During my 20 year career in logistics, transportation and trade compliance, I have had to become smarter. I have kept up by reading and researching more. Google is my best friend. I do this because my clients and their supply chains are increasingly more sophisticated. A new generation of supply chain executives are looking for solutions to complex challenges brought on by globalization, new technology, limited resources and demand uncertainty. They are looking for smarter solutions to their supply chain.
So, what does a smarter supply chain look like? Here are 4 elements:
Gathering data is a fundamental building block of a smart supply chain. Information is collected in a wide range of ways including machine-generated – flowing out of sensors, RFID tags, meters, actuators, GPS. This data can help measure productivity and waste. The ability to collect data beyond historical data is important in forecasting demand and comes from sources outside of production including sales and marketing. The ability to forecast demand accurately is the most challenging but plays a huge role in having excessive inventory or lost sales from being out of stock.
Visibility of your supply chain is essential to making it more intelligent. More and more companies are relying on ERP (Enterprise Resource Planning) systems to increase productivity. ERP systems integrate data and processes across multiple departments and locations. It allows a company to move product faster, process orders quicker, invoice customers more rapidly and reconcile shipments sooner. Increased visibility requires greater connectivity.
Connectivity of system-to-system integration across the supply chain tears down traditional silos. Different departments including purchasing, accounting, sales, operation, and logistics share a platform to work in unison. Inventory management software makes up a big part of the smarter supply chain. Companies need to make sense of historical data to help make smarter decisions about the future. Extensive connectivity will enable worldwide networks of supply chains to plan and make decisions together. This communication leads to a greater collective intelligence.
Greater intelligence permeates throughout a smart supply chain. Supply chain executives would benefit from the ability to evaluate in real time the impact of inventory and resources to plan for changes in supply and demand. Creating and comparing “what if” scenarios could help plan more effectively ahead of time should such disruptions occur. These “what ifs” can incorporate the use of carriers and third party logistics firm. Rapidly identifying changing consumer attitudes and assess how it could result in increased or decreased demand for your product would improve profitability and ensuring products are available when needed. Automating manual tasks and decisions could increase responsiveness and limit the need for human intervention. Advanced analytics and modeling could have inventory count itself, containers detect their contents or have pallets report in if they end up in the wrong place.
Supply chain executives in a smart supply chain are strategic thinkers and collaborators who optimize complex networks often on a global scale. Service providers can no longer bring a knife to a gun fight. Is your supply chain smart enough?