May 28, 2024 Visibility: Why It Matters and How to Achieve It

Despite recent black swan events, there is still too much reliance on legacy systems when negotiating supply chains.

By Oana Jinga, Chief Commercial and Product Officer and Co-Founder at Dexory

The modern warehouse is a hub for consistent, around-the-clock action. With goods moving in and out at an ever-increasing speed. Inconsistencies and gaps in the level of goods in the warehouse can lead to dissatisfied customers and staff attrition should they be sent on a wild goose chase to look for an item in the wrong location.

Due to the number of challenges relating to demand forecasting, supplier relationship management, production efficiency, inventory management, and technology integration, there is a need for seamless collaboration among different systems.

Understanding the visibility gap in warehousing

In the past four years, we have seen an unprecedented change being driven in the supply chain and warehouse industry. Global events like the pandemic shifted people’s shopping habits to online, causing excess demand for suppliers. This was coupled with geopolitical issues and conflicts that have meant that supply chains are no longer built for efficiency, but for resilience.

In addition, many businesses operate with fragmented and legacy systems, where data lives in silos and across different platforms. Usually, these different systems don’t talk to each other, leading to difficulties in tracking and monitoring operations in real-time. To obtain full visibility, businesses need to ensure a seamless flow of data.

The root cause of the visibility gap is related to data. Several factors cause the fragmentation of data, but the three main reasons are:

1. Fragmented systems: Many organizations operate with disjointed systems, creating data silos that hinder the seamless flow of information across the supply chain.
2. Inefficient communication and human error: When critical information is not shared promptly or accurately, it creates gaps in visibility and exacerbates operational challenges. Similarly, human error can cause issues through something simple such as a misplaced box in the wrong pallet location or entering it wrong in the WMS.
3. Legacy technologies: Outdated or incompatible technologies can impact the real-time exchange of data. Legacy systems often lack the capabilities needed to keep up with the dynamic nature of modern supply chains.

The impact of visibility to the business

Visibility is a key part of business and now that we have established where the issue of visibility comes in, it is important to underscore the implications to the business itself. As mentioned above, visibility is fundamental in achieving and maintaining operational effectiveness. There are many risks and inefficiencies.

If these inefficiencies are not addressed, it can lead to implications such as:

1. Increased operating costs: Without a clear view of the supply chain, businesses may face increased operational costs due to inefficiencies, excess inventory, and disruptions. This, in turn, affects the overall profitability of the organization.
2. Customer dissatisfaction: In today’s consumer-driven market, customers expect timely and accurate deliveries. The visibility gap​ can result in delayed shipments or stockouts, leading to dissatisfied customers and potential damage to a company’s reputation.
3. Risk exposure: Lack of visibility makes it challenging to identify and mitigate risks effectively. Whether it’s geopolitical issues, natural disasters, or disruptions in the supply chain, organizations with limited visibility are more susceptible to unforeseen challenges.

Closing the visibility gap

In warehouse management, an astonishing 6,500 hours are dedicated annually to seemingly straightforward tasks such as cycle counts and stock checking. Even with this amount of time, it is not enough to achieve full visibility and often this data is outdated as soon as it is entered into a system.

Below are some tips on how businesses can close the visibility gap:

1. Real-time data

Gathering real-time data allows businesses to get a holistic view of all their operations and make sure that the data is matching the WMS to quickly point out any discrepancies in the system.

2. Advanced analytics and predictive monitoring

Leverage advanced analytics and predictive modeling to anticipate demand fluctuations, optimize inventory levels, and identify potential bottlenecks in the warehouse. By utilizing AI powered solutions for analytics, businesses can generate more insights and visibility with more data.

 3. Invest in technology infrastructure

Allocate resources to upgrade and integrate technology infrastructure within the warehouse. This includes implementing WMS, Internet of Things (IoT) devices, and cloud-based solutions to streamline operations and enhance real-time visibility.

 4. Prioritize collaboration

Foster collaboration with suppliers, manufacturers, and distributors. Implement shared platforms and standardized data exchange protocols to ensure seamless communication and information flow throughout the supply chain.

If the world of warehousing and logistics was not complex enough, the visibility gap is a wholly new challenge that businesses now need to deal with. Through embracing new innovations, collaborative working practices and real-time data, organizations can close the visibility gap in their warehouses.

Oana Jinga is the Co-Founder and Chief Commercial and Product Officer at robotics and data intelligence firm, Dexory. Having previously led on strategic partnerships for Google, and developed innovative products at Telefonica, her career has touched on various areas of the tech world, having found a sweet spot in designing, developing, and bringing robots to the logistics industry to drive significant business value across all warehouse processes.

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