The rise of e-commerce and the need for real-time customer insights have rendered data an important key to today’s supply chain ecosystem.
The way organizations perceive and manage supply and demand analysis, manufacturing, logistics, and procurement processes has changed significantly in a short time.
With the rise of Industry 4.0 and digital technologies, data is creating a competitive advantage for organizations that is helping to address various challenges in the supply chain industry. The increased and accelerated digitalization of the supply chain is spurred further by business and consumer needs during the COVID-19 pandemic.
Implementing a digital supply chain strategy enables businesses to connect and monitor every point in the supply chain process, which data can be shared freely across functions, and derive insights in seconds to improve decision-making and efficiency.
But, of course, there are challenges, especially in Asia Pacific. DigiconAsia discussed the technology strategies, challenges, benefits and opportunities with Nick Lim, General Manager, APJ, TIBCO:
How is the supply chain ecosystem in Asia Pacific transforming, and what new technologies are being adopted in supply chains?
Lim: If there’s one thing the supply chain industry needs to learn from disruptive events, it is agility and resilience. The supply chain has to be flexible enough to absorb any shocks, major or minor, that come its way. This includes natural disasters, unpredictable demand and, ultimately, an unforeseen pandemic.
In the supply chain ecosystem, for example for high-tech manufacturers, new data solutions are industry necessities. Digital transformation remains the number one priority for manufacturers to stay viable and competitive during unprecedented circumstances like disrupted supply chains and socially distanced factories.
According to recent studies, by 2021, 20% of G2000 manufacturers are predicted to depend on technologies like IoT, blockchain and machine learning to automate large-scale processes.
Players in the supply chain, for example manufacturers, are now using technology to be more data driven. They need to monitor factory equipment remotely, detecting anomalies in complex processes, preventing equipment breakdowns and reacting to supply chain disruptions in real time.
What we see is that the most transformative innovations come from businesses that apply integration, data and analytics technology to all facets of their operations and fully understand the need to break free from legacy attitudes and embrace new business models.
Every step of a product’s journey generates data and every participant generates data. Today we need to have full visibility of it.
With the challenges posed by the COVID-19 pandemic, has the modernization of the supply chain been accelerated, and in what ways?
Lim: As the world comes to terms with the massive changes in the way business is conducted, driven internally by technology and externally by the pandemic, supply chains come into sharper focus.
They are under increasing pressure to meet customer expectations, react to dynamic changes and still deliver on time. Market volatility is now a given with countries reacting to situational public safety and health needs, and this impacts the supply chain as consumers stampede online to purchase their goods and services.
We see a focus on the customer experience. Successful companies see the need to place customers at the center of their strategy and deliver their business model in sync with customer expectations in order to build trust, deliver greater value and develop sustainable loyalty.
There is an increased need for a data-centric approach, connecting for example manufacturers with customers or consumers. And this requires more focus on measuring and tracking customer engagement including such factors as product demands, on time deliveries and recalls. The need to optimize end-to-end customer journeys and improve supply chain resiliency is paramount.
The pressures created by the pandemic have also forced players in the supply chain to respond to events through real-time insights.
What are some key challenges and opportunities in revolutionizing the supply chain?
Lim: The key challenges can be categorized into the different perspectives in the supply chain ecosystem. From a transportation perspective, shipping delays and disruptions due to natural disasters and the pandemic, coupled with the shortage of labor in warehouses due to quarantines and safety measures, are critical issues.
Manufacturers face a huge challenge over the availability of materials or parts due to the pandemic, from sourcing for suppliers and partners to the rising costs of shipping and labor. For retailers, the pandemic has disrupted their business exponentially, requiring a need to transition to an online presence while still ensuring their customers can enjoy the omni-channel experience.
The rise of e-commerce brings another set of challenges. Retailers need to deal with home deliveries, ensure they have sufficient inventory and actualize the personalized customer experience as customers become more digital savvy and demanding.
This presents a great opportunity to use data effectively, applying data analytics as a tool. No matter how you slice it, data is just that – data. In and of itself, data doesn’t necessarily provide decision makers with the kind of insights they need to do their jobs effectively or to take the next best actions based on discoveries about customer trends or other revelations about market conditions.
Advanced technologies, including visual analytics, data science, streaming applications, data virtualization and integration, create in combination a seamless, intelligent supply chain; one that makes full use of all the data generated, simplifies business processes and helps enterprises reduce operating costs and improve operational efficiencies.
Data is creating competitive advantage in supply chains. How should supply chain players in the region leverage data analytics and management to improve service quality and customer experience?
Lim: The key to success in building a digitized supply chain is collecting data at source. Being able to access data from IoT devices, data exchanges, transactional systems and inventory management applications, as well as consumer behavior patterns will inform and enable better insights and models.
Data that is shared and exchanged in real time is invaluable, especially in very dynamic market situations. Real market intelligence, timely data and data analytics helps retailers understand and build better engagement models with their suppliers and distributors.
Here are five ways manufacturers or supply chain players can utilize data to create a more resilient supply chain.
Firstly, they can build an end-to-end data view. They can have visibility of data across all segments of the organization from procurement and inventory management to logistics, operations, finance and customer service. They need to monitor processes, capture all related data, and evaluate this data to understand and anticipate criticalities.
Secondly, data will allow them to identify relevant final-customer demands. Demand for particular products is constantly changing, making accurate estimation hard but important. Analytics can help demand management teams solve the challenge of determining reliable signals. Additionally, direct-to-consumer communication channels, market insights, and internal and external data can provide manufacturers with invaluable information in assessing the current state of demand among their customers’ customers.
The third benefit is the ability of data-driven insights to allow Sales and Operations to optimize production and distribution capacity. These insights help manufacturers and supply chain players by increasing their ability to quickly adjust and optimize production flow and rapidly react to changes in material availability or customer orders.
The fourth point is that data can help integrate systems for vertical connectivity. Connection to the shop floor and systems is key for capturing large amounts of data and converting it into actionable information. For example, TIBCO manufacturing intelligence can enable manufacturing operations to easily integrate their Enterprise Resource Planning or legacy systems using a multitude of industry-specific and technology specific connectors.
Finally, data provides the capability to identify and secure logistics capacity. During disruptive events, understanding current and future logistics capacity is essential. It is increasingly important to prioritize logistics requirements to ensure time-sensitive product delivery. Data analytics also allows real-time visibility of tracking the on-time status of freight in transit as well as monitoring airport or border congestion, allowing an agile logistics management approach to situational or environmental changes.