Why is Supplier Visibility Critical?

Supply chain visibility refers to the ability of a company or organization to track and monitor its supply chain from the point of origin to the point of consumption. It involves gaining real-time insights into the movement of goods, inventory levels, and other critical information across the supply chain.

With supply chain visibility, companies can identify potential disruptions, delays, or other issues in their supply chain and take proactive measures to mitigate them. This can include rerouting shipments, adjusting production schedules, or communicating with customers and suppliers to manage expectations.

Importance of Supply Chain Visibility?

There are many benefits to having a high level of supply chain visibility. For example, it can help companies improve operational efficiency, reduce inventory costs, and enhance customer service. It can also help companies identify and address issues related to sustainability, such as reducing carbon emissions or improving labor practices in their supply chain.

Supply chain visibility is also critical to a robust supply chain risk management program (SCRM). SCRM is the process of identifying, assessing, and mitigating the risks and vulnerabilities that may occur in a business's supply chain. This involves evaluating the potential risks that can disrupt the flow of goods and services from suppliers to customers and implementing strategies to minimize the impact of those risks.

The risks that may arise in a supply chain can include disruptions due to natural disasters, political unrest, economic changes, quality issues, supplier bankruptcy, or other unexpected events. By proactively managing these risks, businesses can minimize their negative impacts and maintain continuity in their operations.

Supply chain risk management typically involves a combination of risk identification, risk assessment, risk mitigation, and risk monitoring. This can include strategies such as diversifying suppliers, increasing inventory levels, developing contingency plans, and implementing technology solutions to better track and manage the supply chain. Effective SCRM can help businesses improve their resilience and minimize the impact of supply chain disruptions on their operations, customers, and bottom line.

What is Supplier Visibility?

Supplier visibility is a specific aspect of supply chain visibility and is critical to a robust SCRM program. It is the ability of a company or organization to track and monitor its suppliers. This involves gaining real-time insights into the activities, performance, and risks associated with suppliers and their compliance with ethical, environmental, and social standards.  

Supplier visibility can help businesses:

• Improve supplier performance: By having visibility into their suppliers' operations and processes, companies can monitor and evaluate supplier performance, identify areas for improvement, and work collaboratively with their suppliers to address them. This can improve quality, delivery times, and overall supplier performance.
• Reduce supply chain risk: Supplier visibility allows companies to identify and manage potential risks associated with their suppliers, such as supplier financial instability, labor issues, or environmental concerns. By proactively addressing these risks, companies can avoid disruptions and minimize their impact on the supply chain.

• Enhance compliance: Supplier visibility can help companies ensure that their suppliers are complying with ethical, environmental, and social standards. This can help mitigate reputational risks and ensure that products are manufactured socially and environmentally responsible.
• Improve product quality and safety: By monitoring supplier performance and compliance, companies can ensure that their products meet the required quality and safety standards. This can help to improve customer satisfaction and loyalty.
• Better supplier relationships: Companies can build stronger and more sustainable supplier relationships by working collaboratively with suppliers and sharing information and data. This can help to improve supplier loyalty, reduce supplier turnover, and enhance supply chain resilience.

Overall, supplier visibility is an essential aspect of supply chain management. It enables companies to build strong and sustainable supplier relationships and ensure ethical, environmental, and social compliance. In addition, it is a critical tool in supply chain risk management because it allows businesses to identify and mitigate potential risks at the supplier level before they become major issues and respond more quickly to unexpected events that may impact their operations.