There is no doubt that supply chains will lead businesses out of the coronavirus pandemic. But, in order to become a leader among the pack, supply chains will need to embrace technologies that allow them to be more agile. Leveraging data analytics will be key as updated supply chains tear down organizations' internal silos.
The visibility into this vast collection of data will allow organizations to make critical decisions such as what suppliers to use as well as what sites, parts, and products may be at risk in any given situation. Furthermore, visibility brings all supply chain partners to the table, in particular, the procurement group, whose activities are typically focused on cost savings – basing purchases on specified parameters and ultimately the lowest cost within those parameters. This approach may be fine in some circumstances, but higher costs will ensue when unexpected goods are needed (such as during a pandemic). As a result, not only will organizations pay more, but they will need to understand the true costs for unexpected items. In addition, just trying to compile all costs into any meaningful analysis is further complicated because of silos. As such, visibility is needed.
In fact, supply chains have become so complex that only machines can do the work of keeping track of all this data. To ease the burden, supply chains need to leverage key technologies.
The complexity of supply chains has resulted in such investments as artificial intelligence (AI), blockchain, transportation management systems, and other online platforms. Such technology solutions are just a part of a proliferation of options due to the growth of software-as-a-service (SaaS). SaaS is a software delivery method that provides access to software by functioning remotely as a web-based service. One of its greatest strengths is that it allows organizations to access business functionality at a cost typically less than paying for licensed applications. Not only are costs typically lower but users can update data, information, and analysis almost in real-time.
Improving real-time capabilities will be among the top needs of many organizations. According to a recent Oxford Economics survey of 1,000 supply chain executives, 49% of survey respondents are able to capture real-time data insights and act on them immediately, while 51% use AI and predictive analytics to capture insights.
Indeed, combined, real-time capabilities, AI, and predictive analytics will be very important for all organizations to utilize particularly as highlighted by the coronavirus pandemic. Supply chains face a multitude of risks and they will continue to face such situations, and whether it’s a labor strike, natural disaster, raw material shortages, economic or political strife, supply chains need to be agile and to have capabilities proactively manage its requirements before, as much as one can, an incident occurs.
The post-Covid19 pandemic era will usher in more collaboration among supply chain partners. Technology will be a tool in aiding this trend. People will still need to interact with each other via video conferencing, utilize collaborative tools such as Slack, Trello, and Asana, and with supply chain technology tools to book, manage, and track shipments and exceptions, required documentation, and payments.
Supply chains were on the technology path well before the coronavirus pandemic. However, the pandemic has opened the eyes of many to supply chain gaps. Post-pandemic will see an acceleration of technology implementation for not only large organizations but also for the small-to-medium size business.Chase Flashman is Co-founder and CEO of ShipSights, a developer of industry-leading supply chain data analytics software & producer of enterprise-level consulting solutions.