60%
of respondents agree that redundancy and resilience in their company’s supply chain are more important than speed and efficiency (32% strongly agree).
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The events that occurred in 2021, and the beginning of 2022, wreaked havoc on corporate planning. While the pandemic, inflation and the Russian invasion of Ukraine have taken center stage, we are also seeing increases in trade tensions, commercial shifts, port blockades, and other supply chain gaps. Many supply networks have been disrupted or fractured, causing business executives to speculate on what the new normal may entail for their organizations.
Notably, companies are considering the trade-offs between resilience and efficiency that many businesses face when they re-prioritize their resources for the future. Shifts in strategy are becoming more frequent and a new roadmap is needed to incorporate the increasing frequency of changes, with supply chain resilience taking a larger role.
Supply chain disruption is far from over; in fact, many businesses already recognize that a new approach is required to handle the inevitability of disruption. This has far-reaching ramifications for company executives’ decisions on technology investments, network localization initiatives, and supply chain partners.
In response to growing upheaval, businesses are trading efficiency for greater resilience. For example, companies may prioritize more expensive suppliers in less risky markets to balance their supply chains. Firms are striving to reduce these costs by investing in technology, streamlining and regionalizing supply chains, and, in certain cases, simplifying product design to make components easier to acquire.
of respondents agree that redundancy and resilience in their company’s supply chain are more important than speed and efficiency (32% strongly agree).
Operational costs have risen as firms have sought to recruit new suppliers to fill gaps, while they are spending more on technology to improve supplier visibility. According to GEP’s “The Business Costs of Supply Chain Disruption” report, one-third of organizations claim their supply chain expenses have increased, making this the most common effect of supply chain disruptions.
Firms that have not made similar investments in technology, on the other hand, have ended up spending even more.
Greater localization, shorter supply chains, and increased supply chain visibility assist enterprises in their capacity to monitor and reduce their operational costs, as well as generate more robust supply systems that can withstand future shocks.
According to the previously mentioned GEP research, more than 50% of CEOs believe their companies will need to make significant changes to their supply-chain operations in the coming years.
Firms are increasingly prioritizing resilience above efficiency — and discovering novel methods to do both simultaneously.
Until now, businesses have prioritized supply chain efficiency. However, this is changing as businesses recognize the need for supply-chain resilience. The GXI Vol.5 survey has a few interesting insights:
These statistics make it clear that businesses are aware of the need to improve their supply-chain resilience and many are actively evaluating new approaches. For example, just under a third are considering making their supply chains more local. But diversifying suppliers is just one way to improve resilience. The key to long-term risk mitigation and proactive management of supply chain exceptions is access to granular, timely, and structured data. The road to successful data management, in turn, starts with digitalization.
The digitalization of supply chain networks enables businesses to better manage the efficiency vs. resilience trade-off. Cloud, big data, artificial intelligence (AI), and blockchain-based technologies enable businesses to monitor their suppliers more rapidly and in greater detail, and are proving critical for anticipating and managing disruption.
Access to all processes and goods involved in a global supply chain is one aspect of supply chain visibility. It enables businesses to track, measure, and control all of their items at any point along the supply chain journey. This visibility allows businesses to also consolidate supply chain data and anticipate spending, uncover operations gaps, decrease expenses, and boost efficiency from a single location. The resulting increase in efficiency also enables improved industry collaboration and better customer service results.
Finally, supply chain visibility extends beyond the concept of transparency. It gives businesses a centralized view of inbound, outgoing, and third-party shipments across all carriers and modalities, for any worldwide location, regardless of where those shipments emerged or are booked. Achieving this level of global exposure is difficult; and most organizations struggle to make their supply networks more open. That is because establishing end-to-end supply chain visibility requires a strong supply chain data infrastructure that makes data consolidation and harmonization possible.
When interpreted by different supply chain stakeholders, the definition of visibility might vary and/or become confused with other supply chain terminologies, such as traceability and transparency. While all of these terms are related, their meanings range in terms of scope, data timeliness, access capabilities, and stakeholder demands.
There are very few things that surprise leaders and their enterprises, considering what they have weathered over the last several years.
Even as the obstacles mount (global conflicts, export shortages, increased port congestion, energy disruption, economic constraints, evolving work environment), enterprises are unquestionably more equipped and better able to react to unpredictability more quickly. Part of this preparedness is the result of taking a proactive approach to supply chain management. Here’s a quick overview of trends that supply chain leaders will be focusing on in the upcoming years.
Firms are aware that geopolitical considerations may be the most expensive of all risks. The Russian-Ukrainian war, port blockades, and trade tensions between the United States and China threaten to split the global economy: at worst, multinational corporations could be obliged to reorganize their supply networks or, in some instances, operate duplicate supply chains with different technical standards.
In the future, as supply chains grow increasingly regionalized, conversations concerning near shoring and strategic sourcing will become more common. Businesses will incur additional expenses when they migrate to more stable and, in some circumstances, less cost-competitive marketplaces, invest in resilience over efficiency, and make longer-term investments in technology. Discussions are needed at the Boardroom level to evaluate prudent investments to counter global supply chain disruptions.
Decentralization of warehousing, or micro warehousing, entails the establishment of a network of local fulfillment centers in strategically important and density-favoring locations to improve the efficiency of last-mile delivery and truly reduce transit times.
Getting closer to consumers entails creating relatively small warehouses in locations such as shopping malls, allowing for faster delivery to clients while also incorporating a self-pickup capacity, so customers can pick up their items locally.
The method, while now employed mostly in e-commerce, the pharmaceutical industry, and supermarket distribution, is becoming increasingly popular in other industries. According to a recent Logistics IQ analysis, the micro fulfillment sector will have a total value of roughly $10 billion by 2026.
When you look at the GXI Vol.5 survey, just a tiny percentage of businesses have digitized their supply chains at this point. Over the last three years, fewer than 40% of companies have implemented digital platforms and data analytics, with less than a third utilizing cloud computing or taking advantage of IoT (the Internet of Things). In 2022, 65% of global GDP will be digitalized, and many firms will benefit from moving from analog supply chains to digital ones.
Supply chain 4.0, or the digital supply chain, is the next generation of supply chain operations that operate through a linked, integrated digital environment. Many current concepts, such as IoT, AI, blockchain, cloud computing, and smart devices fit under the supply chain 4.0 umbrella.
These digital technologies enable intelligent supply chain management by transitioning from a linear ecosystem to one in which data flows in multiple directions from a centralized platform.
The digital supply chain requires real-time information and simultaneous communication throughout the whole chain. It increases a company’s forecasting capacity, automates processes, provides for cost reductions, and improves the customer experience. One of the vital parts of the digital supply chain is a strong and agile data infrastructure.
Without a centralized data platform, or control tower functionality, it is becoming increasingly difficult to manage the global scope of supply chain processes daily.
Modernization of supply chain software is vital to completing digital transformation at the appropriate speed while meeting the daily evolution of business requirements. Digital supply chain insight can reduce the order-to-cash cycle, resulting in a supply chain that is faster, more flexible, and more efficient.
Visibility and exception monitoring allow for faster responses to disruptive actions that detail the best-laid supply chain plans. To support this monitoring more sophisticated, standardized, and integrated data is required as organizations strive to make their global supply networks more nimble and robust.
Nevertheless, when combined with well-designed automation, this symbiotic relationship may provide the finest supply chain visibility imaginable. By gathering data from linked devices, businesses can uncover new global supply chain patterns and trends.
As part of this transformation, your digital infrastructure is designed to enable your firm to be a disruptor rather than one that’s disrupted.
To provide for resilience and smart risk management, supply chains will need to ingest information at all levels and from multiple sources. How can this be accomplished? Data centralization can be the solution. Using a unified data architecture improves visibility throughout the global supply chain, reducing manual touches in operations to lower the risks of processing missteps and human error.
Resilience is driven by data consolidation and robust, integrated digital infrastructure. A high level of supply chain openness and connection can eventually lead to supply chain resilience. Investing in advanced digital solutions for data centralization and automation will be at the top of the list for firms looking to maintain global growth.
Supply chain visibility tools are also crucial to proactive supply chain change without disruption. They can assist businesses in streamlining procedures, tracking shipments and transactions in real-time, seeing historical data, and identifying supply chain gaps.
At the same time, data centralization software assists businesses in improving supplier relationships, increasing on-time delivery rates, lowering operational and personnel costs, automating procedures, and improving cooperation and communication throughout the supply chain.
Why is there such an emphasis on supply chain data management? Because today’s information-driven global supply networks rely heavily on data. Companies that fail to collect and manage supply chain data effectively are unable to make smart decisions today, let alone maximize supply chain performance for the future!
It is the quality of data, not the quantity, that is important. On average, 47% of freshly produced data records have at least one major inaccuracy. That’s why having tools for obtaining and sorting out quality data are needed.
Percentage of departments
Number of correct data records (out of 100)
Source: TADHG Nagle ET Al.
An essential step for supply chain leaders is to develop a set of best-in-class processes and tools for defining and managing data, identifying meaningful patterns, and generating critical insights into the performance of their enterprise supply chain.
For decades, huge corporations have struggled with data management. Almost all businesses invest seriously in data management, but many are dissatisfied with the outcomes.
While the problem does not appear to be getting worse, it is becoming more serious as managers and businesses attempt to become more data-driven, employ sophisticated analytics and artificial intelligence tools, and learn how to manage the data.
Companies have focused on data management technological skills which are handled by the IT team and are required to gather, store, and transport data. Building data infrastructure is no easy task, however, deploying SaaS solutions and platforms with diverse integration capabilities, including APIs and EDI can simplify the complex task.
Data is delicate and nuanced, and various individuals interpret it differently across disparate settings. Exacerbating this, certain departments may be hesitant to release their data since they own it; or, even if they are eager to contribute, they may not have the time to explain the details so that others may utilize it efficiently. As a result, other departments build unnecessary databases, further complicating matters and developing multiple versions of supply chain truths.
Data is usually developed in diverse silos of the company to suit the needs of individual departments, not for eventual use in data products, business practices, or processes in other groups. In contrast, consider a tangible product like a vehicle, where components like the chassis and starter are developed with a single, tangible result in mind.
Data supply chain management, with valuable datasets as core components, may assist in addressing these difficulties. It places equal focus on all aspects of data management, from data collection to data organization and consumption. It is a method of considering the advantages of common data with those of specific and customized data and applies to both internal and external data sources. Firms looking to optimize their global supply chains use data management as a competitive advantage.
According to the S&P Global survey, 65% of survey respondents said data is more vital to their work today than it was in the previous 24 months. 71% of respondents said it will become more important to their organization’s decision-making in the coming year.
A transparent, well-integrated supply chain keeps you up to date on all current processes and aids in the identification of problem areas before they spiral out of control. A solid supply chain visibility software solution provides all supply chain stakeholders with a clear and transparent view of all approved operations, transactions, and shipments.
A supply chain control tower is an integrated software system that captures every data point on the journey from the manufacturer to the end consumer; from raw materials to finished items. Control towers gather and extract relevant data by merging and expanding existing ERP, WMS, and TMS systems and merging it with data from suppliers, manufacturers, 3PLs, and other stakeholders, enabling granular visibility and a single version of the truth across the whole supply chain. As a result, the control tower program enables the improvement of supply lead times, cost reduction, and real-time exception management.
The use of a supply chain data management platform can improve supply chain visibility dramatically. Existing data warehouses and platforms serve as the cornerstone for technological advancement. Operating systems, cloud infrastructure, relational databases, security and integration architecture are the foundation that enable supply chain digitization, scalability and flexibility.
Visibility platforms provide a central point for forecasting freight spend, monitoring performance, and analyzing different data streams collected from partners, sensors, apps, and public data feeds. The Agisitx infrastructure automates & correlates data streams, thereby eliminating the need for users to login to multiple websites or manage daily email reports to monitor supply chain activity
The platform should have certain data management features as well as monitor and analyze different data streams, informing stakeholders of events and status changes, issuing alerts, and enabling predictive decision-making — in addition to serving as a central connecting point for data sources and applications.
Real-time shipment updates are required regardless of mode. If your carrier’s equipment, for example, can monitor temperature, the visibility platform should be able to track chilled freight and provide temperature information and warnings.
Even if the data is valid, it can quickly get stale. Access to real-time data is required to eliminate manual checks and balances.
A real-time visibility solution improves operational excellence after your platform is embedded in your digital supply chain. Such deep integration is only achievable if a system supports the vast majority of current data interfaces, both new and old, EDI, XML, APIs, and others.
As data from your technology providers and platforms clashes with carriers’ and third parties’ information, the need for analytical tools is more important than ever. Look for a real-time visibility solution that interacts with your present technology stack to better your business outcomes.
Data becomes increasingly valuable when it is actionable and appropriately understood. Predictive analytics enables businesses to get the most out of their data. Each metric can be broken down by location, channel, customer, supplier, and carrier. Most significantly, metrics can then be customized so that the organization can be laser focused on the most critical KPIs for their business.
Supply chain centralization and a robust integration layer can empower companies to leverage data science to gain insights into predictive ETAs, route and/or cost optimization across the entire network. While many companies do a serviceable job ‘marketing’ real-time capabilities, industry fragmentation and primitive data sources require a more pragmatic approach. Data curation and high fidelity data are critical to transform data into actionable information.
Disruptions in your global supply chain are inevitable. Though certain incidents cannot be avoided, supply chain visibility systems can provide tangible outcomes in terms of enhancing exception management.
When real-time visibility is paired with predictive analytics, it provides substantially greater insight into developing threats. With access to configurable email, SMS, and push alerts, internal and external teams can handle exceptions more proactively.
If a business wants to see a broad view of their holistic supply chain and to have an actionable grasp of what is occurring at each phase rather than merely follow the movement of specific outbound shipments, a visibility platform with automatic alerts will deliver a strong return on investment.
Agistix can help assist you in tackling all of your supply chain challenges through data centralization software. Our key advantage is a seamless integration that requires no change to your regular business flow. Implementation is stress-free and results can be seen in as soon as 4 weeks:
We have a deep understanding of the pain points of your supply chain. Our extensive technology expertise decades of industry experience and collaborative approach allow us to quickly deploy our platform without disrupting operations or IT resources. The Agistix platform is architected to support the evolving data schemas and data exchange requirements with any partner, and systematically implement without breaking the bank..
