Top tips for bridging the visibility gap in logistics

Challenges in demand forecasting, supplier relationship management, production efficiency, inventory management, and technology integration necessitate seamless collaboration among different systems. With these challenges businesses face potentially high costs associated with inaccuracies. In the US, retailers alone face an estimated annual loss of $2 trillion due to inventory inaccuracies.

Here, Chief Commercial and Product Officer of Dexory, Oana Jinga, discusses the lack of visibility within warehouse automation and shares the strategies and opportunities to close the Visibility Gap 

Currently, over 57% of organisations are ramping up their investments to strengthen their supply chains to make them more resilient. Warehouse Management Systems (WMS) are often considered the single source of truth in warehouses, yet errors in stock counts and suboptimal space utilisation can lead to visibility gaps. Accurate information is crucial in today’s competitive business environment, making visibility a key factor in operational resilience. Visibility involves tracking and monitoring goods, information, and resources in real-time across various stages, providing businesses with a competitive edge. However, only 6% of logistics companies achieve full visibility over their operations.

Achieving full visibility requires tracking each stage of goods movement in real-time. This fosters insights, proactive decision-making, and collaboration among supply chain partners. A comprehensive view enables organisations to identify bottlenecks, optimise processes, and enhance overall efficiency. The ability to track inventory, monitor shipments, and manage operations precisely exemplifies the transformational power of visibility.

Understanding the visibility gap in warehousing

Modern logistics operations are complex, involving numerous stakeholders and often fragmented, legacy systems. Data silos hinder real-time tracking and monitoring. Achieving full visibility demands a seamless flow of data.

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

1. Fragmented systems: Disjointed systems create data silos that impede information flow.
2. Inefficient communication and human error: Delays and inaccuracies in information sharing exacerbate visibility gaps.
3. Legacy technologies: Outdated systems lack the capabilities for real-time data exchange.

Implications of the visibility gap on business

A lack of visibility leads to several inefficiencies and risks:

• Increased operating costs: Inefficiencies, excess inventory, and disruptions raise operational costs and affect profitability.
• Customer dissatisfaction: Delayed shipments and stockouts can damage a company’s reputation and lead to dissatisfied customers.
• Risk exposure: Limited visibility hinders effective risk management, leaving businesses vulnerable to unforeseen challenges.

Closing the visibility gap

Annually, 6,500 hours are spent on tasks like cycle counts and stock checking, yet data is only partially gathered, quickly becoming outdated.

To close the visibility gap, businesses should:

• Real-time data: Invest in integrated systems for instant updates on inventory, order status, and shipment tracking.
• Advanced analytics and predictive monitoring: Use AI-powered analytics to anticipate demand, optimise inventory, and identify bottlenecks.
• Technology infrastructure: Upgrade and integrate technology within the warehouse, including WMS, IoT devices, and cloud-based solutions.
• Collaboration: Foster collaboration with supply chain partners through shared platforms and standardised data protocols.
• Employee training and change management: Train employees on new technologies and implement change management strategies.
• Continuous improvement: Cultivate a culture of continuous improvement, regularly refining processes based on data analytics and feedback.

By implementing these recommendations, warehouses can make inventory management more accurate and efficient, respond quickly to changes, and tackle potential problems before they arise. These strategies help reduce the risks of the visibility gap and improve overall efficiency, ensuring smooth operations and clear visibility. Ultimately, this leads to the minimised risk of penalties and strengthens market position.