How to maximise supply chain tech investments
Businesses are spending millions on emerging technologies to handle supply chain challenges. How can they make the most of their investments?
To navigate the complexities of the modern supply chain, businesses are turning to technology.
Research by supply chain platform Blue Yonder shows that 71% of UK organisations have implemented new technology over the last 12 months to reduce disruption in the future. One in 10 organisations are investing more than $25 million.
Organisations have earmarked planning, forecasting, and inventory management as top areas for technology spending. They’re seeking a real-time, end-to-end view of their supply chains, often leveraging technologies such as artificial intelligence (AI) to recommend and optimise actions.
And it’s not just AI. Technologies like big data, machine learning (ML), 5G and the Internet of Things (IoT) are also delivering in terms of supply chain resilience.
Dave Food is head of supply chain at Board International and postgraduate supply chain lecturer at the University of Warwick. He says the most critical technologies are those that enable intelligent, integrated decision-making.
Food singles out technologies that enable ‘intelligent planning’ as indispensable for driving collaboration and alignment across all departments. Essentially, intelligent planning is the process of analysing data to generate actionable insights. It enables cross-functional teams to unify strategy, finance and operations to plan smarter, make better decisions, and take control of performance.
Integrated Planning is key to planning intelligently. It is crucial for creating an autonomous supply chain management system.
“One of the undervalued benefits of intelligent planning is the improvement of cross-functional collaboration,” says Food. “For businesses looking to improve their customer experience, Integrated Planning can help improve supply chain visibility, allowing intelligent identification of issues related to stock shortages and capacity constraints.”
By enhancing supply chain performance and customer relationships through tech investments in decision-making, advanced analytics and visualisation, Food says businesses can grow and become more competitive. Indeed, a Gartner survey shows that 61% of business leaders see technology as a source of competitive advantage. Critically, these technologies are then used to drive even greater efficiencies across the business.
Conversely, Food believes that businesses that do not invest time and capital into improving their visibility and planning for different scenarios will struggle with cashflow and even fall by the wayside.
“The benefits of greater business visibility can be compared to a human’s peripheral vision,” he explains. “It allows companies to see things they might not have seen before, resulting in reduced risk, improved decision quality and cost savings, as well as improved performance and streamlined operations.”
For example, businesses can optimise vehicle and driver utilisation by leveraging intelligent planning across multiple fleets and operating sites.
“To increase accuracy, it is important to use the latest forecasts within the organisation and to update plans when new information becomes available. By combining IoT sensors, GPS tracking and edge computing with external data sources, it is possible to better understand real-world constraints, enabling optimisation of large-scale, volatile, and complex transport plans,” says Food.
The planning process often allows businesses to understand risks, mitigate them with some buffers, and then execute accordingly, Food says. Such flexible plans mean businesses will be prepared to navigate turbulence in times of uncertainty.
“It is only through use of technology that an optimised supply chain can be orchestrated by streamlining and synchronising operations and logistics processes, as well as using intelligent planning platforms to analyse and use massive amounts of data,” he adds.
“This will help ensure the supply chain is aligned with procurement, production, warehousing and transport.”
Technologies like big data, AI, 5G and IoT are enabling collaboration and improving communication across organisations. By automating and streamlining administrative processes, businesses are then free to focus on more strategic, revenue-generating initiatives.
Organisations are making huge investments in supply chain technologies. By leveraging the latest tech and trying to maximise those investments, businesses are in a stronger position to weather the current disruption to the supply chain.
Drivers of supply chain innovation
What trends and technologies are moving the needle on supply chain resilience? Gary Connors, partner at business transformation specialists Oliver Wight EAME outlines what should be on the radar for supply chain leaders.
It may have been inconceivable to many that Amazon would be a disruptive influence to supply chains a few years ago. However, we have seen this giant make a splash as it entered the pharmacy sector, delivering medicines overnight and cheaper than your local pharmacy. We have seen them devastate the electronics sector with cheaper offerings delivered quicker. They are now entering the convenience food sector and proving to be a disruptive influence. They may even extend to banking in the foreseeable future and that is a scary thought for the large, inefficient behemoths of the past. While Amazon may be the flag bearer of this wave it is not alone. Google, Facebook (meta) and Uber offer a few examples of how agility and focus can be leveraged in a rapidly changing landscape.
Known as a platform for secure trading of cryptocurrencies, blockchain is less known as a secure platform for processing supply chain transactions. With the colossal number of transactions that are needed to record the movement of goods through a supply chain and the even larger cost of administering these transactions through third parties, Blockchain is well placed to disrupt this activity by making the transactions quicker and cheaper. They do not have the critical mass to deliver this today, but woe betide those who ignore this threat.
Less than three years ago the thought of driverless vehicles on our roads was almost inconceivable. But for many people today this is becoming a reality. We are seeing automation in the vehicles that we drive in our daily lives, helping drivers keep in their designated lane and providing collision avoidance inputs when needed. As these automated inputs become the norm in our daily commutes, it must be obvious now how this technology can be applied to logistics vehicles very soon to the extent that human drivers for these vehicles will not be needed. The velocity with which goods move through the supply chain will improve exponentially. The more worrying outcome will be how we deal with the mass of professional drivers that will become unemployable as a result.