Modern supply chain management: Five tips for success
Jun 07, 2019 Comments (1)
In today’s challenging global trade environment, it’s important to build and maintain a supply chain that meets your business goals.
Between trade tariffs, trade wars, economic uncertainty and political unrest, there are a multitude of factors that can affect the companies you do business with.
Global research firm Gartner identified a number of trends that are pervasive in global supply chains, including artificial intelligence, the Internet of things, advanced analytics, robotic process automation, and blockchain.
“These technologies are those that supply chain leaders simply cannot ignore,” said Christian Titze, research vice president at Gartner. “Within the next five years, if half of large global companies are using some of these technologies in their supply chain operations, it’s safe to say that the technologies will disrupt people, business objectives and IT systems.”
But what does this mean for companies looking to optimise their own supply chain operations? Here are five tips:
Tip 1: Automate and integrate
Dealing with unforeseen circumstances or volatile and dynamic supply chains is about changing formalities, having a flexible customer service, and secure multi-channel distribution and local/direct sourcing. End-to-end transparency, predictive analytics, real time availability of data, and high flexibility in the underlying IT systems are key to success. This relies on a high level of automation, supply chain planning and execution systems, and strong partnerships for areas including stock and warehouse management, transportation or customs.
Tip 2: Prepare for market shifts
Technologies such as additive manufacturing (3D printing) or machine learning technologies will cause existing supply chains to become non-competitive almost overnight. That means companies have to seek local production, multiple channel sales, and sourcing from various suppliers and distributed inventory.
Tip 3: Focus on your customer
In the age of the customer, any successful supply chain focuses on customer needs. It needs to be adaptable and able to change as the customer’s business model changes. Its ability to deliver depends on resilience along the whole supply chain through diverse, trusted and integrated partners.
Tip 4: Deploy technology that matters
Underpinning everything is technology that is critical for driving the automation of transactions, integrating partners, achieving visibility, and improving processes and efficiency. Blockchain for example is going to be exceedingly important because it offers secure and unchangeable data and prevents the abuse of data.
Tip 5: Make good use of data
Supply chain analytics is crucial for success nowadays. This refers to managing data in order to identify and act upon trends and implementing short- and medium-term key performance indicators (KPIs): metrics around service, cost and capital expense, as well as understanding how KPIs need to adjust in line with the wider business strategy.
Businesses need to increase their responsiveness through transparency, work towards greater automation, implement customer centricity, work toward intensified cooperation, and create closer integration of value creation.
It’s important to always ensure your supply chain serves the company’s priorities – be it speed, customer service levels, costs, or anything else. Apart from day-to-day operations and troubleshooting, time should be available for aligning all stakeholders in order to meet latest goals and come up with new innovations to fulfil the business strategy.
IT should be set up in a way that helps deliver the best results. How much effort this requires will vary depending on the level of diversity and legacy in the existing IT landscape. However, without a unified, flexible and best-in-class SCM IT solution with integrated global trade management, supply chains cannot compete in today’s fast changing business environments.
Geoff Taylor is Managing Director of AEB in the UK and has been with the company since 2017. Together with his team, Geoff works closely with manufacturers and traders across industry sectors to understand the impact of market developments on global trade processes and what it takes to build efficient and flexible supply chains in the digital age to ensure future success.