The need for visibility is one of the top four reasons manufacturers invest in supply chain management applications, according to AMR Research, Inc. The other three drivers -- demand management, radio frequency identification (RFID), and sales and operations planning -- all contribute to visibility.

Manufacturers strive for visibility because a supply chain is a complex web of interdependent parts. "The key is finding the right balance of service, cost, and resources," says Jay Burkholder, director of product management at Optiant, Inc. (Burlington, MA), a developer of web-based supply chain design and optimization software. "The only way to do that," he insists, "is to provide visibility end to end, from suppliers' suppliers to customers' customers."

"Everything starts with visibility," agrees John Cummings, chief marketing officer at i2 Technologies, Inc. (Dallas, TX), a provider of supply chain management software. "You can't solve business problems or orchestrate supply chain efficiency unless you have visibility," he insists. "You have to have visibility before you can plan or collaborate with partners," he adds. Otherwise all effort is spent reacting to events.

The Tool Chest

Today, there are a number of tools available to enhance visibility of both finished-goods and service supply chains. RFID technology, in particular, can deliver more real-time information about item movement than has been accessible in the past. Still, "a lot of companies really don't have visibility into inventory, orders, invoices, and shipments," Cummings notes.

"Visibility is important so all stakeholders understand what their part in overall performance is and the impact of their actions on other players," Burkholder says. "It's difficult for many companies to really comprehend what a silo-driven mentality is doing to other parts of the supply chain," he explains.

Optiant's PowerChain Inventory and PowerChain Planner modules allow a manufacturer to map its supply chain, creating a graphic display that shows flow and highlights critical parameters at each stage. "A lot of customers tell us that this is the first time they have seen the supply chain modeled out," Burkholder says. More importantly, the software also provides tools to help understand the impact of changes. As a result, manufacturers can look beyond the current situation and examine the implications of various actions.

The PowerChain software collects data from the resident system of record, generally an enterprise resource planning or advanced planning system, using web services to access information or ping the system. An open XML architecture makes it easy to integrate with virtually any other system including demand planning and factory shop floor control. Since many customers run an SAP R/3 system, Optiant offers a certified integration with SAP (Walldorf, Germany). It also offers an interface certified by Microsoft Corp. (Redmond, WA).

Cost varies depending on the size of the company and the number of modules used, but return on investment typically occurs within 120 days, according to Optiant. In some cases, the company claims, bottom-line improvements can add up to hundreds of millions of dollars due to revenue growth, asset reduction, cost reduction, and/or better execution.

Other visibility-enhancing systems such as Supply Chain Visibility (SCV) from i2 focus more on execution than planning, so the system not only shows where an item is, but also links to decision support systems so action can be taken. Its service-oriented architecture helps to integrate SCV with an ERP, order management, transportation management, warehouse management, carrier, production, or supplier system. Web portals also can serve as the interface between systems. According to i2, payback for the licensed software is typically less than one year.