The complexity and interconnectivity of global markets have heightened the importance of supply chain visibility, making it essential for informed business decision-making. However, businesses can easily become overwhelmed by both the volume of data and the costs associated with pursuing total visibility. Additionally, supply chain visibility is not simply a software solution you can purchase off-the-shelf. Indeed, supply chain visibility is not a one-size-fits-all solution as each business is unique. Moreover, there are many different types of visibility, each providing insights into various segments of the supply chain.
So, to get the most out of supply chain visibility, it’s crucial to identify the specific type of visibility your business needs. Moreover, “Rome was not built in a day”, so identify exactly which type of visibility you need, and build it one IT project at a time. By doing so, you can avoid overly complex projects that yield little insight and even less ROI. In this article, I’ll share with you seven types of supply chain visibility and how they can be tailored to different business needs, helping you achieve the visibility that matters most to your organization.
- 1. Transportation Visibility: “Where’s My Stuff?”
- 2. Capacity Visibility: Identify Choke Points in the Supply Chain.
- 3. Shipping Performance Visibility: Descriptive Post-Analysis and Measurement.
- 4. Rates Visibility: Manage Transportation Spend.
- 5. Planning Visibility: Prepare for Future Supply Chain Operations.
- 6. Operational Visibility: Proactively Manage Current Supply Chain Operations.
- 7. Strategic Visibility: Innovate And Optimize Supply Chain Processes.
1. Transportation Visibility: “Where’s My Stuff?”
The Need To Know Where Cargo Is And When It Will Arrive.
So, for this type of visibility, logistics managers and end-customers primarily use transportation visibility tools. With tracking technology, they can receive updates on a shipment’s progress and estimated time of arrival. For example, let’s take real-time tracking of cargo, such as the GPS location of a shipping container. Here, a supply chain manager can anticipate its arrival and manage their operations more effectively.
Now, supply chain managers need to balance the frequency of tracking with the costs to track. For example, GPS real-time tracking is expensive. However, it enables swift action in case of delays, diversions, or unexpected events. Thus, this ensures that stakeholders are always informed about the whereabouts of their cargo and shipments arrive on-time. For most tracking use cases, periodic tracking such as every couple of hours or once a day is most cost effective and best value. For more information on the latest tracking technologies, see my article, 10 Logistics Tracking Technology Trends: The Best Tech For Better Visibility And Traceability.
“… supply chain managers need to balance the frequency of tracking with the costs to track.“
2. Capacity Visibility: Identify Choke Points in the Supply Chain.
The Need To Know Where the Choke Points And Critical Paths Are In the Supply Chain.
Capacity visibility provides insights into the utilization of resources within the supply chain. Thus, this helps businesses to spot bottlenecks that could lead to inefficiencies. For example, capacity visibility is critical at a port to proactively monitor crane availability to assure cargo offloading is both efficient and not delayed. In another example, a supply chain analyst can monitor warehouse space. As a result, they discover that a particular facility routinely reaches capacity, causing delays in shipping. With this knowledge, management can take steps to redistribute inventory or expand resources.
Capacity Visibility is particularly challenging as it needs rapid, targeted information into every function and segment of the supply chain to identify choke points. Moreover, when these choke points are identified, rapid analytics and action is needed to overcome exceptions. Hence, there is a new breed of software emerging for supply chains, I call a Decision Platform. This software is powered by AI and Decision Intelligence that provides Capacity Visibility across the supply chain. For more information on Decision Systems, see my article, A Breakthrough In Decision Systems: The Need For AI Analytics To Best Empower Executive Insights.
“Capacity Visibility … needs rapid, targeted visibility into every function and segment of the supply chain to identify choke points.”
3. Shipping Performance Visibility: Descriptive Post-Analysis and Measurement.
The Need To Know How the Supply Chain Is Performing Using KPIs And Audits.
First, descriptive analytics is the basis for Shipping Performance Visibility, providing the essential data to measure performance and identify anomalies. In most cases with this type of visibility, managers use Key Performance Indicators (KPIs) to laser focus on particular particular shipment events such as delivery times and any anomalies disrupting normal operations. Also, this type of visibility is not just about internal efficiency. For instance, businesses can use this visibility tool to focus on meeting Environmental, Social, and Governance (ESG) goals or ensuring regulatory compliance.
So, Shipping Performance Visibility empowers businesses to make data-driven decisions that boost efficiency, cut costs, and foster a culture of continuous improvement. This level of clarity allows supply chain analysts to diagnose service disruptions and take corrective action based on a detailed understanding of their shipping operations. At the same time, it is important to remember that because this analysis typically occurs post-delivery, real-time data collection is often unnecessary. In my experience, keeping data collection targeted is the best way to avoid data overload and prevent the extra expenses associated with gathering real-time data. For more discussion on using Shipping Performance Visibility for diagnosing and improving shipping operation, see my article, Data Analytics You’ll Need For Unsurpassed Carrier Delivery Results.
“Shipping Performance Visibility empowers … analysts to diagnose service disruptions and take corrective action … analysis typically occurs post-delivery, real-time data collection is not necessary.”
4. Rates Visibility: Manage Transportation Spend.
The Need To Know Transportation Rates, Both Historical And Future, For Cost-Benefit Analyses And Spend Management.
Rate Visibility – having access to pricing across different carriers and shipping options – is fundamental to optimizing transportation lanes. First, you can use Rate Visibility upfront for “rate shopping”. This is where a shipper first compares carrier rates, and then selects the lowest-cost carriers that can meet the service commitment for a specific route. However, it is important to recognize that the expense of a real-time rating systems may not always be necessary. For instance, if a business relies primarily on established carrier contracts rather than the spot market, the investment in real-time data may not yield a significant return.
However, for many shippers, the true power of Rate Visibility is for planning and negotiating carrier contracts. By analyzing historical trends alongside future projections, shippers can move beyond guesswork and make informed decisions about their transportation networks. For instance, comparing past freight costs against current quotes provides the leverage needed to negotiate superior terms with carriers and optimize a transportation budget. Ultimately, rate visibility is more than just a pricing tool; it is a strategic asset that yields significant financial benefits and provides a distinct competitive edge through disciplined cost management. For more tips on carrier rate audits, see my article, The Best Ways To Make Your Freight Bill Audit Process Better Benefit Your Shipping Operations.
“Ultimately, rate visibility is more than just a pricing tool; it is a strategic asset that yields significant financial benefits and provides a distinct competitive edge through disciplined cost management.”
5. Planning Visibility: Prepare for Future Supply Chain Operations.
The Need To Know Future Demand, Future Supply, Inventory Levels Required And Assets Needed.
Without a doubt, Supply Chain Planning Visibility is the foundational ability to access the data required for robust predictive analytics. This visibility is critical for planners to forecast demand and allocate resources effectively, moving beyond reactive measures to proactive strategy. For instance, by leveraging predictive analytics, planners can recommend precise inventory levels that consistently meet customer demand while minimizing waste. This approach empowers businesses to make informed decisions now, ensuring they remain agile and responsive to market changes and better equipped to absorb the impact of demand fluctuations. For more on predictive analytics, click here.
By integrating data from sales, operations, and external sources, Supply Chain Planning Visibility enables businesses to accurately anticipate market trends and adjust their supply chain strategies ahead of the curve. However, it is vital to remember that visibility does not require an exhaustive data haul. In my experience, a targeted approach to data collection is far more cost-effective; it prevents the drain of data overload while ensuring that the insights gathered are both actionable and strategically aligned. For more tips on using data analytics for supply chain planning, see my article, Supply Chain Planning: Data Analytics Advice That Will Result In A Better Way.
“By integrating data from sales, operations, and external sources, Supply Chain Planning Visibility enables businesses to accurately anticipate market trends and adjust their supply chain strategies ahead of the curve.”
6. Operational Visibility: Proactively Manage Current Supply Chain Operations.
The Need to Rapidly Know the Impact of Likely Exceptions, to Prioritize Information Gathering, to Identify mitigation strategies, and Make Assessment on What to Do.
In today’s volatile supply chain landscape, Proactive Operational Visibility is no longer a luxury; it is a necessity for identifying exceptions and rapidly delivering the intelligence needed before a problem spirals into a costly disruption. In contrast, traditional “Where’s My Stuff?” tracking is a reactive trap, often characterized by sluggish alerts and massive data dumps that offer little actionable value. To achieve true Operational Visibility, a dual-focus approach is needed. First, the system must prioritize and provide immediate information on the highest-impact problems. Second, it must quickly identify information gaps and offer an on-demand capability to gather and close information gaps to support rapid situational assessments. For more on rapid assessments, click here.
To illustrate Proactive Operational Visibility, a manufacturer might use on-demand analytics to anticipate a potential delay in raw material shipments due to weather conditions. By quickly assessing the impact of this delay on their production schedule, they can prioritize information gathering to understand the severity of the delay. From there they can leverage advanced technology to help identify alternative suppliers or adjust their production plans accordingly. Also, thanks to AI and advanced analytics, it is possible for a high-velocity decision system to support Operational Visibility and rapid assessments.
“Proactive Operational Visibility is … is a necessity for identifying exceptions and rapidly delivering the intelligence needed before a problem spirals into a costly disruption.”
More Proactive Visibility References.
- Operational Visibility versus Reactive Tracking: Reactive Shipment Tracking Vs Proactive Operational Visibility: Here Is How To Best Overcome Supply Chain Exceptions.
- Decision Systems – On-Demand Analytics, AI-Powered, Learning Loop: High-Velocity Decision Systems for Executives: The Three Ways To Best Exploit AI Tech And Data Analytics
7. Strategic Visibility: Innovate And Optimize Supply Chain Processes.
The Need To Know What Can Be Done To Improve Supply Chain Processes To Assure Future Success.
Strategic Visibility transcends operational visibility. Specifically, it provides insights that drive long-term improvements and innovation within supply chains. Through a holistic view that encompasses suppliers, internal processes, and customer feedback, businesses can identify systemic issues and opportunities for process re-engineering. Indeed, this is the essence of digital transformations – not automating processes, but focused on new automated processes that achieve better outcomes. For Example, this might involve re-configuring the supply network for improved sustainability or adopting new technologies to streamline operations.
A Strategic Visibility capability fosters a culture of continuous improvement that positions a business for long-term success in a competitive landscape. To achieve this, businesses need to adopt a Strategic Visibility framework that aligns with their unique goals. In many cases, I have found that a complex, full-scale “Digital Twin” is not always required. Instead, a streamlined framework centered on targeted data collection can be far more effective, enabling the development of innovative, transformative solutions that dramatically improve strategic outcomes. For more Insights on digital transformation, not just hype, see my article, The Way Of Digital Transformation: A Business First, High Tech Reinvention Of Processes And Culture.
“… Strategic Visibility framework that aligns with their unique goals … a complex, full-scale “Digital Twin” is not always required. Instead, a streamlined framework centered on targeted data collection … that dramatically improves strategic outcomes. “
More References.
For more discussion and references on different types of supply chain visibility, see below:
- GEP’s article, Real-Time Visibility for Maximum Supply Chain Performance
- Vizion’s article, What are the Types of Supply Chain Visibility Software, Applications & Technology to Consider?
- NetSuite’s article, What Is Supply Chain Visibility (SCV)? Definition & Examples
- SC Tech Insights’ article, Supply Chain Visibility Of Cargo: Know Your Need And The Surprising Challenge To Secure It
Need help with an innovative solution to make your supply chain analytics actionable? I’m Randy McClure, and I’ve spent many years solving data analytics and visibility problems. As a supply chain tech advisor, I’ve implemented hundreds of successful projects across all transportation modes, working with the data of thousands of shippers, carriers, and 3rd party logistics (3PL) providers. I specialize in proof-of-concept and operational pilot projects using emerging technologies and methodologies. If you’re ready to supercharge your analytics or if you are a solution provider, let’s talk. To reach me, click here to access my contact form or you can find me on LinkedIn.
For more from SC Tech Insights, see the latest on these topics, Data, Supply Chain, and Decision Science.
Greetings! As a supply chain tech advisor with 30+ years of hands-on experience, I take great pleasure in providing actionable insights and solutions to industry leaders. My focus is on supply chains leveraging emerging LogTech. I zero in on tech opportunities and those critical issues that are solvable, but not well addressed, offering industry executives clear paths to resolution. I have a wide range of experience to include successfully leading the development of 100s of innovative software solutions across supply chains and delivering business intelligence (BI) solutions to 1,000s of shippers. Click here for more info.