Supply chains have historically been a linear, inflexible flow but in today’s modern world there is now a requirement for flexible, agile networks that allow constantly evolving and tailored specifications.
End-users expect upgrades and tailored specifications across multiple channels. Organisations must simultaneously balance this evolving requirement with a need to stay within operating budgets. Therefore, supply chains must be conceptualised as a network set up to deliver continually developing specifications.
Moving from a traditional supply chain to a supply network will optimise operations and improve customer service while reducing operating costs. However, to achieve this organisations must accept greater complexity which cannot be managed by people alone, we are in the age of the cyborg. Organisations are managing the flow of materials and products amidst a growing number of ecosystems which must be coordinated to maximise value and maintain stability. The complication organisations must accept is not solely focusing on producing products quickly and within a cost envelope, but to anticipate demand and supply variables such as shortages of raw materials or border issues and proactively address them.
An effective supply network will leverage data-led decision making combined with automation (e.g. machine learning) to enable effective planning and automated responses to scenarios. These capabilities will deliver shorter planning cycles allowing for the evolution and increased specification of products.
To ensure companies can harness the network supply chains and not drown in complexity they need to focus on three core areas:
Data integrity
Organisations must prioritise a standardised data collection and analysis capability that can inform supply planning and coordination. It is unacceptable that if you want real time insight in the 21st century it requires significant human input at every step of the information flow. Every aspect of a supply network should be digitally integrated which will ultimately drive costs down and improve data quality. Digitisation has long promised to enable proactive and predictive decision making, but organisations must realise that this is only possible with a 360-degree view of supply chains and operations. The solution may lie in the need to digitise all operations for example equipping all or most of the supply eco system with sensors that provide near real-time feedback to the planning systems on issues such as COVID-19, requirement changes, raw material shortages etc.
Data driven decisions
Organisations should assess whether all or part of their decision making cycle can be completed in an autonomous way for example linking demand to supply and providing a single complete view. Configuring scenarios into systems is possible if you have data integrity thus enabling recurring and routine tasks to be automated, creating further efficiency across the ecosystem.
Culture
Currently most organisations, especially those born before the digital revolution (which arguably began in 2005 when the internet reached 1 billion users) do not prioritise data, data is still seen as an administrative overhead whereas it should be a core store of value and treated with care and attention. Once the battle over the value of data is won there will be a shift in the day-to-day activities of highly skilled people within an organisation. New tasks will be created. This point must be communicated by leaders and initiate a strategy of evolving the workforce to allow them to operate effectively in this new data rich environment.
The benefits of this approach are significant especially if organisations wish to monitor fast moving market dynamics, respond to developing requirements, anticipate changes to supply and understanding which events will have a major impact on parts of supply networks.