Supply chains span the globe, bringing raw materials, components, and goods together to create products that meet market demand. This article examines issues, benefits, and approaches that affect supply chain visibility.

While supply chain visibility is crucial across many industries, we will be making specific references to the food industry throughout, so that food manufacturers, retailers and distributors understand the importance of supply chain transparency and the legislative environment that necessitates precise provenance tracking.

What is supply chain visibility? 

Supply chain visibility is more than just a matter of knowing where goods and materials come from and what their history is. It also refers to tracking their journey before they ever reach your business. To gain clear supply chain visibility, you need access to accurate information covering all the links in your supply chains from raw materials to delivery.  

Why is visibility important in supply chains? 

Product traceability, legal compliance & product safety supplier relations 

Traceability is a basic requirement for legal compliance in the food industry. By having a clear picture of the origins and journeys of everything from raw ingredients to packaging, legislative bodies, retailers, and producers can ensure that products are consumer-ready. Supply chain visibility can also allow for effective risk management - for instance, identifying points of contact with potential allergens or anything that could compromise product safety. 
 

Supplier relations

Having a clear overview of what is occurring within supply chains helps suppliers and their customers to collaborate better. For example, they can work together to plan and implement strategies designed to reduce the impact of impending shortages or coordinate production schedules for optimised efficiency.

Supply chain visibility also enhances trust through mutual access to objective information and the ability to verify adherence to pre-agreed standards. By using data-driven insights, buyers can evaluate supply chain partners more effectively, serving as a basis for supplier negotiations and choices.  

Optimised procurement costs

Sourcing decisions are based on quality, but also on cost. Supply chain visibility allows food industry businesses to gain an overview of markets, spotting potential areas for cost savings without compromising quality. It also allows for well-informed price negotiations. For example, if your business has a good relationship with a packaging supplier but their price outpaces the market, you can ask them to match the market price.

Consumer confidence

One-third of UK consumers say they care about the origins of the products they buy. They are concerned about the environmental and social impacts of the products they choose, and they want claims about products to be verifiable. For example, if you claim to be selling locally produced foods, consumers want to feel secure in the knowledge that they are not buying imported food. And, of course, they want to feel confident about food safety too. While this relates to traceability, supply chain visibility allows for better supply chain planning and management.

Demand forecasting & distribution planning

Supply chain visibility extends to demand forecasting and production planning. Some trends are easy to predict, such as seasonal produce, but by maintaining a watchful eye on global supply chains you can determine whether demand is rising or falling in certain areas. This can help you make data-driven procurement decisions to reduce waste and enhance profitability

Risk management 

The food supply chain is subject to a multitude of risks. Early detection of supply issues can help your business minimise disruptions stemming from issues like shortages caused by crop failures or price instability. It also helps your suppliers to plan and strategise so that they are better able to continue meeting your expectations. 

Sustainability, waste reduction & ethics 
  
Supply chain visibility allows you to manufacture and sell your products in the knowledge that they align with your business’s commitment to ethics and sustainability. These include everything from your support for worker rights and animal welfare to your desire to reduce carbon emissions and food waste.

Benefits of Supply Chain Visibility 

Many of the benefits of supply chain visibility can be inferred when examining its importance. However, there are additional benefits that provide food for thought. They include:

• The ability to respond quickly and mitigate the impact of supply chain challenges - or even predict them before they occur. 

• Being able to obtain an overview of the supply chain ecosystem and evaluate supplier performance more comprehensively.
  

• Enabling greater consistency in the standard of products or production inputs and setting unambiguous and realistic goals for continuous improvement. 

• Coordinating quality control and regulatory compliance from your perspective as a B2B customer. For example, you can require specific forms of quality testing at the supplier level and check whether certifications are up to date. 
   

What is real-time supply chain visibility? 

Real-time supply chain visibility means tracking and monitoring every component of your supply chain as it happens. In the past, this was impossible, but advancements like the Internet of Things (IoT) and GPS tracking make it possible to know exactly what is happening in your supply chain at any given time. This allows you to identify supply chain anomalies before they become problems and ultimately helps you to meet customer expectations.

Key trends for supply chain visibility  

AI and machine learning allow for advanced analytics that give users the ability to gain at-a-glance insights into supply chains and market trends. Without these advanced technologies, it would be nearly impossible to process information quickly enough to make proactive decisions.  

Using AI, it’s possible to leverage real-world data to see how changes to your supply chain strategies might impact your business. For instance, “digital twinning” is an interesting trend that allows you to model and simulate a variety of supply chain scenarios. This helps you to optimise supply chains and deal with potential disruptions without having to implement untried adjustments. 

IoT and sensor technologies also have a role to play, providing crucial information on the movement of goods and the conditions in which they are handled and stored. For example, you can ensure that your supply chain partners are maintaining the cold chain that’s essential for maintaining the safety and quality of meat-based products.  

A blockchain-based approach maintains transparency, keeping tamper-proof records that allow for greater confidence in the accuracy of supply chain data. With so much vital data to gather, store, transfer and process, cloud-based solutions allow you to access real-time data from around the world. 

What are the challenges affecting supply chain visibility?  

In an increasingly complex supply chain environment, there are challenges to overcome when working towards full visibility. After all, the concept is contingent on sharing data across not only your direct suppliers but their suppliers too. Visibility therefore requires information on the status of multiple inputs from sources around the world. 

Achieving supply chain visibility calls for the elimination of data silos and fragmented systems that fail to provide and package information in a clear and usable format. The chain of supplier-related data should consist of unbroken links reaching all the way back to the original sources of resources and raw materials.

Implementing consistent data formats across the supply chain would be a solution, but achieving this can present a challenge of its own. In a related point, technological integration must begin at the source of each production input. Under-resourced suppliers may still be relying on manual record keeping, for example, and this could lead to errors, oversights, or the deliberate obfuscation of data. 

The cost implications of implementing a standardised approach to data collection and sharing can be high since it requires an investment in technology. In certain countries, economic factors and shortcomings in infrastructure can limit the capacity to invest in and use technology. Businesses and their supply chain partners may therefore need to devote focus and resources to overcome this obstacle.  

Laws & regulations related to supply chain visibility 

No matter where in the world you do business, there are laws that directly or indirectly call for supply chain visibility. These include:

• Traceability laws, for example, the Food Safety Modernization Act (US) and the European Union’s General Food Law. 

• Environmental reporting regulations such as the EU's environmental reporting requirements and California's SB54 regulation. 

• Customs and trade compliance laws, for example, the import control regulations implemented in various countries. 
  
  
• Anti-bribery laws that require companies to disclose supply chain information as proof that their supply chains are untainted by corruption. Examples include the UK’s Bribery Act (2010) and the US Foreign Corrupt Practices Act.
   
• Packaging and waste-related regulations intended to minimise environmental impacts and promote consumer safety. In the US, the Resource Conservation and Recovery Act is of interest, while in the EU, the Packaging and Packaging Waste Directive applies. 
   

Ways to improve supply chain visibility 

Implement technological solutions 

Use tools such as supply chain management software to track the sources and movements of materials or finished goods. This will be particularly important in complex supply chains. For example, your supplier uses components from around the world in an assembly, and they pass through several companies and even countries en route. If there were to be any quality or ethics-related issues on their journeys, the information should be visible in supply chain data.

Collaborate with suppliers 

Collaboration will ensure that your supply chain partners are aware of your goals and needs. By working together to address supply chain visibility issues, and sharing information, you can coordinate your efforts towards enhanced transparency. A shared platform can help facilitate collaborations in which your goals are clearly stated, and suppliers provide evidence of compliance.

Require standardised processes & reporting formats 

The use of standardised processes and formats can be among the KPIs you expect supply chain partners to comply with. Develop a set of performance metrics that you will use to determine whether they are meeting your requirements for supply chain transparency.  These metrics could include examination of certifications, assessments of documentary accuracy and assessments of the timelines suppliers follow when sharing information. 

Implement regular audits & assessments 

Incorporate transparency and visibility as criteria to be assessed during your supply chain audits. Audits will help you to identify areas for improvement, contributing to your negotiations and relationships with suppliers. They can also incorporate risk assessments that search for supply chain vulnerabilities that may impact visibility and transparency. This allows you to strategise for further improvement and be prepared for contingencies.  

Improve supply chain visibility with Foods Connected 

Few sectors feature supply chains as complex as those found in the food and beverage industries. It’s a domain that’s governed by strict regulations, and with impacts on consumer and environmental health and business reputations at stake, supply chain visibility is key.  

Achieving quality at the right cost while maintaining supply chain visibility and resilience can be an enormous challenge. We help our customers achieve visibility using an award-winning suite of supply chain management tools, including food traceability software that utilises cryptographic technology to capture insights into supply chain quality.  

Request a demo today to discover how we can help you improve your supply chain visibility to create safe, high-quality and cost-effective products.