With the massive swings in global demand seen as we emerge from Covid restrictions, we look at the technology that can overcome inefficiencies across supply chain management and address some of today’s supply chain challenges.
The need for effective supply chain planning has catalysed due to recent shortages across all sectors, with big players such as Amazon prompting shoppers to purchase Christmas gifts as much as ‘four weeks early’, McDonalds recently running out of their infamous milkshakes and Audi halting production due to semiconductor shortage.
The post-pandemic demand has rocketed, leading to chaos for manufactures and distributors of goods who are unable to produce or supply pre-pandemic volumes due to raw material and labour shortages. It is understood that delays and disruption in our global supply chains is expected to linger until at least spring of next year, highlighting a huge ongoing struggle across the industry.
Before COVID-19 became a household name, the idea of a virus causing huge global damage across our economy would have been something off a script – however driven by the constant media coverage and uproar, it’s hard not to notice the damage it has caused – but why?
A couple of reasons, but lack of visibility is at the core of this problem, with bottlenecks occurring in sectors that aren’t equipped for the ebb and flow of demand and production created by the pandemic and changing consumer behaviours.
Lockdown across the world promoted (almost) complete shutdown of industries, resulting in lower consumer demand and industrial activity. As lockdowns have gradually lifted, there has been an unprecedented rebound, and supply chains are struggling to bounce back.
Despite many companies using enterprise resourcing planning (ERP) software’s to manage their operations, these technologies are often limited and incapable of reacting quickly to large shifts and providing rapid connectivity for end-to-end visibility. The lack of efficiency within ERP systems to solve problems comes at an additional cost on your organisation, in the form of increased inventory requirements, storage fees, and importantly loss of revenue, eventually impacting the consumer.
In a post-pandemic world, higher costs to consumers are unfavourable, and coupled with increased freight rates due to staff shortages adds further burden.
To support in overcoming inefficiencies across supply chain management, companies need to invest in network-based supply chain software’s that integrate data across all trading partners in real-time, into a single, consolidated ecosystem accessible by all parties involved. Integrating AI and machine learning will be vital to address today’s challenges and technology providers need to do so to remain competitive.
The use of disruptive technology enables powerful and predictive analytics, allowing better decision making to foster resilience and reliability across the supply chain. Current AI adoption is low as focus is shifted towards sustainable practices – but there is a gap – if AI is leveraged appropriately, will this not result in a more sustainable supply chain? Yes – but a delicate balance which should be explored further. Gartner reports only 50% of supply chain organisations would have invested into AI by 2024 so there is a long way to go before we see the real impact.
Please contact Mark Boswell, Head of Food & Beverage Practice at 4C Associates at firstname.lastname@example.org or Gopal Iyer, Head of Supply Chain Practice at 4C Associates at email@example.com if you would like to understand more about the use of technology to improve your supply chains resilience.