Where is the real value in visibility? | Descartes

Where is the real value in visibility?

Visibility is what it’s all about for supply chain and logistics managers. Having real-time visibility & insights into your supply chain leads to all kinds of benefits. Performance improves, costs fall, and customers are happier. As a shipper or forwarder with increasing competition, you can’t afford not to make your supply chain transparent. What’s more, companies have a variety of reasons for wanting a clear picture of parts or all the supply chain.

In this Article:

1. What exactly is real-time visibility?

Let’s start with an example: visibility is a clear picture on the logistics chain for toys - for example, radio-controlled cars - during their journey from Asia to Europe. A journey that can be followed step by step, tracked until the item is in the store in time for a special campaign or the Christmas season. During the journey, you can see whether each link (plane, boat, truck) is on schedule and when the container or pallet with the toys can be picked up at a port or warehouse. At the same time, there is clarity on things like the contents of a shipment, its value, condition (temperature) and customs formalities (documents required).

Continuous updates

Real-time visibility in the logistics process means knowing what goods movements are taking place between the different links in the supply chain. In many cases, this will be the moment a product or load carrier starts its journey from a manufacturing site towards the end customer. The term “real-time” literally requires carriers to send continuous updates and for the owners of the goods to be able to see this information directly. Creating real-time visibility is not all that easy to manage. It requires different types of cargo carriers and hauliers to be able to share data with their supply chain partners. These data should also be shareable in such a way that a clear overview can be created for shippers and forwarders. To achieve this, sensors must be able to share data, and the supply chain partners’ applications must be connected.

More ways to acquire insights Opportunities for real-time visibility are increasing. With the emergence of APIs as an addition to the existing EDI links, it is easier for systems to swap data with each other. In addition, there are ever more modern transport management systems, dedicated ‘visibility’ platforms and other digital tools to make data transparent. That all seems ideal, but you do need to be able to reap the benefits as a shipper or forwarder.

Is real-time visibility really always real-time? In many cases, real-time visibility is based on approximately real-time data. The image a planner is looking at is a few seconds old, 10 minutes old or even less up-to-date. Even data from platforms that loudly proclaim that they deliver real-time visibility can be as much as six to eight hours old in some cases. The simple explanation is that data cannot and not always need be accurate.

Updates every second, minute or hour? The accuracy of data depends a great deal on the frequency with which systems share or can share data with each other. When using EDI links, supply chain partners reach agreements on the frequency with which their systems will share data. This may be hourly, but more often a longer interval applies. Additionally, there are sensors, separate or in trackers depending on the systems with which they can share the collected data.

2. Why is visibility so important for shippers and forwarders?

There are several reasons why real-time visibility matters so much to shippers and forwarders - more than, say, 10 or 20 years ago. One reason is that companies get more understanding of how best to respond to uncertainties in the supply chain. Another and equally important reason is that a company can give customers a clearer picture of where their products are in the supply chain. Additionally, customs data can be useful, for example notifications when cargo is released by customs.

Nothing new Is this desire for real-time visibility new? Not at all. With the advent of digitalization and the collection of more data, the need to do something with that data also increased. Meanwhile, there are many ways to track ships or aircraft worldwide. Analysing that data pays off, not least from a logistics perspective.

Investment is increasing – satisfaction is not Analists such as from Supply Chain Insights are making annual lists. This body publishes an annual study on ‘Redefining the Supply Chain’. This shows that companies yearn for supply chain visibility, but with only limited success. Since Supply Chain Insights launched its survey in 2015, there has been no improvement in the gap between how much companies value ‘visibility’ and their actual achievement of it. The bottom line: despite the many tools and platforms and multi-million-dollar investments, there has been no corresponding increase in satisfaction. The reason: data collection other than using a TMS is too fragmented.

From disruption to renewed insights and grip The structural collection of data from the logistics chain has only recently attracted so much attention. The huge supply chain disruptions caused by the Covid-19 outbreak caused the world to say goodbye to a certain reliability. You simply knew how long it took for a product to arrive in Rotterdam from Asia. Developments in digitalization also increased. Modern TMS applications can collect real-time data themselves and use it at every stage of the transport process. This gives all stakeholders insights and support. A clear(er) picture is emerging of the logistics chains in which they operate.

What insights do you need? What sort of real-time data and insights do you need? Having no reliable insight into your transport movements is by definition not good. But companies should ask themselves about the added value of certain requirements. Does it make sense to get an update on a truck’s location every minute? Does it make sense to apply complex AI algorithms to know whether a boat is close to port? After all, how much does this reflect the actual time/date a terminal can process your container? And is this accurate knowledge any use if your customs declaration isn’t ready yet?

Responding more promptly to changes Real-time visibility can give you a competitive edge. But is it actually enough to outperform your competitors? That depends mainly what you do with the visibility data. Do you use it to make more proactive decisions that keeps the supply chain moving smoothly? Do you share the data with the customer so they can do the same? Real-time insights only make sense if you can do something with them.