GE Appliances was in the midst of a digital supply-chain upgrade when the coronavirus pandemic hit, disrupting global supply lines while consumer demand soared for the company’s refrigerators and washing machines. The pandemic, reports The Wall Street Journal (Dec. 2, 2020), provided GE a fertile testing ground for digital tools intended to help balance manufacturing and demand by connecting parts of its supply chain that had been operating on separate tracks.
The effort took on new urgency as skyrocketing orders cleared out the appliances the company kept on hand. Previously, the company made products based on demand forecasts then shipped the finished goods to distribution centers to wait for orders. The real-time visibility GE Appliances was seeking in its supply-chain plan proved critical to the company’s response to rapid swings in demand as consumers first hunkered down and then sought the equipment for their homes to outlast the lockdowns.
The new technology, from supply-chain software provider Blue Yonder, tracks the movement of goods from manufacturing plants to distribution centers. The software integrates that data with customer orders, using machine learning to anticipate delays and shortages and help companies decide how to allocate limited supply. The tools helped pinpoint one cause behind a rising order backlog that came even as the company’s inventory reserve was growing. It turned out some partial shipments weren’t being sent out under procedures put in place before the pandemic, when some customers wouldn’t accept incomplete orders.
Blue Yonder’s technology now pulls information from different programs, such as the company’s transportation or warehouse management systems, and harmonizes the data so managers can easily see how a delayed inbound shipment might affect customer orders or inventory levels.
Classroom discussion questions:
- What is the strength of digital supply chain tools such as that in this article?
- How have supply chain programs worked in the past?