From backrooms to boardrooms: How data-led supply chain strategy drives business resiliency and agility

Supply chain strategy has emerged as a priority topic among senior leaders.?The war in Ukraine, energy costs and inflation have introduced new challenges that are resulting in manufacturing and fulfilment delays. For example, German car production in early 2022 was down 32% versus 2019 due to a shortage of primary product inputs. This threatens revenue and profit margins. According to Accenture, supply chain disruptions could amount to a €242 billion hit during 2022-23. That’s 2% of Europe’s GDP.??

There are longer-term implications as well.?A robust supply chain is not a separate backroom entity. It is synonymous with a company’s brand itself. To put a finer point on this: if you’re in the businesses of providing Christmas decorations for the retail sector, a January 3rd delivery date simply is not going to work – or be soon forgotten by the disappointed customer.??

Moreover, it's not just businesses that will be impacted. Communities will feel the effect too. Supply chain pressures are contributing to higher costs for consumer essentials including food and clothing.???

Today, leaders are fundamentally rethinking the supply chain’s role in their business. Controlling costs remains a priority. But the c-suite is also looking at how data-led supply chains can help provide insight to pre-emptively troubleshoot and trend-spot, help staff make more informed decisions and bring more value to customers.??

“Supply chains matter. The plumbing of global commerce has rarely been a topic of much discussion in newsrooms or boardrooms, but the past two years have pushed the subject to the top of the agenda…supply chain leaders now find themselves in an unfamiliar position: they have the attention of top management and a mandate to make real change.” – McKinsey?

Successfully building and managing a resilient supply chain that boosts agility and competitiveness all comes down to data. However many companies do not have visibility across their supply chain due to data silos sitting across vendors, fulfilment centers, manufacturing plants, etc. So, spotting bottlenecks and staying on top of supply and demand fluctuation is a real challenge.??

Moving to the cloud is the foundational step in being able to capture, store and analyze supply chain data. Diverse data sets become transparent and reportable. Supply chain data is turned into a real business asset.

What’s surprising for many customers I work with is that this transformation can be approached in a way that rapidly yields cost-saving benefits, while paving a path to future growth at the same time.??

In fact, digitizing a supply chain does not need to take years to yield ROI. Impactful transformation can be achieved in a matter of weeks.??

Technology like Microsoft’s Supply Chain Platform is designed to help companies transform on their terms, without having do a ‘rip and replace’ overhaul on existing infrastructure. Engineered to sit on top of enterprises’ existing ERP and SCM investments, the technology helps businesses capture new revenue. Customers can quickly apply AI tools that turn supply chain data into business insights. This includes the ability to actually predict and get ahead of supply and demand issues.????

The technology is also designed to reduce time to value. Its Microsoft Supply Chain Center works natively with an organisation’s supply chain data and systems. This means supply chain insights can be quickly delivered to a single command center for everyone from the supply chain planner to logistics and inventory managers who need to make fast and effective decisions based on real time data.??

We’re excited to announce Daimler Trucks North America, iFit, Kraft-Heinz and Metcash as some of our Supply Chain Center preview customers, who will be using the technology to make processes more efficient, optimize inventory allocation, and assess risk and opportunities faster than ever before?

Having just returned from COP27, it is important to me to note that while the ROI of a data-led supply chain can be recognized relatively quickly, there is a longer-term benefit that is just as important.? Supply chains are one of the most important – and challenging – components for companies to address as they work towards their carbon reduction goals.??

A report from WEF shows that the world’s essential supply chains (food, consumer goods, constructions, etc.) account for more than 50% of the world’s CO2 emissions. UNFCCC’s High-Level Climate Action Champion, succinctly summarized what is at stake: “Supply-chain decarbonization will be a ‘game changer’ for the impact of corporate climate action.”??

As I noted above, a modern supply chain allows organizations to automate capturing, storing and analyzing data. This includes sustainability related data. This is so very important for two reasons. First, you can only manage what you can measure.? Second, the ability to access timely, accurate data means that data can inform decisions that will have real impact.??

For businesses in the earlier stages of their supply chain journeys, I strongly encourage finding trusted partners who bring the right mix of sector expertise and tech know-how. That is why we support our customers with a partner ecosystem that includes leading advisers and implementers (such as Accenture, Avanade, EY, KPMG, PwC and TCS) as well as a deep bench of solution providers (Blue Yonder, Cosmo Tech, Experlogix, Flintfox, inVia Robotics, K3, O9 Solutions, SAS, Sonata Software, To-Increase Software – to name a handful).??

The key is to keep advancing on that journey. And the winning strategy is one that prioritizes progress over perfection.??

For helpful insights, do join our Supply Chain Reimagined event on 16 November.????