Advanced digital technology: Making a smarter supply chain

July 28, 2016

When it comes to the challenges of managing today’s global supply chains, the phrase “drinking from a fire hose” comes to mind. 

When it comes to the challenges of managing today’s global supply chains, the phrase “drinking from a fire
hose” comes to mind. The Internet of Things (IoT)--that rapidly expanding, sensor-laden network of man, machine and devices--promises to fundamentally reshape supply-chain management by producing an exponentially growing stream of real-time data. Gartner suggests that by 2020 there will be more than 20 billion connected devices collecting reams of data, while the amount of data collected is predicted to double every two years.

Until recently, the technology simply didn’t exist to effectively harness and tame this rising tide. But that is changing now--and just in time, because supply chains are becoming more global and complex every day. Today, in a bid to deliver more value for their companies, supply-chain professionals are racing to adopt new end-to-end digital solutions.

Technology comes of age

Customers can increasingly get what they want, when they want it and how they want it. This rise of mass customization, combined with collapsing product lifecycles, make it clear that in this digital economy, firms must operate at the speed of the Internet to meet their customers’ needs, or risk being left behind. This requires a faster and more-agile supply chain powered by cloud and mobile. Cloud-based apps provide the ability to do real-time updates, and offer faster, cheaper scalability. Increased mobility enables employees and team members to do their jobs anytime, anywhere. And advancements in analytics combined with years of practitioner-domain expertise yield better decision-making.

While cloud-computing, mobile-technologies and data-analytics have all been around for some time, they simply had not matured to a level that allowed for the type of efficient integration necessary to address the growing data explosion from supply chains. But now that these technologies have evolved, the cost has plummeted and the industry is poised for a major digital transformation.

Cloud-computing supply-chain solutions are giving companies the ability to make investments in this type of tool set without all the capital requirements that were required in the past. This allows many companies to get in on the action and start using digital supply-chain tools, making this one of the most exciting times to be a supply-chain professional.

Making better decisions with data

Access to real-time, actionable data helps companies make more intelligent and timely decisions based on real-world conditions, not to mention reducing risk in real-time with SKU-level data that can inform and drive improved performance. The real value comes in the effective application of analytics--predictive, prescriptive, cognitive and complex event-processing--enabling you to do things that simply weren't possible before.

Consider, for example, that you have suppliers who manufacture critical parts for you in an area of the world that is hit by an extreme weather event or an outage from an explosion or a port strike. It is vital to know whose products those suppliers’ parts go into, how many of them you have, how many are en-route, and if/how your customers will be impacted.

With visibility inside the supply-chain ecosystem, you can determine these facts in minutes or hours rather than the days it may have taken in the past.

A 2015 Dimensional Research survey of 315 supply-chain managers revealed that only 70 percent of the respondents had real-time status updates for half of their supply chain. Worse, 82 percent said it would take days to understand the impact of an extreme global weather event. The costs of such blind spots can be staggering.

Early adoption, early returns

Companies today increasingly need end-to-end visibility into every aspect of the supply chain to quickly detect changes, uncover disruptions and recognize opportunities in real-time. Legacy practices are proving to be insufficient to meet the pace of growth and change required. Intelligent, interconnected new tools are needed.

These new digital solutions, along with years of domain expertise, will give rise to ultra-efficient supply chains that deliver superior value to customers. Early adopters of intelligent, digital, supply-chain solutions are already reaping the benefits and pulling away from their competitors.

John Caltabiano is vice president of supply chain with Jabil, an electronic-product-solutions company providing comprehensive electronics design, production and product-management services to global electronics and technology companies. You can reach him at [email protected]