The Main Blind Spots in Supply Chain Management and How to Address Them
With the advancement of technology, businesses can identify blind spots in their supply chain management much easier, as well as find solutions to deal with them.
Not many years ago, substantial physical and temporal gaps separated supply chain’s activities from manufacturers and customers. Currently, the advancement of technology, especially software applications, has brought supply chain management blind spots much closer to the attention of transportation companies and anybody involved in logistics processes.
The COVID-19 pandemic has uncovered the vulnerability of supply chains globally. The need for visibility over the entire ecosystem, as well as the ability to react to changing demand is more vital than ever. Essential considerations at a time when the world’s economy may be significantly impacted include having sufficient controls, business standards, and everything else that helps to avoid suffering from supply chain disruptions.
Everlasting visibility challenges
A company achieves supply chain visibility when it can to track products in transit while having a clear view of the warehouse, yard, and other activities. It allows for improved customer service and cost controls via online inventory management, proactive status updates, and risk mitigation. As a result, the supply chain management process becomes absolutely clear with a minimum of blind spots.
In reality, lack of visibility and supply chain disruptions keep bothering most modern businesses. According to the research among US-based businesses, only 6% of companies enjoy complete visibility on their supply chain and 69% do not have total visibility.
How can businesses achieve higher visibility? If supplemented with collections of user data, they can manage their supply chains as efficiently as possible. Effective supply chain management can help gain advanced data on how the entire process works while minimizing possible risks.
Before we name the biggest blind spots in supply chain management, let’s look at some of the common challenges that companies should be aware of:
- Sharing information. Having a system that requires sharing data between the tiers of a supply chain. If that cannot be done, you will not see the full picture. Ensure that your system enables real-time visibility in a single platform.
- Tracking issues. The lack of visibility on particular stages of supply chains is often associated with inadequate tracking software. In general, logistics tracking custom software needs to be implemented on the whole chain’s length: from inventory tracking that sends updates on the warehouse situation to disruptions alerts for weather, traffic, and other on-road events. Covering everything is a huge challenge when it comes to connecting solutions that control separate supply chain stages.
- Having the ability to analyze a lot of data. Without having an understanding of what data is helpful and what data can be ignored, visibility will never have the best possible impact on your supply chain. Awareness of its different tiers and disseminating the relevant info can go a long way. Some applications enable shippers to make smarter business decisions with relevant data in a real-time mode. It helps foresee any challenges and react in a less randomized way, create unity via the supply chain, and increase collaboration to deliver goods on time.
Critical blind spots in supply chain and ways to avoid them
The dispersed nature of modern supply chains increases levels of risk for businesses, making visibility critical. Without having a clear vision of supply chains, executives potentially have a substantial blind spot in their enterprise risk management structure, from which considerable legal, financial, and reputational threats could emerge.
Supply chain transparency is not easily achieved—it demands a strong foundation and continuous improvement. Let’s look closely at 5 crucial blind spots that companies often encounter during the process of building a transparent supply chain in the current global environment.
1. Blind spots in the warehouse
Lack of insight into inventory is a problem not only for retailers. Whatever a company’s place in the supply chain is, accurate inventory data is essential. Given the proliferation of online selling, customers want to know what is in stock. Furthermore, they do not want to place an order for in-stock wares they expect to arrive the next day only to find out that it is stuck on backorder for the next two weeks.
Having the right inventory management approach is also crucial for manufacturers who need to allocate materials and plan production accordingly. For e-commerce and direct-to-consumer shippers, having accurate inventory information allows them to share real-time availability with customers to avoid warehouse blind spots. Inventory on the supplier side as well as on the retailer side, together with inventory in transit, must always be the priority for distributors.
When businesses are blind to inventory figures and movements, they cannot make meaningful decisions on how much to produce, store, or sell. It results in either empty shelves and long lead times or unsold excess. Inventory control software solutions bring real-time data on inventory management, with special emphasis on avoiding inventory stock-outs and shortages.
2. Blind spots in the process of delivery
When it comes to container shipments, miscommunication is one of the biggest challenges. It is often the case when companies rely too much on carriers and freight operators for updates. There is a chance that bad communication between you and customers can occur, which can be fatal to your relationship.
The solutions to the supply chain tracking issues are often custom software applications that track shipments in real time. Such apps then share tracking data with the customers for their specific deliveries. With this data, the supply chain is made transparent, and trust is built.
Besides, security is a major concern for logistics companies. With shipments moving through many hands before arriving at the destination, they become a target of malicious individuals. Therefore, security is a key challenge that must be addressed immediately. Shipments may be compromised at any point: at the warehouse facility or during the exchange to another truck. Without visibility, security can be broken, and products can be spoiled. Software solutions allow them to keep track of the shipment at all times. Real-time movement and auto-update systems provide the necessary tools to see the entire picture of the supply chain.
3. Blind zones to control the location of the vehicle
Unpredicted incidents happen with little or no notice. There is a scant timeframe to prepare, so shippers have to make quick and effective decisions to mitigate the effects and control the related costs. When such events happen, shippers are forced to implement emergency contingency plans or manage as much as they can if they do not have a plan or have decided to wait and see. The costs can be very high since, in many cases, the final solution is to expedite via air freight.
Thus, to be effective, supply chain management requires accurate, timely data on the location of their freight and the nature of the issues. Drivers’ shortage has always been a challenge for logistics strategists, but the problem only deepened after the pandemic’s beginning. Additionally, there is a need to monitor drivers’ location to prevent delays or in case of an emergency. There are tracking solutions in the form of tracking apps that are being installed on a driver’s phone to follow their locations and health conditions, making sure that they do not experience issues preventing them from fulfilling the freight tasks.
Additionally, transportation management software solutions can prepare shippers for unexpected on-the-road problems. This technology improves contingency planning and assists shippers with responding effectively in concerning situations by providing timely data and fostering cooperation with trading partners.
To avoid highly consequential uncertainty, logistics companies use AI-powered alerts and actionable insights from cycle-time forecasts that utilize machine learning, pattern detection, and historical tendencies to identify anomalies and predict future events.
4. Blind spots when loading and unloading goods
Shipping and receiving facilities are particularly essential areas given how much activity takes place in a confined space. The process may involve truck loading, unloading, staging, inspections, and many more. There are people such as order pickers, drivers and inspectors potentially in the mix. In a typical warehouse, the docks take up a quarter of the square footage but host most of the activity. At times that activity can be fast-paced, therefore, creating numerous blind spots. Moreover, there is a number of possibilities for accidents.
If real-time visibility is lacking in your loading facilities, then you likely do not utilize optimized custom management software. On the other hand, if you do have software solutions but no real-time visibility, then there is a need to get a system that covers blind spots in your supply chain management. A proper management system must have every solution required to get the job done right, while having full real-time visibility that allows you to see what happens on the facilities, starting from the gate to the warehouse doors.
There are multiple ways to how custom software solutions provide an improved visibility into your operations. For example, workflows with barcode scanning, software integration with warehouse management systems and transportation management systems, and task automation that does not require staff to conduct manual checks. Also, technologies including radio frequency identification (RFID) tagging or aerial drones greatly enhance your loading operations.
5. Supply-demand mismatches
The lack of clear demand visibility leads to increased inventory levels at different points in the supply chain. The ability to react to changing demand swiftly and more sharply is more vital than ever. Businesses need to form a digital supply network, which allows for collaboration with partner systems to make sure data flows smoothly and rapidly.
Supply chains need to change and shift to meet changing customer needs. Full visibility into supply chain management processes, with the help of a supply chain consultant who has seen numerous examples of this in action, helps you understand what you need to do to align your supply chain to meet demands. By definition, customer behavior is unpredictable, thus requiring comprehensive analytics, often in a form of multiple solutions used simultaneously.
As satisfying market demand vastly depends on your business partners that supply, for instance, product components, you may consider implementing custom software that enables the automatic exchange inventory data with your partners in real time. It creates an ecosystem for lean, smooth market operations where suppliers, vendors, and distributors can switch rapidly to respond to inventory changes and buyer behavior. In turn, it allows partners more accurate forecasting, optimized shipping, and useful features such as setting goals for inventory turnover, trucks fleet usage, and then seeing how the results compare with reality.
Blind spots in supply chain management affect any industry that involves logistics. During the product’s lifecycle, there are so many areas for disruptions that it is nearly impossible to predict all possible issues. However, even the unplanned can be planned – modern software applications offer solutions that increase supply chain visibility to the heights where you can see every single detail, gather real-time data, and make informed decisions.