Johannesburg, 01 Nov 2022
The disruption caused by the pandemic and other global issues, including the war in Ukraine and the growing impact of climate change, is putting severe pressure on global supply chains.
In 2020, most companies focused on business continuity to keep their operations running during the early days of the pandemic. In 2021 the focus shifted to building resilience to better prepare for future disruptions.
This year, however, has been all about building predictability in day-to-day business operations to better manage a highly volatile and under-pressure global supply chain.
So severe is the pressure on global supply chains and its ripple effects through the global economy that the New York Federal Reserve Bank launched the Global Supply Chain Pressure Index. The index integrates transportation cost data and manufacturing indicators to provide a gauge of global supply chain conditions.
Technology advances powering supply chains
Companies have not been sleeping at the wheel with building more resilient supply chains. Across industries, companies are leading a transformation of their supply chains using next-generation technologies and powerful analytics capabilities.
According to an IDC report, supply chains had over 50 times more data available to them than five years before. The same report cites the key technology drivers of change in the supply chain as artificial intelligence, blockchain and IOT, all of which utilise and generate vast amounts of data.
What leading companies are striving for is to build 'thinking' supply chains that are connected to disparate internal and external data sources (such as IOT and social media sentiment) and powered by AI-support analytics. A fully realised 'thinking' supply chain offers the prospect of a self-learning, intervention-free system that can provide real-time visibility and greater resilience.
Organisations that develop data strategies that enable supply chain analytics unlock a range of benefits, including reduced costs and improved profit margins, greater accuracy in planning, improved decision-making and a more rounded understanding of the various associated risks in their supply chains.
Three steps toward a smart supply chain data strategy
Achieving this level of intelligence in a supply chain is not always easy. The pace at which technology keeps maturing and the ongoing volatility in the current business environment adds pressure on companies and can make successful implementations hard to accomplish.
However, without a well-functioning supply chain, most businesses will struggle to meet its core objectives and may suffer losses in revenue, customer attrition and market share.
To build a stronger, more resilient supply chain that leverages data to achieve greater transparency and predictability, organisations should seek advances in three key areas, namely:
Rooting data strategies in a focused business strategy
One of the common errors some organisations make is developing data or technology strategies that sit outside the realm of a traditional business strategy. Instead of data strategies directly supporting the achievement of core business objectives, they operate in a silo where their true value is never realised.
To fix this, root all data strategies in a clear business strategy, and ensure direct linkages between how data is used and how that advances the achievement of broader business objectives. This can help drive adoption and improved outcomes across the business.
Aim for agility
The past few years have proven that flat-footed organisations will not survive ongoing disruption and will lack the ability to quickly adapt to new challenges or take advantage of new opportunities. Those unlucky enough to be stuck in large windfall digital transformation projects during the early stages of the pandemic, for example, may have suffered delays and lost opportunities as the transformation project no longer met the demands of their operating environment.
Organisations need to ensure they take an agile approach to digital transformation and data strategies. Through iterative innovation that identifies quick wins and constantly adapts to new or emerging opportunities, companies can ensure their new data-empowered state can deliver the business benefits and growth they seek.
Leveraging a strong partner ecosystem
In a hugely complex operating environment, no one person or company can have all the answers, solutions and best-practice knowledge to effectively overcome challenges and develop new capabilities. Instead, companies should leverage the experience and technical understanding of expert partners that can help guide data and digital transformation projects to successful outcomes.
In the supply chain, this becomes even more important: by tapping into the institutional knowledge of a number of best-of-breed partner organisations, companies can maintain the highest standards of excellence throughout their transformation project.
This helps ensure the capabilities that are built during the project delivers on core goals, for example, bringing greater transparency and predictability to supply chains, as expert partners weigh in with best practice learnings from successful data implementations elsewhere.
Equipped with these new capabilities, companies move closer to the ideal of becoming truly data-driven, with decisions based on accurate, real-time insights that truly move the organisation forward while minimising risk.