Global supply chain disruptions increased by nearly 40% in 2024. According to this McKinsey article from October 2024, supply chain disruptions continue to occur due to reasons ranging from missile attacks on commercial shipping to flooding in Europe. 

The McKinsey article also highlights the growing concern among supply chain executives that their leadership team does not understand the risks to supply chain operations. Only around a quarter of the leadership team has formalized processes to tackle supply chain disruptions.

Despite recent improvements, there are significant gaps when it comes to supply chain visibility. While basic transparency improved from 2023 to 2024, deeper-level transparency has fallen from 37% to 30% in the same period.

Fragmented data drives most organizations' continued reliance on "legacy" supply chain systems. Without real-time supply chain visibility, these organizations will struggle with operational efficiency, delayed deliveries, and higher risks.

Here’s why companies need real-time visibility into their supply chain operations.

The Need for Real-Time Supply Chain Visibility

Simply put, real-time supply chain visibility is the real-time understanding of product flow across the entire supply chain—right from procurement to the final delivery. This level of visibility prepares supply chain managers to address any disruption with the right solution at the right time.

With the growing complexity of global supply chains, enterprises are demanding supply chain solutions with predictive capabilities and real-time data insights.

How can a lack of real-time visibility impact supply chain operations? The following are the areas that experience the greatest impact:

1. Production planning: Without accurate demand forecasting, manufacturing companies cannot plan their production capacity. Excessive inventory (or supplies) can either lead to overproduction or high inventory carrying costs. At the other end, insufficient inventory can lead to stockout issues, thus delaying the production schedule and capacity.

   Real-time supply chain visibility can improve production planning and scheduling, as companies can accurately optimize their inventory levels according to the current (and future) demands.

2. Sourcing or procurement: Along with a fragmented supply chain, the lack of cross-functionality visibility can seriously impact collaboration between the companies and their supplier network. This fragmentation increases the chances of a delayed delivery from the supplier—as well as a mismatch between the expected product quality and what was delivered.

   With real-time visibility, companies can track their suppliers’ shipments continuously and take remedial measures in the event of any disruption or delay.

3. Production costs: Based on real-time supply chain data, manufacturers can plan their next production schedule and capacity. This planning is based on "real" data—instead of guesswork, which can reduce both production costs and resource wastage. Manufacturers can also plan their work schedule by assigning the right workforce to their production tasks.

   With real-time supply chain visibility, manufacturers can reduce their production costs by: - Accurately predicting the required volume of raw materials or inventory items. - Reducing any wastage or idle time of production equipment and the labor workforce. - Optimizing the transportation route for efficient logistics, thus ensuring the on-time availability of production materials.

4. Order fulfillment​​​​​​: Distribution and logistics companies also need real-time supply chain visibility to avoid last-mile disruptions or delays. Last-mile deliveries are an important part of the overall supply chain, as they can directly impact customer satisfaction.

   Without last-mile visibility, companies cannot optimize the best transportation route, thus increasing their order fulfillment and delivery costs. On the other hand, real-time supply chain visibility can help identify and address challenges in order fulfillment.

How Platform Engineering Solves the Visibility Challenge

By unifying supply chain operations from procurement to delivery, AI-powered platform engineering can help enterprises gain real-time visibility. With platform engineering, companies can transform their production planning, procurement, production, and delivery.

Here’s how platform engineering can address each of the 4 challenges outlined in the previous section:

1. Production planning and demand forecasting: As a unified data platform, platform engineering can aggregate real-time data from varied sources, including sales, markets, and external data like weather trends and global economics. With its AI-powered demand forecasting capability, this platform can leverage machine learning algorithms to analyze these datasets and extract hidden patterns to make accurate predictions.

   With real-time data, manufacturers can dynamically adjust their forecasts based on customer behavior and market shifts, thus enabling them to lower their inventory costs. Similarly, by using real-time data insights, AI models can help manufacturers plan their production schedules.

   For example, a global retail company can leverage AI-powered planning to reduce its lead time by 30%.

2. Supplier collaboration and risk mitigation: Supplier collaboration is the "cornerstone" of every successful supply chain operation. Through its integrated supply chain platform, platform engineering enables companies to track their raw materials and items in real time. With this collaborative approach, manufacturers can synchronize their production schedules with their inventory levels. This method goes a long way in reducing inventory-carrying costs and production delays.

   Additionally, with AI-powered risk mitigation, companies can use platform engineering to detect any potential anomalies or disruptions in their supplier network.

   For example, a manufacturing company can reduce procurement delays by 40% with real-time insights into its sourcing.

3. Smart factory and production efficiency: Powered by AI and IoT technology, smart factories can now monitor the performance of their manufacturing equipment and production processes on a real-time basis. Smart manufacturers can also use IoT-enabled sensors to monitor their supply chain deliveries—along with an accurate estimate of the delivery time.

   Real-time visibility in manufacturing processes can help in improving:

   - Operational efficiency

   - Predictive maintenance

   - Quality control

   For instance, AI-powered quality control works to detect product defects at an earlier stage, thus ensuring high-quality products that comply with industry standards.For example, a global pharmaceutical company can comply with FDA regulations with real-time production monitoring.

4. Real-time logistics and predictive routing: With real-time visibility, logistics companies can unify their data, thus providing a holistic view of their product’s location, condition, and transport route. Companies can identify and address bottlenecks such as shipment delays on a real-time basis. With the use of event-driven architecture, logistics companies can dynamically reroute their delivery path to avoid supply chain disruptions.

   Similarly, blockchain technology in supply chain operations can track and record each milestone in the shipment process. Every event from the initial manufacturing to customs inspection is recorded in this digital ledger, which also reduces reliance on paper-based documentation.

   As an outcome, logistics companies can reduce delayed deliveries by 25% with real-time shipment tracking technology.

Business Outcomes: What Organizations Gain

Real-time supply chain visibility is beneficial to organizations in the following ways:

1. Reduction in supply chain disruption: With real-time visibility and insights, supply chain managers can make faster data-driven decisions, which improves their business responsiveness. For instance, they can accurately predict any delays along a particular delivery route—hence can dynamically switch to an alternative route. Such an approach is highly effective at reducing the business impact of supply chain disruptions.

   For example, a global retail company can reduce its delivery time by 30% through real-time shipment monitoring.

2. Cost reduction in inventory management: With AI-powered demand forecasting, supply chain management tools can reduce the cost of storing and maintaining excess inventory levels. At the same time, manufacturers can avoid the problem of stockouts due to overconsumption. Through automation, manufacturers can automatically reorder inventory items whenever they fall below a threshold value.

   For example, a global manufacturer can save up to $10 million each year through automatic inventory reordering.

3. Adherence to supply chain regulations: With real-time supply chain visibility, organizations can communicate with their suppliers at every stage of the entire delivery process. This ensures that suppliers comply with their service level agreements and meet regulatory requirements such as:

   - Environmental regulations

   - Worker safety guidelines

   - Import and export measures

   Automated supply chain tracking simplifies regulatory compliance by recording each milestone in the entire process. For example, a pharmaceutical company can improve its FDA compliance with real-time supply chain monitoring.

Future Outlook: The Next Frontier in Supply Chain Visibility

Going forward, digital technologies like AI and blockchain will continue to reshape supply chain visibility with real-time data. Using digital twins, companies can create a simulation model of their supply chain operations using real-time information and process snapshots.

Technologies like IoT and blockchain can further improve AI-powered supply chain risk mitigation strategies. While IoT-connected sensors can provide real-time data for AI models, blockchain tools can improve transparency by detecting fraudulent transactions.

On a similar note, edge computing can address high latency issues and facilitate real-time data processing for faster decision-making.

In summary, supply chain enterprises need platform engineering – or a platform-first approach – to build resilient supply chains. By partnering with Xoriant, you can leverage our expertise in platform engineering to build business value at a faster pace.