There has been a sudden increase in the digitization of the supply chains across industries. As 2021 draws to a close, one can’t help but wonder – Has this change been brought about solely because of the pandemic disruption? Regardless of the motivation, it can be said for sure that – there is much more focus on minimizing supply chain disruptions along with the need to be in a better position to navigate such disruptions in the future.
Let’s look at what happened and how the industry responded to it.
Current market Scenario
When the pandemic hit, industries shrank dramatically. This not only forced suppliers and manufacturers over the world to accept a declining revenue, but also forced supply chain leaders to face a variety of challenges – starting from demand forecasting, shortage or excess of inventory, delay in delivering etc.
Things have changed since – “Covid” doesn’t cause “panic” anymore– thanks to better understanding of the disease and its progression, vaccinations etc. As a result, the industry and overall economy seems to be back on track and many, if not all manufacturing companies are setting up themselves to achieve pre-covid level of operations and numbers. However, according to a recent report, 38% of chief supply chain officers are not confident that their supply chains could withstand a similar disruption, if it were to happen again.
So, what are some of the areas that supply chain leaders need to address?
Challenges faced by supply chain leaders
1. Forecasting Inaccuracy: It is not without a reason that Gartner says – sales and operations planning (S&OP) is the single, most-important, and critical cross-functional process. If S&OP is done properly, it leads to significant returns, including increased revenue and profitability. Unexpected demand fluctuation created by the pandemic has forced industries to invest more time and effort to improve their forecasting accuracy.
2. Delayed Response: As any manufacturer knows, it is not enough to have the right product at the right place – it is equally important to have it at the right time. Excess inventories or stock-outs are not what anyone wants to have!
3. Data – availability and visibility: Today, thanks to more modern machines and digitization, industries are generating exabytes of data every day. It is important for organizations to not only collect this data but also provide access to this vast amount of data to the appropriate stakeholders at the right time.
4. Cyber Security: Finally as with any enterprise function, Cyber Security is paramount and there is a strong need to protect the supply chain from significant cybersecurity risks like data theft, industrial espionage, and attack by hackers.
So how is digitizing helping and what are some of the technologies being used to address the above challenges?
Technologies being used in the Digitization of Supply Chain
i. Blockchain: It provides real-time tracking and end-to-end traceability for the global supply chain process. Integrating this emerging technology with supply chain process will not only increase transparency and improve efficiency but also will help to reduce the turnaround time. In addition to this, by the very nature of this technology, security is inbuilt as well. Blockchain thus addresses the forecasting, timeliness and data availability needs of manufacturers.
ii. Robotic Process Automation (RPA): RPA is used in optimizing the processes that involve routine and repetitive work, it offers significant benefits by automating processes such as Order Processing, Partner Onboarding, Shipment Tracking, Invoicing, Procurement, Inventory Management, Demand Planning and even Customer Services. So, by reducing error rates and delays in processing of routine transactions, RPA enables manufacturers to reduce costs in all areas of operations including supply chain.
iii. Data Analytics: Data analytics in supply chain is a step towards smart manufacturing helping the supply chain leaders be more data driven rather than relying on “gut feeling”. Data analytics is crucial to the success of an organization because it helps align scarce resources – money, time, people – flexibly and quickly adapting customer demands.
Infosys Solution- Supply Chain Control Tower:
Infosys Supply Chain Control Tower (SCCT) is an analytical and predictive platform that provides end to end visibility to business KPI’s in real time through a single view dashboard. It works by integrating key areas of supply chain such as supply chain planning, order management, transportation, and inventory management which are interdependent.
The Infosys Supply Chain Control leads to better visibility and predictability across the supply chain. It also helps in drawing actionable insights for the future. Hence organizations can realize 20-30% improvement in execution productivity and 15-20% reduction in operating cash flows.
As manufacturing companies gear up to achieve their goals for the coming years, the efficiency of supply chain operations will have a big say in determining the success through this period. Although, the supply chain processes are evolving, and SCM has become increasingly important; keeping up with the latest advancements in this area gives businesses an edge to stay ahead and optimize their supply chains so that the processes can run smoothly over future.
By accelerating innovation and pace of technology adoption across chain, businesses are better equipped to weather through any unforeseen disruptions with comparable ease. This is due to better flexibility and visibility across SC network. Considering the recent past, and volatile nature of trade environment, it’s no surprise that most businesses are in the process of modernizing their Supply Chain with Infosys as a trusted Partner.