Last month, a Capgemini Consulting survey of 300 companies in Europe, North America, Asia and Latin America found that collectively, the companies’ top supply chain projects for 2010 are ones that allow businesses to more effectively respond to customer demand and improve internal business processes. 

With that in mind, it makes sense that the study also found, for the second year in a row, that the top supply chain IT project among those surveyed is improving supply chain visibility. 

That’s because increased visibility can help your business operate more effectively in a variety of ways, from better meeting customer demand to improving the customer experience to securing better financing. 

Visibility is important along the entire supply chain, from the source to the shelf to the shopper, and back again. Let’s discuss a few areas where visibility is especially important, and ways you can improve your business with increased visibility.

Sourcing goods from overseas suppliers has the potential to create visibility gaps in your supply chain where you lose the ability to track your shipments. Companies may find it especially difficult to maintain visibility when their inputs or finished goods change hands during the import process.

Don’t accept visibility gaps just because your shipments are coming in from overseas. Losing the ability to track your shipments even briefly while importing can make it difficult to optimize inventory levels to meet consumer demand. It can also make it difficult to obtain reasonable financing for the cargo you’re importing.

Look for a shipping partner with a strong presence in markets from which you source your goods, and leverage that to bridge gaps between the multiple parties involved in getting your imports to the U.S. 

Your business may also benefit if your shipping partner can provide attractive cargo financing options through a financial services arm. Because the shipper maintains clear visibility throughout the shipping process, the financial services arm may be able to provide attractive financing rates. 

Providing your customers with tracking capabilities isn’t a new concept, but the channels through which you can provide it have expanded. Years ago, the phone was a customer’s only tracking option; now, customers can log onto the web and even use their mobile devices for instant updates. Advanced customer solutions allow shippers – and their customers – to receive an e-mail alert and tracking number, PRO number, house air waybill or house bill of lading when an item ships, or a heads up if an exception occurs or if more information is necessary to complete delivery. 

For customers waiting on an important shipment to arrive, being able to track its progress is crucial. For instance, the owner of a small, single-employee craft business may need to monitor the movement of supplies so she can provide timing updates to her own customers as they eagerly await her finished products. Or, a customer may be anxiously tracking a last-minute web purchase to make sure it will arrive in time for the holidays. It’s important that customers have the peace of mind knowing where their packages are and when they’ll arrive.

Without the technology to make it convenient for your customers to track their shipments, you risk losing their future business. Thankfully, technology to accurately track your shipments and provide your customers with updates is available. And, the right tracking software can also help you dramatically cut down the time it takes to fulfill and process orders internally, making it easier on your staff and making time-in-transit as short as possible.

For example, one of our customers, Florida-based Vology Data Systems, ships new and pre-owned networking and telecommunications systems around the world. By using UPS visibility technology, Vology keeps its inventory moving and accelerates the billing process since the company can bill for an item as soon as it has a tracking number. 

Applications, or “apps,” for mobile devices are another way to increase visibility for your customers. UPS, for example, has launched mobile shipping apps for the iPhone, BlackBerry and Android that can create and track shipments, calculate shipping rates and time-in-transit, and then find the nearest location to drop off a package.

Visibility during the returns process is also important. If you sell goods, it’s inevitable that at least a small percentage will be returned for various reasons; if you sell many goods, processing returns may even be routine.

For many small and midsize businesses not knowing what returns are coming in and when they’ll arrive can wreak havoc on your efforts to optimize inventory to meet demand and avoid costly markdowns. 

Tracking returns as they’re en route to your business can be as simple as working with your shipping partner to generate a special return label to be included with shipments to your customers, or to e-mail a return label at the time of purchase. Once scanned at the start of its journey back to your business, the label will notify you that the return is coming, and when you can expect it to arrive.

Shipping and supply chain visibility can impact many facets of your business, and as the Capgemini Consulting survey showed, supply chain visibility continues to be a top supply chain consideration for many businesses. If you haven’t already, consider making it a top priority for your business, too. 

Jordan Colletta, Vice President of Customer Technology Marketing, UPS, is responsible for the marketing activities of UPS’ customer-facing technology and Jordan is refining UPS’s e-Commerce strategy, as well as delivering new solutions through the development of Internet-based technologies, applications and wireless access.