They say that on a clear day, you can see forever. Companies that use automation to increase visibility into their supply chains may not be able to see quite that far, but they clearly are improving operational efficiency, according to a new report released by the Aberdeen Group.
Unfortunately, most companies don't have real-time visibility into the critical processes involved in global supply chain management, says the report, A View From Above: Global Supply Chain Visibility in a World Gone Flat. That's somewhat surprising given the heightened emphasis on visibility in recent years due to security concerns.
However, companies that do have good visibility are benefiting from their investments. Those classified as best-in-class companies are leveraging their enhanced visibility into supply chain processes to make their supply chains more agile, said the researchers. For example, they can better respond to market demands because they are able to redirect shipments not just during scheduling but also at other points in the supply chain after cargo has been shipped.
Best-in-class companies are 55 percent more likely than all others to be using some kind of automated visibility/data-analysis tool. That's a major reason why those considered best in class are 2.5 times as likely as average companies and 31 times as likely as those classified as laggards to have reduced lead times for international shipments over the past two years. The best-in-class leaders, moreover, are twice as likely as laggards to be using solutions like carrier tracking systems and visibility systems that are offered by freight forwarders and third-party logistics companies to support global supply chain visibility.
It's not just international supply chains that benefit from improved visibility, however. Companies at the head of the class have been 1.6 times as likely as average companies and 2.4 times as likely as laggards to have reduced their inventory levels. In addition, they are 2.4 times as likely as the industry average and six times as likely as laggards to have reduced inventory-carrying costs.