Supply Chain Visibility in Business Networks

July 10, 2015 Charity Newsome

Teams claim that they are building end-to-end supply chain processes, but we do not find that this is true. Despite the growing need to automate the extended supply chain, the focus of most companies is on enterprise automation. The process flows of the extended supply chain are dependent on spreadsheets and Electronic Data Interchange (EDI). It is not sufficient.

Companies want better supply chain visibility. The gaps in current supply chain capabilities are large. While EDI is effective in moving transactional data, it is point-to-point lacking community interaction.

Companies are seeking new and deeper forms of supply chain visibility through business networks. It takes many forms. It is foundational to deliver on the promise of agility. They want to be more agile and the current IT architectures are not meeting this need.

High level survey findings are:

  • Outsourcing Is a Reality. It Is Here to Stay. For the average company, outsourcing of manufacturing and transportation is a reality. In the study, approximately 90% of respondents report having some level of outsourcing. Additionally, 30% outsource 40% or more of their manufacturing, and 55% outsource at least 40% of their logistics on a volume basis.

  • Supply Chain Visibility Has Many Forms. Few Are Being Delivered Well. The term supply chain visibility is a nebulous term with many meanings. There is no standard definition. In this report, we share insights on the forms of visibility and the issues with each. Visibility within the company is being addressed by current IT architectures, but B2B architectures to support emerging supply chain visibility requirements are evolving.

  • The Gaps in Supply Chain Visibility Are Large. The Satisfaction with EDI Is High. The Confidence in ERP to Close the Gap Is Low. The average company with ERP has seven different ERP instances and 49% of respondents report ERP spending plays a major role in their IT budget. However, as shown in this report, the gaps for supply chain visibility are high and the confidence that ERP implementations can close the gaps is low. As a result, the extended supply chain runs on EDI and spreadsheets. In the words of one supply chain leader that we interviewed, “Today, it is much like chewing gum, bailing wire and a shoestring.”

    In this report, we give an overview of the current state of supply chain visibility—the different forms and the state of each—and share insights on current levels of importance and performance. We then look critically at current efforts of IT investment/focus and give recommendations on how business users can work with IT teams to close these gaps. 

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