March 13, 2023 - by Synoptek
A mature supply chain is a major driver of competitive advantage. This is increasingly being realized by enterprises globally, as confirmed by a Gartner survey. In the survey, 61% of respondents said technology is a source of competitive advantage.
So, how does technology drive the competition forward? Which technologies are enabling next-gen supply chain transformation? What challenges do they help overcome? Let’s find out!
Understanding the Evolving Challenges of Modern Supply Chains
The success of any business today hinges on the efficiency and robustness of the supply chain. But with geopolitical turmoil creating global chaos, companies are facing several supply chain challenges:
Labor constraints
Labor shortage is a massive challenge facing modern supply chains, and there are many reasons for this – from the pandemic to rising inflation, political instability, and more.
The lack of available workers causes production levels to plummet. In some cases, it also causes a complete factory shutdown, resulting in skewed inventory levels. In the long run, this translates into delivery setbacks, cost overruns, and unhappy customers.
Sustainability concerns
In the supply chain industry, sustainability is no longer just a buzzword but a strategic priority. However, curating a supply chain with sustainability in mind is a massive undertaking. Most leaders are found struggling to build a sustainable mindset and balance the economics of social and sustainable responsibility.
The lack of resources, technical and process expertise, and visibility into current carbon emissions make matters worse. Even the absence of a sustainability framework puts green initiatives at stake.
The need for more agility
Modern supply chains are extremely vulnerable to emerging disruptions. As supply chains become increasingly global, the demand for agility is at an all-time high. Congested ports and vacant shelves put immense pressure on organizations to make their supply chains agile and resilient to emerging headwinds. Unfortunately, taking a defensive approach to guard against supply shortages won’t take organizations far.
Driving flexibility
Today’s volatile and disruptive environment requires supply chains to be extremely flexible. But most organizations find it difficult to curate a supply chain strategy that’s resistant to disruption. The inability to adjust production levels, raw material purchases, or transport capacity to changing market conditions affects efficiency levels directly.
5 Technologies Poised to Drive Supply Chain Transformation
In today’s dynamic era, businesses cannot just “react” to supply chain disruptions. Subject to constant fluctuations, they need to be at the forefront of new changes. Battling emerging challenges will require them to embrace the world of digital technologies.
Modern technologies can pave the way for increased automation as well as set the stage for improved human decision-making. Here are 5 supply chain technologies that are streamlining operations, driving transformation, and enabling businesses to achieve a competitive edge:
- Automation and robots: As labor challenges continue to intensify, automation via robots is poised to fill the gap. It is estimated that by 2026, 75% of enterprises will have adopted some form of intralogistics robots in their warehouses. These smart robots will enable specialized forms of cyber-physical robotic automation across warehouse and distribution center environments. By automating complex processes, they will supplement the human workforce and introduce much-needed intelligence and awareness across supply chains.
- Advanced analytics: With modern supply chains generating massive amounts of data, advanced analytics will boost decision-making like never before. The integration of analytics with cognitive technologies will usher in a new era of supply chain optimization. Uncovering hidden patterns via data visualization will help improve forecasting, identify inefficiencies, and respond better to customer needs. Advanced analytics will also help unearth critical insights into sustainability practices and enable the creation of the required policies.
- IoT: As supply chains expand beyond boundaries, IoT enables turning siloed networks into fully connected environments. Through real-time asset tracking, monitoring, and alerts, IoT can help streamline tasks, overcome bottlenecks, and minimize disruption. Connecting vehicles, equipment, and devices with intelligent sensors can offer an end-to-end picture of the supply chain. From the production floor to customers via the warehouse – IoT services can help organizations make timely decisions and keep goods moving efficiently.
- Blockchain: In today’s era of uncertainty, organizations are constantly looking to improve data quality, integrity, and visibility. As global supply chains become increasingly susceptible to attacks and threats, blockchain helps address deep-rooted issues. By bringing much-needed transparency into supply chains, blockchain increases trust between multiple parties and transactions. It also ensures every transaction is validated, recorded, and encrypted, thus strengthening traceability.
- Digital twins: Applying static models to dynamic and ever-evolving supply chains usually falls apart. The coming years will also see digital twins moving from the production floor onto and across modern supply chains. Building a digital replica of the physical supply chain can help create new scenarios and design new routes. Digital twins will also help in stress testing their supply chain design and bounce back quickly after disruptive events.
The Future of Supply Chain Transformation
Globalization, increased product complexity, and emerging customer demands are putting immense strain on already fatigued supply chains. As modern organizations grapple with ongoing disruptions and delays, digital transformation of the supply chain is inevitable.
With an economic downturn around the corner, investing in digital transformation can recession-proof supply chains. Digital technologies like Microsoft Dynamics 365 Finance and Supply Chain can completely redesign global supply chains and enable high levels of productivity and efficiency. They can help overcome labor shortages, unearth more value from data, and improve visibility and transparency. Furthermore, they can make global supply chains more agile and resistant to disruptions.
Supply chains are constantly evolving, but the far-reaching benefits of technology are already being felt throughout. Explore the realm of supply chain transformation today to solve underlying bottlenecks, build resiliency, and seize new opportunities.
