Benefits Of Supply Chain Visibility

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Supply chain visibility, a term that like two sides of coin brings with it potential for tremendously improved supply chain performance on one side and a level of vagueness & uncertainty on other side. The concept of supply chain visibility in late 1990’s and is still new to many organizations. Art Mesher, then an analyst at Gartner gave the concept of “The 3V’s of supply chain”. The 3 V’s of supply chain stands for velocity, variability and visibility. Corporates and companies have worked upon the velocity and variability of supply chain but still have very little understanding of visibility.
Visibility not only means on-shelf inventory but also means inventory piled up at all levels of supply chain including in transit inventory and inventory piled up across company’s network. Visibility allows concerned people in supply chain to forecast problems before they occur and taken necessary steps to avoid expense in the real time. Two drivers of this savings through visibility come from PO lifecycle and ASN (Advanced Shipped Notice, Inventory) accuracy.

Figure Source: Supply Chain Digest Letter, April 2012
Supply Chain Visibility Vectors – A case of Reliance Fresh
Visibility vectors are basically the factors that affect the visibility of products and services across various layers of organization’s network. We will take the case of Reliance fresh stores as example for better understanding of supply chain vectors. There can be seven major vectors which are as follows:-
(a) Demand Management
(b) Supply Management
(c) International Sourcing
(d) Domestic Sourcing
(e) Inventory
(f) Distribution and Logistics
(g) Risk Management
Demand Management
Proper demand management with proper demand forecasting based on ...

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...here are different logistics partners even within the same cities. It makes difficult to estimate the in transit inventory. There is no sharing of data between logistics partners which makes demand and supply estimation more difficult.
Earlier Reliance had a dedicated Reliance Logistics as their logistics partner but it could not survive for long. There should be uniform dedicated logistics partner at least on city level as it will increase the response time and information can easily be shared about the demand and supply.
Risk Management
Constant review of risk management and mitigation plan both at strategic and tactical level should be done depending upon the degree of risk involved in the business and the nature of the product.

Based on the above mentioned secondary research, the following supply chain visibility matrix for Reliance Fresh has been suggested.

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