In today’s unpredictable climate, embracing new technology and rethinking how we share supply chain data will be key to adapting (and thriving) in the face of challenges. Amidst unprecedented global uncertainty, bold action is the strongest move.
27 January 2023 • 4 min read
As a student at the end of the 1990s, I remember a professor predicting wholly paperless offices with great fanfare. This represented the height of ambition at the time and digitally enabled logistics seemed an unlikely dream. Yet within a few years, as a newly qualified consultant, I was advising customers on digitizing the ‘last mile’ of their fresh consumables supply chain.
This logistics revolution was thanks to new applications of RFID (Radio Frequency Identification) technology. Despite having its roots in the 1940s, the idea of using RFID for supply chain tracking had only recently arrived from the Massachusetts Institute of Technology (MIT). Notably, their excellent RFID work continues over twenty years after this first wave of innovation.
The early systems I worked on were generally successful. Progress eventually became hampered by limits to the amount of data we could effectively process. We were stuck until ERP technology caught up. Thanks to parallel leaps in digitization, however, we didn’t have to wait too long. We were enjoying a second wave of excitement by 2007-2008.
Over the next six or seven years, the Cloud and Internet of Things also came to prominence. Aligning with RFID and ERP systems, they helped e-commerce truly come of age. A third wave of digital supply chain development is perhaps marked by Amazon’s 2017 $13.4 Billion purchase of the Whole Foods supermarket chain. After burning a lot of investment before seeing the right technologies collide, a sophisticated digital supply chain capable of home-delivering fresh fruit became a reality.
To bring this history lesson up to date, however, we need to reflect on today’s uncertainties and discuss a fourth wave. Despite the fact we have just survived a global pandemic and, horrifically, a new war has started in Europe, digitization continues at pace and online retail’s predicted growth trend is still resolutely upward. At the same time, moving components and raw materials around the planet has become more challenging. So, how to respond? The answer is surely to be bold and take advantage of all the benefits modern supply chain technology has to offer. If not now, when?
Whether you are driven by today’s economic, regulatory, sustainability or market pressures, staying still is rarely the right option. Riding the latest wave of supply chain innovation is clearly a question of ‘when’ rather than ‘if’.
Change is inevitable and constant. Whether you are driven by today’s economic, regulatory, sustainability or market pressures, staying still is rarely the right option. Riding the latest wave of supply chain innovation is clearly a question of ‘when’ rather than ‘if’. Your task, as a supply chain leader, is to establish the right time to act. Of course, there’s no easy answer because ultimately every business is unique.
The good news is that robust modeling and forecasting capabilities are at your fingertips as never before. A staggering 2.5 quintillion bytes of new data are currently being generated every day. Some of that total will inevitably contribute to more informed supply chain decision-making. It is your job to find it. Of course, it’s tempting to look solely within your own organization but I fear this will only give you limited insight. Similarly, just talking to your preferred suppliers probably isn’t going far enough either. It pays to look far and wide.
In Germany, we have a term for suppliers who prefer to operate out of the spotlight. ‘Hidden Champions’ are typically unknown to the general public but often supply critical products and services to disrupting industries. Little fanfare and life in the shadows may suit them, but they tend to be the organizations with the most useful insights. There is often reluctance from smaller or family businesses to share too, but as old habits die and management teams become more technically literate, the trend of not sharing core business information is falling away.
To work effectively, data sharing has to be easy, open and transparent.
To work effectively, data sharing has to be easy, open and transparent. The Cloud, of course, makes this more practicable today than at any point in our history. In general, when we discuss supply chain logistics, we’re talking about post-sales and marketing activity too. Nobody ought to feel like they’re losing any competitive edge. The whole enterprise should be approached, in my mind, like the throwing open of organizational doors and letting light in for everyone’s benefit. Thinking about the technologies that can facilitate this open book policy, straightforward and replicable interfaces are vital. Without them, there is a danger of only communicating through your preferred ERP, for example. This will leave potentially valuable contributors out of the game and risks skewering your results.
The task of sharing and learning from each other challenges the very notion of a supply chain. Despite being firmly established in our minds, a strict hierarchy where ‘A’ leads to ‘B’ and ‘C’ follows may not be the most useful way to think of our work. If everyone is interconnected and communicating freely, we move from a chain to a multi-dimensional network. This equality promises a future where tasks and roles can be moved and swapped as required. Is a ship stuck in the Suez Canal? No problem, we can reroute. With the right data-sharing tools in place, we can do it seamlessly too.
Despite being firmly established in our minds, a strict hierarchy where ‘A’ leads to ‘B’ and ‘C’ follows may not be the most useful way to think of our work. If everyone is interconnected and communicating freely, we move from a chain to a multi-dimensional network.
It’s already relatively common to see horizontal data sharing adding value in forward-thinking pharmaceutical and food industry players for example. Just-in-time production and distribution are well-established modes of operation. Here, a full view of a dynamic supply chain and its moving parts brings clear speed and responsiveness benefits.
More traditional logistics models tend to rely on a more vertical view of operations. Clients, contractors and subcontractors typically share data in layers from RFIDs on the ground through the Internet of Things and up to their ERPs. Excitingly, we now have the tools to merge these two worldviews. Imagine where they might take us.
Our industry’s recent history proves predictions are of limited use, so my challenge for you is to find a sweet spot for your business, leap in fearlessly and just get started.
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