While supply chain management has typically focused on lowering costs, today’s trends are about business growth through digital transformation. Replacing the manual data gathering and cadence-based periodical strategy of the past is the current need for real-time information that keeps strategies on track and capable of responding to evolving circumstances. With today’s treatment of data, the supply chain has never been better fit to suit evolving customer needs.
The fully monitored supply chain prompts the idea of the supply chain control room. The purpose of this situation room is to provide for optimal data access and collaboration for all key supply chain components, including vendor status, inventory quantities and subcontractor and logistics provider information. It is meant to provide a digital mirror of the entire chain in order to enable quick, holistic decisions and to execute on them from within a closed loop.
With complete visibility, companies are not only able to sharpen their core logistical adaptive capacity but can also go beyond to model and execute new business models, innovate in process, mitigate risk, and more — ultimately in service of the customer. The more an illuminated supply chain offers continuous planning agility, the more customer-centric the company becomes.
With a ballooning scope of available data, automated solutions are required to augment human capabilities. Today’s options employ advanced algorithms that can process this information and discern patterns from which decisions can be made, and at a speed that can reduce costs, improve service and shorten the decision-making timeline.
To accommodate the needs of the business, numerous forms of critical analytics are employed: descriptive analytics tells the story of what happened using key dashboards and reports; diagnostic analytics runs scenarios for the deeper explanatory layer behind the story; predictive analytics anticipates the story to come based on the past; and prescriptive analytics completes the most up-to-date information picture toward action. Finally, this iterative process sits within the broader epic, where cognitive analytics can, through artificial intelligence and machine learning, develop new insights and respond in an automated fashion.
Support of this ecosystem of actionable data comes through analysis with internet of things devices, sensors and platforms, leading to the emergence of Industry 4.0.
The digitizing of the supply chain is well beyond technology for technology’s sake. The logistical heart of the business evolves, maximally leveraging information to accelerate and improve operations. These advantages will be even more important in 2019, when we can expect to see the current trade wars create huge uncertainty. Supply chains must become ever more agile and connected so that businesses can quickly sense and respond to changes in demand and supply.
PJ Jakovljevic is a principal analyst at Technology Evaluation Centers.
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