Importance of Real-time End-to-end Visibility in Demand-driven Supply Chain

•  Traditional supply chains are based on the inside-out model, i.e., they generate products from suppliers based on the demand forecast and lead times in production.
• However, this model is prone to fluctuations and volatility. If the actual demand is different from the forecast, there becomes a necessity to adjust the supply levels accordingly. Also, lag time between demand changes and its detection along the supply chain leads to inventory shortages or excesses.
• To eliminate such volatility, demand-driven supply chains are built on the outside-in model, i.e., they focus on the customer demand and respond directly to any changes in it.
• A survey by Gartner has found that having end-to-end visibility in the demand-driven supply chain helps organizations to reduce their costs by 20%, reduce their inventory stock from 10 days to 7 days, streamline their transportation process by at least 5%, and improve customer satisfaction.

Blind Spots in Demand-driven Supply Chain

• In a survey conducted by American Shipper, a majority of the respondents stated that the biggest blind spots occur when the shipments are in container terminals, meaning that visible latency is the biggest concern.
• In the above survey, only 6% of the respondents reported to having real-time end-to-end visibility in their system. 70% of the respondents reported to seeing moderate latency in their systems.
• The reasons for the lack of visibility are because of a lack of electronic connectivity to their suppliers, no access to analytic tools, and insufficient expertise in implementing visibility systems.

Top Blind Spots of Companies in Ecommerce and Retail

• The first blind spot reported by most companies in the ecommerce and retail sector is not directly engaging with their customers. This is due to their dependence on their retailers and their fear that direct customer engagement will damage their relationship with their retailers.
• The second blind spot reported by most companies in the ecommerce and retail sector is not using smart packaging.
• The third blind spot reported by most companies in the ecommerce and retail sector is implementing obsolete solutions in tackling counterfeit goods. This is because of the inertness displayed by companies in deploying measures to identify counterfeit goods and cheap knock-offs of their products.