In the globalized business world, supply chain optimization is crucially important for companies. The focus has shifted significantly in recent years: instead of concentrating exclusively on raising internal efficiency, meeting customer expectations is increasingly becoming the focus of strategic corporate alignment. Nowadays, customers appreciate being able to trace the route and origin of goods in order to make fact-based decisions about their purchases. In our blog article, we explain how real-time transparency in supply chain management (SCM) can help to significantly improve the customer experience.
The importance of real-time transparency in SCM
Logistics managers are facing multiple challenges, including supply disruptions, cyber threats and the urgent need to implement environmental and sustainability standards. A transparent supply chain is proving to be a key factor in capturing, processing and sharing information about the status of the supply chain in real time. This includes tracking goods, orders, inventory and other relevant data. End-to-end visibility in supply chain managementenables companies to increase their responsiveness and find alternative solutions at an early stage in order to ensure the continuous flow of goods: If there is a change in one part of the supply chain, this triggers a corresponding reaction in the other areas. Thus, those responsible are always informed about the current status as well as the consequences of changes.
Real-time transparency helps companies to plan and control production and procurement processes more precisely, thereby avoiding bottlenecks or excess stock in the warehouse, making better use of resources and reducing costs in the long term. However, it is not only the companies themselves that benefit from precise traceability of the individual stages of the supply chain: There is now another crucial variable in supply chain management that places an increased value on transparency: The customers.
How customer expectations have changed
In a world of digital commerce characterized by e-commerce and online shopping, customers today expect a seamless, reliable and fast, but also highly personalized delivery experience. Most products are now available at their fingertips. To ensure that needs are met as quickly as possible, the requirements for goods deliveries have also increased.
However, customers do not only want to know the exact time when the goods that they have requested are due to arrive, they also want to be able to track the status and progress of their order in real time. At the same time, they place increased value on sustainable and ethically responsible production and delivery practices and want to know from companies how a product is manufactured and transported.
Customer expectations at a glance:
- Orders that are only a few clicks away: Products should be available at all times and delivered as quickly as possible.
- How sustainable are products or services? Companies are increasingly being asked to provide information on their carbon footprint and other environmental data.
- Growing need for trust and security in transactions: The delivery status of goods should therefore be digitally visible and traceable at all times.
- Continuous communication: With the ability to track the progress of deliveries in real time, many customers expect to be kept proactively informed of the current status and potential delays.
Logistics managers must therefore possess a detailed and up-to-date data tracking along the entire supply chain in order to be able to pass on the relevant information to their customers. This pays off: Companies that ensure on-time deliveries and are able to integrate real-time visibility into their supply chain and meet customer expectations can gain a decisive advantage over the competition. But how can multilateral data exchange be enhanced in order to achieve comprehensive end-to-end visibility of the entire supply chain?
Real-time transparency: Digital solutions help to improve the customer experience
For a 360-degree view of the supply chain, it is essential that all supply chain players involved (producers, suppliers, retailers, etc.) network within the SCM software and provide relevant data and information. Thus, the individual disciplines of a supply chain are no longer viewed individually, but increasingly from a cross-company, process-related perspective. Using cloud computing, for example, information can be shared and synchronized in real time across different locations, which facilitates collaboration along the supply chain.
The Internet of Things (IoT) uses RFID and sensors to precisely track and monitor the current location and condition of goods and inventories. That way, customers can be provided with constantly updated location data on goods. Big data and data analysis help to create forecasts for realistic delivery times and identify bottlenecks at an early stage: Companies can gain valuable insights by collecting and processing large volumes of data, make informed decisions and communicate potential changes regarding delivery times to customers. Artificial intelligence and machine learning, in turn, identify anomalies in the supply chain and provide personalized recommendations for customers.
Last but not least, mobile applications and user interfaces also play a crucial role in increasing real-time transparency by providing the interface through which customers can find out about the status of their orders and track the progress of their deliveries.
However, the technologies and solutions mentioned are not yet being used across the board: as our latest Hermes Barometer shows, many companies still have potential for optimization with regard to the use of intelligent tools. At 79%, the majority of the companies surveyed agree that digital technologies make a decisive contribution to increasing supply chain transparency and optimizing processes. However, only one in five companies (20%) state that they already have a digital real-time supply chain.
Conclusion: Transparent supply chains – always keeping an eye on customer needs
A shared view of the data and open, transparent communication within the supply chain create an environment of mutual understanding. Supply chain players benefit from a continuous exchange about innovations, resources, strategies and goals. They are also able to meet the rising expectations of their customers, who want to digitally track every step of their order. However, while many companies are aware of the importance of intelligent technologies to increase supply chain transparency, only a few have a digital real-time supply chain to date. This is where external expertise can help: Logistics service providers such as Hermes International offer specialized SCM software and provide support in evaluating existing data in order to optimize each supply chain with a unique, tailor-made strategy. That way, companies can not only operate more efficiently and resiliently, but also meet high customer expectations – a win-win situation for everyone involved.