Supply chain management must take recourse to advanced technologies if it needs to keep customers satisfied.
by Team MT
Supply chain is a word that is often talked about frequently. But few understand its management. In manufacturing, it comprises one of the most critical functions. While an efficient supply chain can catapult a company to new heights, an inefficient one can do the exact opposite. Examples of efficient supply chains are the reasons why e-tailers like Amazon and Flipkart are so successful. They first got the supply chain right before servicing clients.
Today, there are plenty of software available for a smooth supply chain. Right from procurement orders to final delivery, the software enables the manufacturer to track every path of the goods. Emergence of new models of business are also seeing exponential growth.
RFID and WMS help in maintaining inventory.
Bhanwar Lal Bishnoi, head, embedded design & development centre, L&T Electrical & Automation, says, “Technology today offers autonomous robots, RFID, software analytics, and many more. If one were to deploy these smartly, rest assured one can solve a lot of their problems.”
For example, it’s possible for a manufacturer to anticipate demand through historic data. This may be seasonal, or more ad hoc – based on predicted weather conditions, for instance. With the right systems in place, it’s possible to identify if you have sufficient inventory to meet the expected rise in demands. And if not, systems could automatically start adjusting orders with suppliers to source the raw materials necessary to fulfil anticipated future demand.
Radio Frequency Identification (RFID) chips, barcodes and scanners are vital pieces of equipment that can provide innumerable benefits to business. For example, RFID chips or barcodes can be placed on every product, which gives your company a way to easily track inventory. Paired with RFID technology, cloud-based computerised shipping and tracking further simplifies the supply process and can dramatically reduce shipping errors.
Getting products from A to B is a complicated process though. There can be multiple partners involved at each stage, they may be spread across different countries, and unexpected global events can throw logistics into turmoil at any time. While there may be multiple pieces in the supply chain puzzle, one goal will always remain for businesses: getting goods to customers quickly, ethically and on-time. Customer expectations aren’t going to diminish in this respect, they’re only going to grow stronger.
Supply chain management technologies make it easy to greatly reduce the time spent shipping, receiving, tracking, and compiling order data. This can save companies both time and money.
A key consideration for any supply chain manager is how they can maintain visibility of all goods and materials, wherever they might be located, at any time. With such huge networks, it can be a real challenge to keep track of all aspects of your operations. Data is vital to maintaining control, therefore, providing the ability to respond quickly to problems. Thanks to IoT, connected devices provide a source of data which we’ve never previously been able to tap into. Information can be shared from devices in real-time, so it remains accurate and paints a true picture of the current situation.
Explaining how digitalisation has pervaded everywhere, Nishesh Gupta, VP, SCM, NITCO, says, “Today, companies have no choice but to go digital. Moreover, the consumers themselves are digitally enabled. If one looks at the 84% penetration of smart phones in the country, then consumers are highly aware and knowledgeable people. Moreover, the time to service as an element has reduced to hours from the weeks and days of yore. Supply chain management is nothing but finding out ways to quickly provide products from factory to shelf at the lowest cost.”
With digitisation, consumers can search for products. Using AR and VR, they can even feel the products. The rapidly changing consumer profile means businesses will have to adopt technology.
Amit Chouhan, head supply chain, construction chemicals, BASF India, says, “At our parent company in Germany, Industry 4.0 has completely taken over. With more than 200 facilities and goods moving from one facility to another, there is little cause to worry about issues like safety and quality. That is because there is little human element and everything is mostly autonomous. Predictive maintenance is prompt and all data is looked at closely and regularly which helps in scheduling.”
With analytics to provide a big picture, organisations can also ensure they are not left with an abundance of stock in their warehouse.
Unfortunately, technology is a moving target. It is constantly evolving and improving so that today’s technology is outdated within a few years or months. Rather than focusing on a specific software system, business and management should focus on three aspects: fundamental concepts, core systems, and data analysis. Manufacturers and logisticians are introducing new technologies into their manufacturing lines and logistics operations. They are leveraging on established digital ecosystems and finding new ways of doing business regardless of their size and capital on order to stay relevant in a hypercompetitive market going after a phenomenon called Uberisation. They are adopting digital capabilities to create business value and climb on the top of the ladder.
Technologies such as cloud, mobile, Big Data and analytics, and the Internet of Things (IoT) will rule the manufacturing and logistics industries for many more years to come. In addition, they are keen to adopt upcoming technologies to improve their manufacturing lines, business processes and logistics operation, says Chouhan.
Artificial Intelligence has the potential to transform supply chain methods. Logisticians can employ to improve, and even automatise, decision making, envision finer business processes and ecosystems, and revise the customer experience, which could make other technologies look obsolete. AI, as a technology, is still in its early phase of development. The current AI solutions although can identify patterns and envisage future scenarios, they don’t have decision-making capabilities. Uniting pattern identification skills with cutting-edge prescriptive capabilities will, thus, be crucial to extensive supply chain uptake, empowering users to devote their skills to higher-order use cases such as tactical network plan or bulk planning.
Technologies such as cloud, mobile, Big Data and analytics, and the Internet of Things will rule the manufacturing.
Taking data use one step further, the same technologies can anticipate future behaviour and enable businesses to be proactive. By enabling machine learning capabilities and predictive analytics, businesses can ensure they meet demand as well as minimise costs, says Gupta.
In all this, one must not forget that ultimately goods have to be delivered to the customer on time, every time. With analytics to provide a big picture, organisations can also ensure they are not left with an abundance of stock in their warehouse if demand is expected to dry up. This can prevent a surplus of inventory and prove to be a vital cost saving measure in the long-term. Whether you decide to implement one or all of these technologies, organisations will need to consider how they will manage and optimise their investments.
Without such a platform, most organisations will need to reallocate considerable resources in order to integrate multiple vendors and technologies. Either way, organisations will still need to form a strategic partnership with a digital specialist, that can also advise on how processes and working practices will change. They will be able to provide expert insight and help to grow business use capabilities – so that tech won’t just be solving your existing challenges, but will continue to do so for many years to come.