‘Never More Critical’: Supply and Demand Visibility
Eyes wide open, everyone! 2021 is shaping up to be the year of supply chain visibility.
A new joint study from the UK’s University of Warwick and American software company Blue Yonder cautions that building back after the pandemic will be more difficult for manufacturers that lack visibility up and down their supply chains. The study follows similar recent warnings from the Association for Supply Chain Management and Economist Intelligence Unit as well as Cleo Integration Cloud. The common message: It’s what you can’t see that can hurt you, and you might not see it if your organization has not invested in digital capabilities.
“As we continue to deal with the disruptions of COVID-19, demand and supply visibility has never been more critical,” said Professor Jan Godsell of the University of Warwick’s WMG department. “It enables manufacturers to better plan their manufacturing operations, to minimize costly inventory buffers.”
WMG and Blue Yonder’s survey of nearly 250 manufacturers revealed that:
- Nearly half (47%) said a lack of visibility into supplier capacity and 37% said a lack of visibility of customer demand were major supply chain constraints for them.
- More than half (55%) used inventory as the major buffer against disruption. This can tie up cash and can leave organizations exposed if demand falls, the study’s authors noted.
- Less than a third (32%) used visibility in their supply network to react to disruption.
“They say, ‘The wise man built his house on the rock,’ and when they’re rebuilding after COVID-19, manufacturers must put resilient digital supply chains at the center of operations,” said Alan Duncan, senior director of manufacturing strategy at Blue Yonder. “Manufacturers have been investing more in the move to digital supply chains in recent years, but it’s crucial that their plans are pushed through to fruition. A digital supply chain will give them the end-to-end visibility, resilience and agility required to emerge from pandemic disruption in the strongest manner possible.”
Want to give your operation a vision test? The university and Blue Yonder together designed a free digital readiness tool to allow manufacturers to assess their current supply chains to identify areas for improvement.