Supply chain technology falls into two distinct categories: Technology for fulfilling the physical supply of goods and services, and supply chain technology to support the management of the supply chain, making it work more smoothly and ensuring it is less vulnerable to shocks.
There is some overlap between these two areas, but this article focuses on the second of these categories.
The supply chain crisis of 2022 was a wake-up call. Organizations began to understand a lesson that OCI had been trying to express for some time. The supply chain ecosystem is delicate and vulnerable, and certain practices must be implemented, or we risk catastrophe. Organizations must audit their supply chain, understand its frailties, and carry out extensive due diligence not only on suppliers but suppliers to suppliers and all the way through the supply chain. Digital transformation is vital in effectively managing this supply chain audit.
Organizations also need to take a holistic view of the supply chain. For example, the individual suppliers that make up the supply chain might be solid and reliable, but there might be too much dependence on any one region or product type when substitute products are available.
The first step in creating an effective supply chain audit is data collection. Technology is vital in producing this detailed understanding of the supply chain, updated with appropriate frequency, supporting management in taking suitable action. Or to be more precise, technology is vital in collecting data, updating dating and providing analysis.
This article focuses on four specific technologies which can provide, collect and report on supply chain data, updated frequently and which can help ensure the supply chain is less fragile and vulnerable to disruption.
Sourcing the data
First of all, where does the data come from? The data sources can come in many forms, including market data, from news wires, news from the internet, social media, and also from the physical transportation of goods. The Internet of Things, supported by 5G technology and edge computing and with GPS, can not only track the transportation of finished goods but can be applied across the supply chain. It can support gathering data on components and raw materials that are vital in developing a finished product right through to delivery to the customer.
The Internet of Things can provide sources for data, as can news and other information from across the internet, but how can it be recorded? Previously, this would have been a task for humans, keying in information, but this was tedious and error-prone.
Robotics process automation (RPA) is an interesting technology for collecting this data. RPA can be programmed to simulate repeatable human tasks, scrape data from various previously defined sources, and gather it, cutting out dull, repetitive tasks subject to human mistakes. RPA can act as a digital worker, gathering data on a supply chain, including of conditions that may disrupt it, such as weather, earthquakes, and political or financial conditions, such as stock market changes, interest rate changes, and regulatory changes. RPA can be programmed to
gather this data as frequently as desired. RPA can also help eliminate errors in the keying in of data.
Reporting and analytics
ChatGPT from OpenAI has introduced the wider public to the potential for AI to provide reports from data. AI tools will soon be programmed to produce regular reports advising on any changes or potential changes that may impact the supply chain and support management in reacting more rapidly to changes before they can significantly impact the supply chain. AI tools can also help support analytics tools, enabling supply chain managers to spot emerging frailties or risks. Armed with this information, organizations can rapidly react to changes and take action to mitigate negative consequences.
Data you can trust
Finally, blockchain, in conjunction with the cloud, will provide an immutable ledger on a product’s journey through the supply chain, with updates to the blockchain at every stage of the journey, from mining raw materials to finished product manufacturing to delivery to the end customer. A peer-to-peer network such as blockchain can eliminate the need for central authorities, reducing the risk of corruption. Blockchain can also provide smart contracts as an alternative to letters of credit, supporting the automatic transfer of funds upon completing certain pre-agreed milestones.
By applying technology in the ways described here, organizations can better understand their supply chain, its weaknesses and danger points in an ever-changing world. The crises of the last few years have demonstrated the importance of such detailed understanding. With technology as an aid, organizations can help ensure the supply chain is more resilient and less vulnerable to shocks in the future.