Supply chain transparency: what it is and what it shouldn’t be

Supply chains have been in the spotlight like never before. Supply chain professionals’ contribution to organizational success went from undervalued to critical in the space of over a year as businesses worked their way through a global pandemic, weather events, and chip shortages, just to name a few. One of the core competencies that has emerged from these ongoing crises is the criticality of transparency into the supply chain. Supply chain professionals must have deep insights into component inventory, factory availability, and a myriad of other variables that go into delivering premium products to market quickly.

The importance of transparency

The value of supply chain transparency is highlighted in Flex’s COVID response early last year. Flex’s Pulse system helped our team quickly size and scope supply shortfalls and identified regional factory shutdowns to minimize disruptions to our clients. One of the most significant challenges supply chain professionals face is making difficult decisions with incomplete data. Thanks to Pulse and the experience of our supply chain professionals, we quickly understood the downstream effect of shortages and plant closures. It’s not an understatement when I say that transparency into our tier-1 suppliers was vital in helping our clients weather a tumultuous 2020.

Supply chain professionals parse through terabytes of data to identify risks and opportunities for our clients. There’s a finite number of competitors, materials, and demand within every product category, from consumer electronics to automobiles. Leveraging insights from our global supplier and distributor network and third-party data partner Resilinc, enables Flex to effectively bridge the gap between supply and demand for our international clientele of premium brands. Working towards this goal allows Flex to plan around global capacity to create realistic manufacturing and delivery timelines for businesses.

Supply chain transparency is often challenging to achieve for organizational reasons rather than technical ones. Many companies, including Flex, grow through acquisitions and must coordinate their operations and systems to create visibility for the supply chain team. We’ve made significant investments since 2015 to empower our team with enhanced transparency into components’ availability, location, price, and other variables utilizing a robust master data management program. Businesses lacking enhanced visibility into the supply chain may experience operations disruptions, a shortage (or overstock) of components, or product shipment delays impacting their bottom line.

Selective opacity in supply chains

Differentiation comes in many forms for businesses. People tend to think that premium product companies most commonly separate themselves from competitors through branding, price, and product innovation, but suppliers and distributors are also a vital component of many organizations’ “secret sauce.” These situations require supply chain professionals to honor clients’ privacy while still delivering impactful insights.

At Flex, we address this with a concept we call “selective opacity.” We work closely with our clients to identify their preferred suppliers, and their dedicated supply chain team uses Pulse to provide insights only into their specified value chain. Narrowing views into the global supply chain empowers Flex to optimize decision-making for individual organizations while also protecting our clients’ trade secrets. This separation is critical as we continue to work with top global brands that deliver innovative products to market.

Complete transparency is nearly impossible at this time, but that shouldn’t dissuade supply chain professionals from striving to improve. The ability to gain a comprehensive understanding of component inventory, pricing, and location, is critical in a globally distributed supply chain. Without it, an already difficult job becomes near impossible. Businesses that are already behind in building transparency into their supply chain cannot afford to wait any longer.