Four Best Practices to Improve Supply Chain Visibility
Resiliency is a highly prized quality during times of severe supply chain disruption. Closely related and just as important: visibility.
“In the wake of supply chain disruptions due to coronavirus, several experts have reiterated the need to obtain more visibility across the chain,” observes a World Economic Forum (WEF) blog. “Companies who sell finished goods generally know production and shipment schedules for their Tier 1 suppliers, but they usually have little to no knowledge of suppliers further up the chain.”
- Move away from paper to digital records — “Protective measures for COVID-19 have made clear that operations dependent on physical assets, such as paper, can face serious disruption when physical presence is not a possibility,” Liao and Fan write. “Digitizing, then, is not simply a matter of cost, but primarily of visibility and managing supply chain risk.”
- Ensure data privacy for your suppliers — No one wants to reveal their secret sauce to competitors. A blockchain approach to data management is a solution. “When created properly, suppliers can audit their data-sharing permissions directly on their own blockchain node,” the blog explains. “At the same time, their data can be securely distributed to others in the blockchain network without requiring the point-to-point integration that centralized systems do.”
- Give suppliers an incentive to share data — On the other hand, certain data need to be visible to buyers, and paying vendors for data as well as their finished goods is another area where blockchain might help.
- Start now — Don’t assume the coronavirus disruption was a once-in-a-lifetime event. Start preparing now.
“When critical supply chain disruptions hit,” Liao and Fan note, “visibility becomes crucial to understanding the impact of the disruption on the rest of the chain so that others in the ecosystem can plan and take action, such as developing routes to alternative suppliers.”