The Case for Investing in Supply Chain Visibility

Andrea Greco, John Krupar, R.J. Romano August 1, 2023

Three real-world scenarios illustrate where supply chain disruption can be turned into business opportunity. 

TAKEAWAYS:
● Supply chain performance will remain essential to business success and resilience.
● Improving visibility beyond Tier 1 is necessary to avoid disruption, strategize on cost and quality, and comply with regulations.
● Close relationships with suppliers and other stakeholders can help manufacturers with supplier due diligence, onboarding management, and performance monitoring.

The White House’s June 2023 report indicating that supply chain disruption has eased is good news for manufacturers, but they should not let up on their investments in supply chain anytime soon. Disruption is not an “if”, but a “when”, and manufacturers who deprioritize supply chain today will be less prepared to adapt to future disruptions. Supply chain performance also remains a key differentiator in business success as a critical enabler of customer service excellence, cost efficiencies and resilience.

To hone a competitive edge in today’s operating environment, manufacturers must take several steps to adapt their supply chain strategies, including:

  1. Evolve from reacting to disruption to establishing the supply chain as a key driver of business value.
  2. Establish deep partnerships with key suppliers, as they are an integral part of maintaining quality, predictability, and on-time performance and optimizing cost.
  3. Develop an intimate understanding of extended supply chains beyond Tier 1 suppliers and work with all stakeholders to design a sustainable and resilient supply chain operation that drives competitive advantage.

Improving supply chain visibility is a key component of achieving these strategic goals. According to the 2023 BDO Manufacturing CFO Outlook Survey, 42% of manufacturers will improve supply chain visibility this year — but many are still not prioritizing this core element. Visibility means having sight beyond Tier 1 suppliers and downstream into customers’ operations.

Improving visibility is key for navigating disruption, adapting to new stakeholder expectations, modeling strategy and operational changes affecting cost and quality, and complying with regulations. It’s enabled by technologies like blockchain, sensors, ERP, and mapping and tracing technology and processes. Ultimately, investing in supply chain visibility will help transform this critical function into a driver of value and resilience for the entire business.

But what do these principles look like in action? How can companies apply visibility to real-life situations? We’ve outlined three hypothetical scenarios and accompanying solutions to demonstrate how enhancing visibility can help turn disruption into opportunity across manufacturing subsectors.

John Krupar is Principal, Global Value Chain at BDO USA, P.A.

R.J. Romano is Managing Director, Global Value Chain at BDO USA, P.A.