April 14, 2017
Given all the attention to the supply chain over the past two decades, one might think all available efficiencies have already been found. But in the digital world, anything that looks like it’s just about to settle into a mature and sensible set of business processes usually means disruption is just round the corner. The current disruptor: speeding service to customers.
New technologies are necessary to accommodate the transformative shift to a customer-centric supply chain. Cloud computing and connected smart devices are both being used to speed connectivity and improve visibility and responsiveness to fast-changing market demands.
Cloud-based technologies allow manufacturers — along with their customers, suppliers, third-party logistics partners and even banking institutions — to participate in the total value chain, fusing the physical and digital elements of one, end-to-end process. This entire process can be more accurately described as a supply network.
In a supply network of this design, upstream orders and any changes to demand or supply commitments are instantly visible to assigned stakeholders. Permissions and access are usually controlled by the channel masters who establish the network. Just as with Facebook, where contact details are held once and once only in the cloud so that all participants linked to that contact can see changes instantly, then so it is in a cloud supply network — with orders, inventory, and proof of delivery all held once and once only and instantly visible to others.
This desire for visibility and speed of information flow across a supply network is not new. It has been the holy grail for supply chain practitioners for years. What’s new is the availability of a confluence of low-cost, widely available technologies to make it possible, in just the same way that the prevalence of mobile phones made it possible for Uber to reimagine the public transport industry.
“Supply-chain-in-the-cloud” offers huge benefits of visibility and speed of response, but it’s not enough to completely transform supply chain thinking. For that, you need to add in smart devices and the ubiquitous Internet of Things.
Low-cost sensor devices attached to products, in combination with cloud-supply networks, allow companies to have real-time, continuously updated visibility of goods along the critical paths of their supply network. Knowing where a product is and when it will land at its destination, for example, allows for in-flight re-scheduling of onward freight forwarding, so customer expectations may still be met or, at the very least, communicated with confidence.
Add further intelligence to the devices to check for temperature variations, excessive vibration, humidity – and now you can answer not only “Where is my stuff?” but also “How well is my stuff being looked after?” This simplifies a lot of quality control disputes between dispatch and receipt when you can take readings from the device on conditions throughout its journey.
These are just a few examples of ways new technology can help improve speed and responsiveness. Ultimately, there are many benefits, but the improved ability to meet customer expectations is always at the center of any successful transformation.