Supply Chain Ecosystems are the key in addressing disruptive times
Customer expectation towards an ever increasing level of convenience is dramatically changing, challenging any Supply Chain and Operations status quo head on. Product Supply Chains are facing major internal and external disruptions, with COVID-19 being on top of the list; for now. Digital technologies and enablement are questioning every aspect of existing business models. In order to succeed in this constantly evolving and landscape, organizations will have to transform slow moving, siloed and reactive linear Supply Chains into autonomous Supply Chain ecosystems, that are interconnected and highly adaptive.
Customers today want maximum convenience across different channels, while demanding high levels of personalized products and service levels, adding additional complexity to the mix. Visibility on order/return status and delivery is a given, but near-instant order fulfillment within a few hours challenges the entire end-to-end setup. On top of that, transparency and full disclosure of product and supply chain sustainability, perhaps a circular approach, are becoming of increasing interest with a well informed and cautious consumer.
What’s Next
Tomorrow’s Supply Chains will be interconnected and self-orchestrated ecosystems. Next-level Supply Chains will be digitally connected end-to-end. All relevant internal functions will be connected using one common data warehouse, from R&D and procurement through sourcing, manufacturing, fulfilment and logistics. In addition, all external Supply Chain partners, such as suppliers (including tier 1, tier 2 and even beyond), logistics service providers, customers and innovation partners will also be integrated within the Supply Chain for maximum visibility and connectivity. Unless all members of this ecosystem have access and visibility to uniform information on the demand and supply side, they cannot mount a joint and appropriate effort required, to provide a product or service that fully meets the expectations.
Rather than a linear chain, where data and input is transferred from one stage (or silo) to the next, data needs to be available continuously throughout the entire Supply ecosystem, giving all partners near-real-time and simultaneous access to relevant information and enabling optimised and informed decision-making.
Transparency across this ecosystem allows for synchronised demand and supply planning, as well as connected and transparent logistics. Organizations will take advantage of Artificial Intelligence (AI) to make key activities self-orchestrating by defining optimisation parameters and embedding these in the algorithms which steer decision-making. Optimised choices — for example, which supplier to use for individual orders at the best manufacturing location, or which transport mode and logistics service provider to use — will be made autonomously, in near-real-time and across all functions. This also helps companies to proactively identify and mitigate Supply Chain risks. And as one size won’t fit all anymore, organizations will use dynamic Supply Chain segmentation to be more customer-centric across multiple channels and optimize their cost-to-serve at the same time.
Reaping the Benefits
Investments into interconnected Supply Chain ecosystems contribute to operational savings in Supply Chain costs, more importantly though, they’re enhancing customer satisfaction through greater levels of on-time in-full (OTIF) delivery, while bolstering adaptability towards disruption.
The advantages go far beyond just the numbers. In addition to enjoying higher profitability and better asset utilisation, they’re also using Supply Chain to drive improvements across the entire business, leading to more effective risk management, as well as advanced Supply Chain capabilities.
COVID-19 has been a catalyst for organizations to revisit their Supply Chain strategies and accelerated the adoption of Supply Chain models and digitally enabled capabilities, driving end-to-end real time visibility in order to contribute towards its agility, resilience and cost effectiveness in times of increasing uncertainty.
