What is a consequence of poor supply chain visibility?

Poor supply chain visibility can lead to increased inventory costs and management challenges, which is a significant consequence for various reasons. When companies lack clear visibility into their supply chain operations, they may struggle to accurately forecast demand, manage inventory levels, and monitor the flow of goods. This inability to see what is happening throughout the supply chain can result in overstocking or stockouts.

Overstocking occurs when businesses order too much inventory without a clear understanding of their actual needs, leading to increased holding costs, such as storage fees and potential obsolescence of products. Conversely, stockouts can result in missed sales opportunities and dissatisfied customers, leading companies to expedite orders, which often comes with higher costs.

Additionally, poor visibility can hinder effective communication with suppliers, making it difficult to make informed decisions regarding inventory replenishment or adjustments in production. As a result, the challenges that arise directly translate into higher costs associated with inventory management and can negatively impact overall operational efficiency.

In sum, when supply chain visibility is lacking, businesses are more susceptible to increased costs and complexities in managing their inventory, solidifying option B as the correct answer.