market, making visibility a cornerstone of operational resilience. Visibility entails real time tracking and monitoring of goods, information, and resources at various stages, giving businesses a competitive edge. Yet only 6% of logistics companies achieve full operational visibility.

Achieving full visibility involves real time tracking of goods at every stage. It also means generating insights to support proactive decision-making and collaboration among supply chain partners. A comprehensive view enables organisations to identify bottlenecks, improve processes, and enhance overall efficiency in the operation. Tracking inventory, monitoring shipments, and managing operations precisely demonstrates visibility’s transformative power. 

Identifying blind spots

Visibility gaps can disrupt the entire supply chain, and often centre on warehouses. These busy hubs can suffer from mistakes in inventory tracking and discrepancies between recorded and actual stock. Addressing these challenges requires knowing which data to collect and turning it into usable strategies.

Acquiring data is only the first step. The true value lies in translating it into insights and actionable strategies that drive business forward. 

Understanding the visibility gap in warehousing

Modern logistics operations are complex, involving numerous stakeholders and often fragmented, legacy systems. Data silos hinder real-time tracking and monitoring. Achieving full visibility demands a seamless flow of data.

The root cause of the visibility gap is related to data. Several factors cause the fragmentation of data, but three main reasons are:

1. Fragmented systems: Disjointed systems create data silos that impede information flow.
2. Inefficient communication and human error: Delays and inaccuracies in information sharing exacerbate visibility gaps.
3. Legacy technologies: Outdated systems lack the capabilities for real time data exchange.

Implications of the visibility gap for businesses

A lack of visibility leads to several inefficiencies and risks:

• Increased operating costs: Inefficiencies, excess inventory, and disruptions raise a business’ costs and affect its profits.
• Customer dissatisfaction: Delayed orders and stockouts can damage a business’ reputation and lead to dissatisfied customers.
• Risk exposure: Limited visibility hinders effective risk management, leaving businesses vulnerable to unforeseen challenges. 

Closing the visibility gap

Annually, 6,500 hours are spent on tasks like cycle counts and stock checking, yet data is only partially gathered, quickly becoming outdated. To close the visibility gap, businesses should:

1. Real-time data: Invest in integrated systems for instant updates on inventory, order status, and shipment tracking.
2. Advanced analytics and predictive monitoring: Use AI-powered analytics to anticipate demand, optimise inventory, and identify bottlenecks.
3. Technology infrastructure: Upgrade and integrate technology within the warehouse, including WMS, IoT devices, and cloud-based solutions.
4. Collaboration: Foster collaboration with supply chain partners through shared platforms and standardised data protocols.
5. Employee training and change management: Train employees on new technologies and implement change management strategies.
6. Continuous improvement: Cultivate a culture of continuous improvement, regularly refining processes based on data analytics and feedback.

The visibility gap presents significant challenges in an increasingly complex environment. Supply chain professionals must adopt innovations that provide continuous real-time data. Deploying advanced technologies enhances operational efficiency and ensures end-to-end visibility and data accuracy, serving as a strategic tool for proactive decision-making.