Building Resilient Supply Chain with Digital
The coronavirus pandemic has had a clear impact on supply chains affecting manufacturers, wholesalers, and retailers globally. The pandemic has brought forward one of the major supply chain vulnerabilities: the inability to react to sudden, large scale disruptions. According to a recent global survey, following are some of key findings on the effect of coronavirus pandemic on supply chains.
Unpreparedness for the Pandemic
Only a little over half of the enterprises reported having a plan in place to counter the supply chain issues arising due to the pandemic. However, many organizations now plan to formulate a comprehensive pandemic plan to cover any supply chain issues that can arise in the future.
Supply & Demand Disruptions
Close to 75% enterprises saw inimical effect on their supply side due to the pandemic and around 65% reported the same on the demand side. However, enterprises in pharmaceuticals, IT, telecommunications saw increase in product demands.
Supplier Diversification & Manufacturing Decentralization
Post COVID, many enterprises are looking to diversify their supplier base. Along with supply vulnerability, increasing labor costs during COVID-19 is forcing enterprises to diversify their supply chains. Enterprises are also looking to decentralize their manufacturing capacity by bringing production home and reducing costs via automation.
Deeper Due Diligence
Due diligence tasks such as identifying company’s key direct suppliers, understanding their supply ability and assessing potential risks has been traditionally restricted to Tier-1 suppliers. However, due to disruption beyond tier-1, 65% of enterprises are looking to do a deeper due diligence going forward.
Enterprises are exploring various ways to build resiliency into their supply chains in the light of current events. As the majority of enterprises globally are in a path to recovery, leaders are actively looking for ways to strengthen operations. Enterprises are increasingly digitizing at unprecedented speed and scale. According to a recent IFS Study, 70% of businesses have increased or maintained digital transformation spend amid the pandemic. Supply chain operations are plagued with complex, paper-based and siloed processes. Enterprises that implement digital transformation solutions in their supply chains see immediate and long-term benefits.
Let us look at some of the key advantages of building a resilient supply chain with digital.
Visibility
The most important benefit of building a resilient supply chain is visibility. According to a recent survey, more than 60% of enterprises say that a lack of visibility into their supplier’s practices is a matter of huge risk. With automation, enterprises can ensure task compliance, reduce risks, address quality issues and enable safe practices.
Flexibility
Enterprises are increasingly understanding the importance of ability to respond to unexpected events that can create disruptions. Automation can help in efficient collaboration with suppliers and interconnectedness that can give full control on inventory management and responding to challenges.
Control
As a result of increased visibility e.g., knowing real-time inventory status can give enterprises better control on your business. Automation systems. Let us look at some of the best digital transformation practices in supply chain.
Information Management
Often, available data is handled manually (data collection in a system, paper-based data handling, etc.) and not updated regularly and then remains unchanged for years. Enterprises are increasingly implementing automated information management systems that can integrate siloed information and leverage that information to achieve better planning and execution.
Supplier Onboarding
Enterprises need to put in place a digital onboarding process to monitor supplier requests, supplier profiling and segmentation, as well as an approval workflow to automate and track supplier onboarding approvals.
Enterprises are increasingly using self-service portals for suppliers, agents, and buying teams to collaborate during the sourcing process.
Supply Planning
Enterprises can seamlessly share real-time supply forecast updates electronically with supply partners (suppliers, factories, and agents) through automated systems. This enables factories to analyse fluctuations in demand and plan ahead collaboratively.
Order Issuance
The order issuance process needs to be completely automated systems. Issuing orders in real time enables suppliers to respond in real time and reduce delays in order issuance and confirmation.
Supply chain technologies always evolve to meet the needs of global supply chain. According to a recent survey, some of the key technologies being adopted by supply chain and logistics companies include:
Robotic Process Automation
RPA is being used to automate and accelerate supply chain tasks that were once performed manually. Enterprises are employing RPA to automate repetitive administrative tasks in supply chain processes and integrating and automating data-driven activities as well. Some of the RPA use cases in supply chain are in the areas of order processing and payments, supplier selection, email automation, inventory management, logistics and shipment tracking, supplier onboarding, sales order creation among others.
Digital Signature
As enterprises continue to carry out their processes virtually, non-traditional means of document execution is being employed increasingly. Digital signatures present an effective solution to one of the challenges of working from home i.e., processing transaction remotely.
Advanced Analytics
Advanced analytics are gaining popularity in being deployed in areas such as product quality testing, dynamic pricing etc. The availability of real-time supply chain data such as dynamic sales data and weather patterns provides the ability to make accurate predictions and recommendations.
IoT
Supply chain management has been one of the leading beneficiaries of IoT and the technology is facilitating improved efficiency, performance, and business output through connected supply chain management. IoT finds application in live tracking of movement of goods, in-store merchandise tracking, fleet management and several others.
Artificial Intelligence
Through self-learning and natural language, AI solutions can help automate various processes in the supply chain such as production planning, demand forecasting or predictive maintenance. According to a recent survey, 61% of executives report decreased costs and 53% report increased revenues as a direct result of introducing artificial intelligence into their supply chains. AI provides enterprises with end to end visibility, reduces manual work and facilitates informed decision making.
COVID-19 is unlikely to be the last event that will disrupt supply chains and have a detrimental impact on global economy. Digital transformation can help build resilient supply chains and make organization better prepared for unexpected events.