Supply Chain Management: The Key Factors Shaping it Today – Part 2

https://morailogistics.com/supply-chain-management-the-key-factors-shaping-it-today-part-2/

Supply chain management has undergone significant change in recent times due numerous external pressures—these are 4 more key elements shaping it today.

When there are dramatic changes in the supply chain, there has to be an equally robust response. That is the challenge supply chain management has had to face over the past year and in recent years generally. Supply chains live and die by how they respond and adapt to the ever-changing environment around them. Quality management involves finding the most pertinent facets of that environment and growing supply chains around them.

This article by Morai Logistics highlights several more prominent factors that are influencing supply chain management today.

Not as Competitive as Before?

Typically in the area of supply chain, competition is continually escalating. As technologies supporting supply chains get more powerful and ubiquitous, the stiffer competition gets. When applications exist that help supply chains become more efficient and productive, costs go down and profits up. Yet, despite this being the case, it’s not quite as simple as that.

There’s another consideration that greatly changes the competitive landscape, that being trade barriers. Given the state of trade disputes (particularly between a certain two giants on the global stage), competition is actually being driven down for many companies. Especially companies operating in nations with lower wages. As such, supply chain managers have to worry a little less about competition but a great deal more about the downsides of trade conflict.

Mass Movement to Urban Areas

Urbanization is hardly anything new. It’s a trend that has been taking place gradually over decades. Nonetheless, it is more relevant now than ever. Perhaps that’s because it’s reached something of a critical mass in order to drive monumental changes in supply chains. For example, the greater number of warehouses in cities that exist to accommodate the need for timely deliveries. Even if the pandemic has somewhat slowed this trend due to the rise in remote work, it remains a massive consideration for the way supply chains continue to be managed.

Greater Presence of Automation

In regards to automation and the supply chain, the question is: how much? Automation—and corresponding to it, the increase in the usage of robotics—is already a large part of supply chains. So, now what supply chain managers are going to have to consider is just how much larger that part is going to get. The balance between human and automated workforces seems to have reached some sort of equilibrium for now, despite previous concerns. However, if vehicles become fully autonomous, can that continue? It is this expanding role of automation that leadership will have to grapple with going forward.

The Need for Big Data

Finally, there’s the ongoing need for big data for quality supply chain management. Central to this necessity is artificial intelligence (AI), particularly machine learning. Machine learning grows more precise with more quality data. Machine learning has a number of functions, but perhaps its most critical is in its bolstering of supply and demand planning.

An article by Forbes further explains,

Over time, many more data inputs have been introduced into the demand planning process, and many companies are doing far more forecasts across different time horizons, products, and ship to locations. Supply chain planning has always been a Big Data solution. But machine learning works better the more data there is. SCP is becoming a Giant Data solution.

Supply Chain Management: The Key Factors Shaping it Today – Part 1

https://morailogistics.com/supply-chain-management-key-factors-shaping-today-part-1/

Just as the dimensions of supply chain have transformed, so has supply chain management in response to them—here are the biggest forces influencing it today. 

The supply chain landscape has seemingly undergone a seismic shift over the past year. Yet, much of what the pandemic has spurred on isn’t a shift in supply chain trends but rather an acceleration of them. Nonetheless, supply chain management has had to respond to this changing landscape, regardless of nature of the changes, as strategies that might have been on the horizon prior to COVID-19 are now imperatives for survival.

This article by Morai Logistics covers several of the most significant factors that are influencing supply chain management today.

The Ecommerce Boom

The growth in ecommerce has been astounding. For years it’s been rapidly rising. In 2020, that already incredible growth became even greater. This, of course, has implications all the way through supply chains. One more obvious implication is that managers have to put more emphasis on last mile solutions.

However, there are other less straightforward considerations they need to be mindful of, such as automation. The use of autonomous technology in warehouses has become even more useful. This is because they foster even greater productivity and, with concerns regarding the spread of COVID, they reduce human involvement.

The Need for Precise Personalization

Catering products or services as precisely as possible to the customer has become amongst the most vital components of quality supply chains. With digital transformation becoming the new norm for companies, it’s allowing management to harness the necessary technology (such as customer data platforms) to finely segment their customers and serve them accordingly. This means manufacturing itself as to be responsive and flexible too.

As a Forbes article on supply chain megatrends outlines,

Manufacturing automation…is making it easier to create many, many more product variants. Companies are beginning to explore on-demand manufacturing rather than traditional manufacturing models, meaning they can keep less physical inventory on-hand. Using a digital representation of parts allows manufacturers to make small changes to digital files quickly…

Supply Chain Softwares Hosted on Clouds

Modern supply chains need a variety of cutting edge softwares in order to stay competitive. What this has resulted in is more and more companies looking to cloud computing to host these applications. With the ability to implement and integrate new softwares quickly and scale operations accordingly, the cloud means managers have more solutions on their plate than ever before.

The earlier mentioned article by Forbes explains,

Covid-19 has also proven that cloud-based solutions can be implemented with far fewer consultants located at the customer’s site. Supply chain software suppliers have told me that in terms of implementations, Covid-19 was mostly a non-event; pivoting to remote implementation consulting was not that difficult.

IoT and Supply Chain Tracking

IoT’s had an increasingly critical role in supply chains in recent years. Their presence is only going to get stronger. In this case, it’s not a result of the pandemic. Rather, it’s because of the next generation of the internet becoming more widespread. As 5G becomes more widely available, supply chains can connect more devices to it.

It’s up to managers to evaluate how they can best utilize a more connected supply chain that has continuous real-time data available from various stages in the chain. If used the right way, IoT having a stronger role in the supply chain could mean better tracking of operations, the state of inventory, and more. Additionally, it could also mean greater visibility and thus transparency of the entirely chain.

What Does End-to-End Supply Chain Transparency Look Like?

https://morailogistics.com/end-end-supply-chain-transparency-look-like/

As consumer demands for transparency grows, the need for end-to-end supply chain visibility grows along with them—so what does such a supply chain look like?

Many of the changes in the way supply chains operate in recent years have come due to the pressure placed upon them to be more transparent. Customers (and others) want to know everything going on in a supply chain. They want to know what goes into creating their products, where they come from, how they are maintained, and much more.

Harvard Business Review underscored the importance of supply chain transparency in a post earlier this year,

Companies are under pressure from governments, consumers, NGOs, and other stakeholders to divulge more information about their supply chains, and the reputational cost of failing to meet these demands can be high.

As a result of this pressure, organizations are having to ensure that know about every aspect of their supply chains. That means them knowing their supply chain operations from start to finish. From where their raw materials are coming from to their product’s journey right into the customer’s hands. Moreover, they have to be able to easily share this information with their customers throughout the process. This is where end-to-end supply chains become a necessity.

This article by Morai Logistics explains what an end-to-end supply chain is and the prominent components such a supply chain needs for transparency.

What is End-to-End?

Investopedia defines end-to-end as,

End-to-end describes a process that takes a system or service from beginning to end and delivers a complete functional solution, usually without needing to obtain anything from a third party.

In the context of supply chains that means taking care of all the disparate operations that make them up. By having control of the totality of a supply chain, companies are able to guarantee that they know everything that’s going into them. In turn, reassuring their customers that their products are above board, ethical, and of good quality. But for their customers to be entirely satisfied, companies need to provide the necessary transparency throughout their operations. As such, their supply chains require certain characteristics to make that possible.

Digitized

The foundation upon which end-to-end supply chain management is built upon is digital transformation. The reason for this is that it enables the many technological tools that are needed for it. This includes automation, AI, machine learning, IoT, cloud computing, and more. Furthermore, it’s through such technologies that increased transparency becomes a reality.

For example, automation can increase the accuracy of data collection, making it easier to follow daily operations. Another is smart sensors, that can be put on the packages being shipped, providing information about where they are and what conditions they’re experiencing. Thus, it is through digitization that supply chains become intelligent and data driven. Consequently, they have more information for companies to provide their customers.

Connected

End-to-end supply chain should mean end-to-end visibility. A recent Supply Chain Digital article emphasizes this

A truly connected end-to-end supply chain has the aim to reach 100% visibility in real time which creates an integrated view across the enterprise, including, suppliers, retailers, manufacturers, outsource partners, and customers. This then allows companies to easily see any inbound problems and fire up tailored solutions where needed.

However, in order in ensure that there are no gaps in this visibility, supply chains require greater integration. Particularly, they need to have all their processes integrated. While some of that is achieved by social collaboration and dynamic strategy, that in of itself isn’t enough. Digital connectivity is equally important, as a well as having a central platform for all data to be aggregated.  Hence the need for digital transformation.

Traceable

One final component of transparency that may gain traction going forward is traceability. With the growth of blockchain, many are starting to place importance on being able to follow each transaction in a supply chain.

An ASQ article from earlier this year points out,

Traceability is also gaining prominence as a key issue, and permissioned blockchains provide one way to make this happen with sensor data and transaction data.

The Path to and Benefits of a Zero Waste Supply Chain

https://morailogistics.com/the-path-to-and-benefits-of-a-zero-waste-supply-chain/

Sustainability is becoming increasingly important in supply chains—here’s why a zero waste supply chain is not only realistic but beneficial. 

In recent years the expectation for companies to have supply chains that are sustainable has grown considerably. As a result, many have started making pledges and commitments outlining their transition to greener supply chains. Major companies like Nestle, Coca-Cola, and Unilever have all done so to varying degrees already. Other businesses will soon have to do the same if they’re to stay competitive in this environment.

As a recent article from Supply Chain Digital explains,

It’s clear that the ‘war on plastic’ is gaining momentum. As the world becomes more focused on the environmental impacts of plastic pollution, you should examine your supply chain and see how you can eliminate it.

With that said, converting a supply chain to zero waste doesn’t have to be difficult or complicated. And, in turn, if handled the right way, it can be useful beyond just meeting market demands.

This article by Morai Logistics highlights a realistic path to a zero waste supply chain and why having such a supply chain can be advantageous.

What is a Zero Waste Supply Chain?

A zero waste supply chain, just as the name suggests, is a supply chain that produces no waste. This means ensuring every step within the supply chain is sustainable—the materials are either reused or recycled, so that there is no trash. In turn, what this amounts to is no waste ending up in landfills or incinerators.

Such a goal might sound highly ambitious, verging on unfeasible, but that isn’t the case. Rather, it’s a necessary objective that companies like Unilever are already making a reality. Keep in mind that, for example, in the United Kingdom a majority of consumers are willing to pay more for products that don’t use plastic packaging. And that’s just plastic, only a single component of green supply chain. The demand is there. It’s up to companies to meet that demand.

Why is it Beneficial?

An entirely sustainable supply chain is beneficial for a number of reasons. First of all, it’s great for efficiency. Since zero waste supply chains cannot afford to be excessive in any way, that means they have to be careful with processes and materials that they are using. This leads to extreme efficiency. This efficiency leads to cost reduction, since less has to be spent on materials and superfluous operations.

Moreover, a sustainable supply chain is good for the environment. This isn’t just a feel-good benefit. It also means companies are likely to receive government incentives, while avoiding sanctions. Thus, it’s not only a good thing to do, it’s also a business friendly move. Additionally, it’s good for a company’s image, which in turn can attract more business.

How can Supply Chains Make a Transition to Zero Waste?

Making the switch to zero waste isn’t as challenging as it might seem. Like with any other major change, the first thing to do is come up with a strategy. In this case, a sustainable supply chain strategy. Then formulate reasonable goals as benchmarks on the route to the ultimate objective of zero waste.

Furthermore, it’s important to have key indicators that you can examine to see if you are being successful with those goals. Essentially, the transition is about starting broad (the strategy) and getting increasingly granular and specific until it’s ingrained into your company mindset and culture.

Finally, there are the four R’s as outlined by Unilever.

Unilever credits its four ‘R’ approach to achieving zero waste. The four R approach encompasses: reducing, reusing, recovering and recycling. Viewing waste in this way – as having various potential alternative uses – can be introduced across all businesses.

The Internet of Things (IoT): 4 Ways it’s Advancing Supply Chain Management

https://morailogistics.com/iot-4-ways-advancing-supply-chain-management/

The growth of the internet of things (IoT) has enabled significant advances in supply chain management—here are 4 of the most notable advantages it has afforded managers.

The world of supply chain management touches upon technological innovations and vice versa. As such, it’s no surprise that the internet of things is having such a notable impact upon supply chains. The growth in IoT has been nothing short of staggering and its applicability near-ubiquitous in terms of the multitude of fields it’s operative in. With that being the case, it really is hard to overstate the size of the market that IoT has and is set to have.

The following summation by Tech Jury of where IoT is headed over the coming year really highlights this,

Morgan Stanley predicts the industrial IoT market size to reach $110 billion by 2020. According to Accenture, IIoT could add $14.2 trillion to the global economy by 2030. The top drivers of IIoT growth include improved operational efficiency, improved productivity, creation of new business opportunities, reduction in downtime, and optimization of asset utilization.

With that in mind, this week’s article by Morai Logistics takes a look at the 4 most prominent ways in which the internet of things is benefitting supply chain management.

Makes Asset Monitoring Easier

One of the biggest things IoT allows for in supply chains is the monitoring of assets. By having monitoring devices like smart sensors that can be constantly connected to the internet, the state of a supply chain’s asset can be be continually checked upon.  Specifically, these sensors can inform managers of the damage done to the packaging as well as the environment the asset is in—temperature, moisture level, etc. Such monitoring is critical to optimal supply chain management as it ensures the thing central to a chain—the product—is always being examined and thus is in good condition.

Improves Asset Tracking

Building upon asset monitoring is asset tracking. Using the same kinds of multipurpose IoT devices mentioned above, such as smart sensors, supply chain managers can not only track the condition of their assets but also see where they are. In turn, this means managers can overcome a number of obstacles they have. The most important of these being misplaced or lost assets. But more than that, it gives managers another view of their supply chain route. Consequently, these routes can be further optimized if needed.

Allows for Predictive Maintenance

Nothing hampers a supply chain quite like the breakdown of equipment. With just one cog in the supply chain out of order the whole things comes to a halt. With IoT such a circumstance can be avoided. Rather than reacting to equipment failure or running routine maintenance, managers can conduct maintenance with precision. With sensors on the equipment, they can know exactly when their machinery needs maintaining. As a result, managers can minimize inefficiencies and avoid supply chain collapse.

Boosts Supply Chain Transparency

The customer demand for transparency in supply chains is as high as its ever been. Nevertheless, given the complexity of supply chains, its not always easy to enact. However, this is where technology comes to the rescue. Namely, IoT. Managers can have the many links in their supply chains monitored, tracked, and examined. IoT devices like surveillance cameras and smart sensors can make following supply chains easier than ever. Consequently, IoT can help boost both customer satisfaction and supply chain integrity.

Supply Chain Management: Overcoming Extreme Weather

https://morailogistics.com/supply-chain-management-overcoming-extreme-weather/

A critical component of supply chain management is planning around risks that can compromise the chain, and few risks are more disruptive than extreme weather.

In a time when the ill-effects of climate change are being felt around the world more than ever, supply chains have to mitigate for those effects to function year-round. Of course, what makes extreme weather so troublesome for supply chains is that it’s unpredictable and can come in many forms. With each form—flooding, storms, freezing temperatures, etc.—coming with its own host of problems. It’s imperative then that supply chain managers help form their chains with the possibility of extreme weather in mind and plan accordingly.

Resilinc spoke about this and the importance of planning around disruptive weather in their blog,

Bad weather tests the agility and resiliency of even the best supply chains. However, companies that manage weather-related disruptions as part of their event-monitoring best practices and supply chain risk management strategies tend to fare better than those that don’t take preventative measures, Resilinc’s work with customers shows.

This article by Morai Logistics highlights some of the key ways that supply chains can navigate the risks of extreme weather.

Have a Back-up Plan

At times the weather event that hits a supply chain will be too great to overcome. No amount of resilience can overcome a hurricane, for instance. This is when it’s crucial to have an additional plan in reserve. So, in practice this could look like a warehouse being impacted by bad weather. And, in response, those in charge of the supply chain having some spare carriers ready at another warehouse (at a separate location) with the same product.

While this is an additional cost, considering the physical and reputational damage bad weather can inflict, it’s a necessary one. Not only that, but, in the long run, a potentially cost-saving measure too.

Embrace Technology

There’s a variety of technology that helps supply chains work around or anticipate extreme weather. Foremost amongst this technology is artificial intelligence, particularly machine learning. Via machine learning supply chain companies can gain access to data regarding internal and external risks, including weather.

This means having the latest information about the weather as well as the most precise predictions possible regarding it. Thus, through this technology supply chain companies can potentially avoid extreme weather by anticipating it. Or, at the very least, they can start planning for the weather as soon as possible.

Flexibility

A supply chain needs the ability to maneuver whatever comes its way. This is true in general but especially so with extreme weather. There will be instances where the weather isn’t so bad that the supply chain is completely brought to a halt. Rather, more often than not, the weather will require supply chain adaptations to still function. These can be as simple as taking a slightly altered route.

This point was emphasized in a Supply Chain 24/7 article about El Niño,

The key to riding out a situation like El Niño is to have a supply chain that is flexible enough to adapt. With an efficient and accurate inventory process, you’ll know what must be shipped by air and what can wait the extra week to arrive via ocean.

Robust Infrastrucure

Even with great technology, planning, and flexibility, each facet of a supply chain needs to be strong enough to deal with harsh weather conditions to some extent. For example, a supply chain’s warehouse should be able to withstand strong wind without being breached. Or, its production facility should have a variety flood-proof installations so that a flood has minimal impact upon it. In turn, when the products are being transported they might need to be temperature controlled. All in all, each step of a supply chain needs to have resiliency. So it can handle whatever weather conditions it might face.

Supply Chain Management: Addressing the Globalization Problem

https://morailogistics.com/supply-chain-management-addressing-the-globalization-problem/

Alongside the many opportunities globalization presents for the supply chain industry are potential pitfalls, as such, preparing for them is crucial to the industry’s health.

Globalization has had many positive effects on supply chains. From greater market growth due to an increase in demand, to greater connectivity due the rise of the internet. With that said, the many positives have come with corresponding risks.

Milosz Majta, outlines this in his Forbes article,

Just as there are benefits and costs of globalization, there are similar pros and cons of a global supply chain. In particular, companies need to manage the related risks.

This means that those managing supply chains need to be able to mitigate for these risks if they want to see the upsides of globalization. After all, globalization is like any other major develop in market demand and pressure, resulting in both opportunities and threats. Crucially, the ability for companies to sufficiently overcome these threats is greater than ever. This in no small part being due to advances in machine learning, artificial intelligence (AI), and automation.

This week’s article by Morai Logistics highlights the obstacles that supply chains face as a consequence of globalization and what they can do to solve them.

Harmful External Factors

When managing a supply chain on a global scale, damaging external factors are more likely to come into play. These factors can look like political instability in countries, natural disasters, wars, etc. Ultimately what any of these factors amount to is a potential breakdown in supply chains. If a country’s government is in turmoil, its ports could be affected. If war breaks out, certain supply chain routes may no longer be safe. The same applies to a dangerous weather event. All these factors become more likely due to the scale and variability globalization brings with it.

This a risk that can’t always be mitigated for by its very nature—it’s external. The best a company can do is to have contingency strategies in place for each potential event. Even then, its strategy will ultimately be reactive. In turn, this threat does present an argument for regionalization. As regionalization reduces the problems of scale and instability.

Uncertainty

Market demands and trends become harder to prepare for the more actors that can influence a supply chain that are at play. With globalization comes the largest number of actors possible. In turn comes a staggering influx of data which gets increasingly hard to process, analyze, and make predictions off. Thus, supply chain companies have the potential to be floundering in the dark.

Here is where technological advancements become crucial in combatting globalization threats. By being able to automize data entry and collection, as well as process that data via AIs, this threat is greatly minimized. Once data collection becomes an automated procedure, keeping track of data becomes simple. And, with that data, an AI can make predictions and forecasts that make better sense of the market.

Complexity

More links in a supply chain mean more points of possible weakness within it. With globalization, supply chains are longer, involve more stops, take more time, and include multiple lines of communication. Consequently, this greater complexity requires greater oversight, as even one weak link can vitiate the whole chain.

This byproduct of globalization can be addressed in large part through the technologies mentioned previously. The increasing complexity in supply chains can be simplified by automating processes along it. Moreover, the reliability of a supply chain can be increased by the forecasting of AIs. Finally, the oversight needed along each link in the chain can be better achieved through blockchain technology.