The Aberdeen Group recently released the report, Supply Chain Visibility: A Critical Strategy to Optimize Cost and Service. The report summarizes the results of a survey they conducted of 149 companies, all with predominantly global supply chains. The report reviews how important visibility is in strategies to reduce cost and improve service on a global scale. The results indicate that for 63 percent of companies visibility is a high priority, with an additional 28 percent listing visibility as a medium priority. The survey proposes that complete supply chain visibility becomes increasingly difficult to maintain at a global level due to growing intricacies.
What Causes Increased Complexities?
As companies expand into the global market, supply chains become multi-tiered, which leads to longer lead times and additional pipeline inventory. In addition to internal changes, the external factors in a global supply chain—from cultures and languages to tariffs and regulations—contribute to forty-five percent of companies responding that overcoming complexities and challenges as their top pressure. Another 43 percent identified their top pressure as the need to improve speed and accuracy within their supply chain. Like additional complexities, speed and accuracy change in a global setting, in most cases they are both reduced.
Who are the Leaders?
The Aberdeen Group defined the companies with the top performance as leaders; they based this distinction on multiple criteria:
- The percent of inbound orders received complete and on-time
- The percent of outbound orders delivered complete and on-time
- The change in total landed costs over the past year
- The percent of out-of-stock inventory to average on-hand inventory
- The company’s compliance level with GS1 standards
The leaders want more control over their supply chain and push for additional coordination among external parties than the remaining companies. When it comes to GS1 compliance, 100 percent of the leaders are compliant to the item level, whereas only 25 percent of the remaining businesses are GS1 complaint. This indicates that companies who strive to be GS1 compliant may have a healthier, more visible supply chain.
How do 3PLs Connect?
There has been an unprecedented increase in the use of third party logistic service providers (3PLs) in recent years. Over 70 percent of shippers surveyed have an ongoing relationship with a 3PL, and 56 percent of those companies have relationships with more than one 3PL. Fifty percent of the leading companies replied they use five or more 3PLs regularly. The majority of large 3PLs offer solutions that provide automated track and trace capabilities and provide improved connectivity and event monitoring. All qualified 3PLs should provide track and trace visibility at the unit level that is compliant to the worldwide GS1 standards.
Want to Know More?
Every day shippers face additional challenges and complexities due to the growing global market. Global supply chains increase the need for companies to develop and maintain seamless integrated visibility across multiple enterprises in order to gain the most beneficial results and close more gaps. For more information about how the companies surveyed by the Aberdeen Group succeed in a complex global world, read the entire report. The report is complimentary through C.H. Robinson, but is only available for a limited time, so download your copy today.