Best-in-class retailers have greater supply chain visibility
It’s easy to forget how much work goes into creating a piece of clothing.
Even the most basic of T-shirts requires supply-chain gymnastics to get from “fibre to fabric, fabric to garment”, yet research by Aberdeen Group has found that leading retailers not only possess better visibility of their in-transit shipments but also possess a clearer view of supplier quality and manufacturing processes than their less well-performing peers.
With increasingly complex supply chains stretching across multiple continents, many retailers are discovering too late how vulnerable they are to disruptions such as congestion, labour disputes and extreme weather events.
Supply chain visibility provides the smarter retailer with clear insights into what is currently happening to their supply chain performance and provide guidance on how best to deal with these disruptions faster and more effectively.
According to the Aberdeen Group report 85% of best-in-class retailers have visibility of their live supply chain, while only 58% of all retailers have similar capability, despite the fact that investment in supply chain visibility pays off in the form of a greater number of on-time shipments and lower overall costs.
A much smaller number could drill down through their data to SKU level, to see what items, products and orders are connected to particular shipments or issues.
In summary; 78% of best-in-class retailers had access to the type of inbound supply chain data needed to make decisions in the face of a disruption (such as where to allocate limited inventory or whether shipments could be rerouted) against just 48% of other retailers.
One particular point of weakness for retailers was a lack of visibility into supplier quality and their
manufacturing processes, according to a Supply Chain Quarterly review of the report.
They found that while 68%of best-in-class retailers have visibility into their suppliers’ quality and manufacturing processes, only 30% of all other retailers did.
Recent events as diverse as the Hanjin collapse and discovery of child labour in the ASOS supply chain highlight the risks associated with this lack of visibility.