Harnessing Tech in the Supply Chain – Why it is important

Supply Chain predictability remains the ideal that many organisations aspire to but few are able to achieve. We may use data to project future events or rely on historical nuances and experiences to predict other black swan events, having a concretely predictable supply chain is not an easy feat to achieve.

While global supply chains have always been vulnerable to shocks, COVID-19 takes the cake when it comes to events which have completely shaken the supply chain, in the recent past. Let’s put this into perspective.

• The WTO trade projections are that world merchandise trade volume will grow 8% in 2021, after a drop of 5.3% in 2020. Trade growth however is projected to slow down 4% in 2022 and remain below the pre-pandemic levels. These disruptions trickled down to other areas such as manufacturing, retail, construction among other areas.
• With over 50% of the world’s population in lock down a time, manufacturing, retail and transport sectors have shrunk significantly.
• The shipping industry is yet to recover from the shortage of containers and increased costs. The Drewry index depicts a quadrupling of the cost to ship a 40-foot container i.e. June 2020 vs June 2021. The Hellenic shipping news report attributes this to various logistics events including the Suez Canal blockage in March and bottlenecks at gateways in Southern California and China’s Yantian port that have tied up ships at sea for days and weeks at a time, with the backups rippling across supply chains and leaving containers in short supply

How then can Supply Chain harness technology to realize desired business outcomes?

We are all aware of the numerous technological advancements – from IIOT, AI, RPA, Smart Contracts, Block Chain, etc. These are distinct technological advancements that if applied and integrated will infuse greater agility into the supply chain, hence the term layered technologies. Layered technology is simply the integration of the various technologies in the supply chain with the objective of improvement – agility, visibility and transparency and faster business insights.

Source: https://topo.cc/technology-in-supply-chain-management/

Let’s look at three technological advancements that can improve your output.

1. Automation

Automation has been successfully deployed in the supply chain with proven improvements in operational efficiency. Robotic Process Automation (RPA) where deployed to fast track process , has significantly improved turnaround times and minimized human errors. Areas of process automation include payment and invoice processing, order fulfillment and in inventory management. Further,?Automation may be deployed to warehouse operations through the use of autonomous mobile robots (AMRs) to handle the labor intensive processes. The deployment of Robot, layered with RFID and AI is set to revolutionize customer responsiveness. The Grandview?valued the RPA market size at US$1.57 billion in 2020, with a projected CAGR of 32.8% in 2028.

2. IIoT

The Industrial Internet of Things (IIoT) unlike IoT is B2B oriented. This refers to the application of smart sensors to improve manufacturing processes. The Smart sensors enable the detection of inefficiencies and quick resolution through data collection, analysis and application. (As some ?clever person stated – ‘BI for AI’!).

?So where is this being applied you may ask?

Inventory tracking through the deployment of RFIDtags,Warehousing – in climate sensitive supply chain (temperature and humidity control), and in optimizing inventory level, Predictive maintenance, and last mile delivery logistics

?3. AI

Thirdly, Artificial Intelligence (AI), also among the top eight in technology trends in supply chain is a crucial addition. Beyond the initial use of AI in automated guided vehicles and objects working in defined and controlled environments, AI has evolved to become a significant contributor to altering business models and ecosystems, reshaping customer experience and playing critical roles in supporting decision-making.

McKinsey&Company in a 2017 study established that 64% of the working hours spent on manufacturing-related activities could be automated by technology existing at the time.

How much more is possible with the current technologies? And in how many ways can the supply chain potentially work around the challenges brought about by the pandemic, if we dig deeper?

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