The Biggest Myth about Supply Chain Visibility

The Resilient Enterprise | The riskmethods blog
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July 30, 2019

Downstream visibility or upstream visibility: Which is most important? If you look at the way that many organizations are approaching the supply chain visibility topic these days, you’re going to jump to the conclusion that downstream visibility is critical, while upstream visibility is a nice-to-have. Well, guess what: It’s time to bust this supply chain visibility myth.

by Thomas Gröhl

For supply chain organizations discussing supply chain visibility, the focus is often on downstream. “The customer is king,” they say. “Downstream visibility focuses on the customer, and it should be our first priority.”

This is the biggest myth about supply chain visibility—and it’s time it was busted. The fact is: Upstream visibility is just as important as downstream visibility. Why? Simple: Because a lack of upstream visibility is just as likely to impact your customer.

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Let’s say, for example, that your company manufactures cameras. You, of course, need to make sure that you have full visibility into what’s happening when a camera is moving from your warehouse to your customer, from the packing process to the delivery to the retail store—after all, if your cameras don’t make it to these stores, they’re never going to make it to your customers. Companies everywhere are aware of this, and are working to implement all kinds of processes to improve downstream visibility: optimizing transportation/warehouse logistics, unifying ERP systems, creating digital twins of their production, and more.

If your organization is looking at these kinds of projects, well done: You’re right to be doing it. But if downstream visibility is your only focus, you’re only doing half the job—because upstream visibility is just as important to the customer. Let me put it this way: How are you going to get your cameras into the hands of your customers if you don’t have the parts you need to build them in the first place? This is why upstream visibility is just as crucial as downstream visibility.

So how do you get upstream visibility? Well, a supply chain risk management program is an essential first step—because if you’re not monitoring your suppliers (not to mention your supply paths and your own sites) for events that are going to impact them, then you have virtually no upstream visibility. Here’s where you should start:

  • In procurement. Your procurement department owns the relationship with your supply base and should have the necessary insight into any type of risk affecting your supply chain downstream. (CPOs, learn more about what´s in it for you.)
  • In your supplier sub-tiers. According to the Business Continuity Institute, the majority of supply chain disruptions occur below tier one. You need visibility into not just your tier-one suppliers, but all of your sub-tiers.
  • Major logistics hubs. What major logistics hubs are your supplies and your products going through, and are you aware of events there that might impact your supply paths? If not, you’re not going to be able to effectively mitigate threats. (See the world’s riskiest logistics hubs.)
  • Your own warehouses and distribution centers. You need to monitor suppliers’ sites just as much as you need to monitor your own. Is something happening on the ground that’s going to impact production? You better know about it, and make sure you can take actions to prevent it.

Ready to start your true end-to-end supply chain visibility journey? Get started with our guide to upstream supply chain visibility. You’ll learn more about managing risk to gain supply chain visibility, and some tips and tricks to get started with achieving it.

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