For most of 2020, any news regarding the supply chain has been bad news. Even setting aside the COVID-19 pandemic, other stories that have dominated the news cycle, including the China-U.S. trade war and Brexit, have disrupted the way the world does business.
But it’s the pandemic that has left many industries reeling. The big difference is the fact that organizations were forced to react to something for which they had no plan. In an effort to prevent that from happening again – and to help them recover from the setback of the pandemic – organizations that rely on the supply chain are turning to technology.
Flexibility and scalability are key
For many companies, the pandemic reinforced what they may have already known, but hadn’t yet put into practice: the more flexible and scalable your organization, the greater your chances of success, not just in times of crisis but in general.
The shutdown of schools, restaurants, and office buildings brought this to light for many suppliers – those that could shift between commercial and retail were not nearly as affected by lockdowns as the ones that couldn’t. The stories of farmers being forced to dump milk or potatoes are the result of inflexibility by their buyers – when demand shifted, they were unable to adjust.
To combat this situation, many organizations have begun mapping their entire supply chain to identify potential problems and to ensure communication throughout the chain. Some are doing this by creating a digital twin, in which they create a virtual replica of their supply chain so they can use artificial intelligence and data analytics to play out different scenarios and figure out what works best for the organization.
The idea of using data analytics to maximize the potential of the supply chain is not a new idea. What is new is how some companies are using certain technologies to their advantage. One example is graph analytics, which can help users find relationships and connections in the data that would be too complicated for other analytics solutions.
The car company Jaguar Land Rover, like many other companies, found that its data was flawed and unusable after business was affected by the pandemic. It uses this data to make forecasts, like setting a minimum purchasing volume for car parts. The company used graph analytics to dig into its data in a more complex way to figure out what it could build right away with the parts it already had, and it ended up avoiding millions of dollars in charges from suppliers for failing to meet minimum buy volume requirements.
Technology for transportation companies
The transportation industry is a major cog in the supply chain, and companies within that industry are always looking at ways technology can help them provide the best service while maximizing their earning potential. When the transportation industry is at its best, customers have a wide variety of choices at competitive prices, while carriers are able to offer optimum performance at low cost.
Organizations in the shipping industry use analytics solutions that automate load booking and streamline workflow, offering real-time visibility into available capacity and predictive freight-matching. GPS, which plays a role in supply chain mapping when organizations calculate distance between destinations, also can be used in shipping to provide shipment status.
Organizations that rely on the supply chain always take risk management into account. Manufacturing abroad may come cheaper, but there are more steps along the chain before the product reaches its end destination. Just-in-time manufacturing models might have cost advantages over keeping inventory in warehouses, but when production comes to a screeching halt, low inventory could be more harmful. The emergence of new technology that can help organizations assess these cost trade-offs will continue to shape the supply chain through the pandemic and beyond.