How to use technology to cope with the Supply Chain slowdownCigniti Technologies
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Thomas Friedman once said, “Supply chains cannot tolerate even 24 hours of disruption. So if you lose your place in the supply chain because of wild behavior, you could lose a lot. It would be like pouring cement down one of your oil wells.” There is no doubt that supply chain & logistics are one of the most essential fuels to the survival of any organization or country. An unobstructed supply chain ascertains that everything reaches where it is required & when it is required. Any disruption in the process may severely impact the capabilities of the end users. Even before the COVID-19 pandemic shaped up, the supply chain & logistics sector was dealing with a lot of uncertainties due to the ongoing US-China trade war, Brexit, and economic slowdown. The outbreak has accelerated whatever would be the results of these factors.
Over the past 18 years, China’s trade share has more than doubled in the global economic ecosystem. It represents 16% of the world GDP and is a supply hub for a majority of the organizations. When the outbreak initially came into light in Wuhan, several companies halted production lines, factories were shut down, as the entire city came into a standstill. Automobile manufacturers such as Fiat & Hyundai announced temporary closures of production at their factories due to the disruptions in the supply chain caused by the outbreak in China.
The supply chain industry is always the most vulnerable to force majeure. The COVID-19 outbreak revealed major weaknesses in the global supply chains. Given the criticality of a well-functioning supply chain, it is imperative that organizations focus on building resilience against such unavoidable crisis and developing stronger sourcing strategies. Companies should stop relying on a single source and try to bring in flexibility, which may come to rescue in events like these. In such unprecedented events, those companies who have resilience against change, agility to respond, and the ability to continue their business emerge stronger on the other end. Let us discuss how technology can play a major part in this transformational process.
Predicting the unpredictable
The COVID-19 outbreak is unprecedented, certainly. However it is not that the supply chains haven’t faced such disruptions before. Taking lessons from such events, General Motors have extensively mapped their supply chains to understand their suppliers, global sites, subcontractors, source of origin of the parts as well as the route. Such a sort of detailed mapping enables GM to determine the impact of any possible disruption on their supply chain could be impacted in the coming days, weeks, & months.
Having a prior knowledge of the source of disruption & the impact of disruption, companies can have an upper hand in terms of lead time to exercise mitigation strategies such as stocking up inventory, arranging substitute supply sources, and so on. With the advancements in digital solutions and popularity of automation, the costs of mapping and monitoring have reduced considerably over the last ten years. Building an autonomous supply chain can help decrease the reliance on inventory, human resources, & manual processes while fostering agility, flexibility, and speed. Industry 4.0, smart manufacturing, and autonomous delivery vehicles – all these digital solutions may still be at a rather nascent stage, however they have the potential to improve the efficiency & decrease the overall costs of supply chain management.
Digital acceptance to build resilience
By deploying necessary digital solutions, business leaders can not only improve productivity but also imbibe autonomy in their supply chain for identifying, forecasting, and fixing a problem.
The world’s largest dedicated online grocery retailer is using advanced autonomous supply chain processes based on machine learning to forecast & predict the outbound demand for more than 50,000 different products. James Gralton, Engineering director of logistics & supply chain at the company says, “We currently generate over 20 million forecasts each day. This helps us to react rapidly to a multitude of common and exceptional supply issues.”
A cognitive supply chain
A cognitive supply chain, built with a combination of technologies such as Artificial Intelligence, Machine Learning, Digital Twins, Smart contracts, Blockchain, & Cloud Computing, can be resistant to the changes in the global economic landscape. As edge computing & 5G technologies are gaining momentum, remote monitoring & real-time decision making without latency is becoming feasible.
A smart, autonomous supply chain has the ability to identify patterns in demand that a naked eye would miss, thus resulting in better & more accurate business decisions. Phil Skipper, Head of business development at Vodafone Business, says, “There’s an increasing demand for less plastic and preservatives to enter the supply chain, which ultimately causes challenges when it comes to making sure goods are delivered in a good state. This is where automation can have a big impact, helping ensure goods move through the chain to reach their destination efficiently and in top condition. For example, the internet of things can be used to measure factors like the temperature and humidity of perishable goods, allowing businesses handling them to quickly step in if there is a risk to the condition of the items.”
The possibility of end-to-end autonomy
The technology required for making the supply chain autonomous is available; the delay is only in its harnessing by the global organizations. Although the deployment of digital transformation solutions is still in the early stages in the supply chain industry, it has the potential to transform the industry by making it more susceptible to uncertainties. Ian Stone, Chief Executive at management consultants Vuealta suggests, “Whether you keep monolithic supply chains or split into nimbler sub-sets, the key to agility and tackling complexity is to be able to have real-time visibility of what is happening on the ground at a local level. No matter how big it is, if your supply chain is not connected, you can’t keep pace today. As a business’s third and fourth-party supplier network expands, it can be easy for one supplier fail to trigger a domino effect. With new risk types emerging, organizations need to be better prepared and utilize technology to ensure a robust and healthy supply chain.”
Cigniti’s QA & Test Automation experts have in-depth experience in testing supply chain management (SCM) apps end-to-end for performance and process optimization, for scalability, and for ensuring seamless integrations with enterprise resource planning (ERP), warehouse management system (WMS), transport management services, billing & cost management, and more.
Cigniti leverages its experience of having tested large scale data warehousing and business intelligence applications to offer a host of Big Data testing services and solutions such as BI application Usability Testing. Our extensive experience in the use of AI, ML, & analytics helps enterprises improve their automation frameworks & QA practices. We incorporate AI/ML elements within your existing overall QA framework through implementation of IP. Schedule a discussion with our experts to learn how we can help you build resilience in your supply chain.