Tag: digital supply chain

Good OM Reading: Supply Chain Skills in a Digital Era

Rapidly evolving technologies are having a transformational impact on supply chains, writes EY’s short new report called Supply Chain: Skills for the Digital Era. Organizations are testing and applying emerging technologies such as robotic process automation, AI, augmented reality, internet of things and blockchain to drive higher performance across their supply chains. This increasing digitization and the resulting proliferation of data has provided supply chain professionals with greater insight. Platforms can now bring together data into a single ‘real time’ view while advanced analytics and AI can drive additional insight and automation. Such timely insight significantly improves business forecasting and decision making.

Businesses are trying to cope with shifts in demand, shorter product lifecycles and ever increasing innovation, and these technologies are enabling them to do this better. For example a UK National Health Service Trust used analytics to simulate and scenario model patient flows and staffing models to inform the physical design of a new hospital wing. We now have aircraft assembly workers using augmented reality googles to show them how to build the aircraft and IoT Sensors predicting when a piece of equipment will fail and proactively re-ordering it.

A major force impacting on the profession is the move to ‘always on’ supply chain.  It has seen supply chains move from monthly planning cycles, to making multiple decisions and changes throughout the day. Powered by real-time data, it enables scenario planning and informs daily decisions, for example, to change manufacturing schedules, modify an order that has already been dispatched or prioritize delivery to a high value customer.

This shift creates a new way of working for supply chain professionals.. Advances in supply chain technologies and supply chain concepts must be matched by advances in talent management capabilities. This includes accessing new sources of talent through the gig economy.

 

Good OM Reading: Automating Supply Chain Resilience

supply-chain-risk“Substantial investments in supply chain resilience have enabled companies to vastly improve their capacity for bouncing back after a disruption,” writes MIT Sloan Management Review (Jan. 2017). With the benefit of digital technologies, companies are using Big Data to identify supply chain risks and create early warning systems with much greater speed and precision. A digital supply chain is defined as “a customer-centric platform model that captures and uses real-time data coming from a variety of sources.” If a potential disruption is detected, the system decides on the best mitigation strategy and executes that strategy.

 A recent survey of 30 global companies found that 88% have incorporated elements of the digital supply chain into their business model. All of the companies surveyed were working to adopt game-changing technologies such as the internet of things and robotics. To keep pace, companies need to develop ways to automate resiliency. There are various strategies to make the supply chains more resilient, including diversification of the supplier base, establishing safety stocks, and planning for spare transportation capacity.
 One example is a loaded freight container equipped with sensors that track the temperature and humidity of the goods in real-time. The data is analyzed using business intelligence rules and shared with authorized entities in the extended supply chain. These parties can take action should a problem be detected. For example, if the container readings indicate that perishable cargo has been damaged due to an equipment malfunction, an order is automatically placed for replacement supplies while the damaged shipment is still in transit. Such remedial actions are not confined to logistics; financial and contractual terms can also be adjusted when an unexpected disruption occurs.
 Risk-prone supply chains are generally perceived as less secure by governments, and for that reason are more frequently selected for auditing, control, and inspection. These activities create unnecessary delays in supply chains.