Supply Chain Advances On Critical Path To Transformation

Dwight Davis

Product-based companies in the midst of transforming their business processes – or even their core business models – can’t do it on their own. In today’s digitally driven, always-connected, and real-time business climate, transforming your company also requires that you do the same with your supply chain.

Accomplishing this goal means increasing coordination, visibility, and speed across your entire supplier ecosystem, which is no easy matter. Electronics manufacturers, food distributors, big-box retailers, and many other types of firms may source hundreds or even thousands of items from dozens of suppliers around the world. Making sure that the right, high-quality components or items are available when needed is a tough nut to crack – even when your core business is stable and predictable. But if your move is out of sync with your supply chain, you could very well cripple it.

Fortunately, the collection of software and other technologies relevant to supply chain management (SCM) has continually grown more sophisticated and effective. For some time, SCM software has been able to help companies achieve just-in-time product deliveries, minimize inventories, and coordinate primary and secondary suppliers. Now those systems can also leverage Big Data analytics to forecast changing market demands, track component failure rates, and reveal other critical insights in near real-time. They can even factor in one-time events – such as storms that may slow in-transit shipments or a factory fire at a key supplier that necessitates alternate sourcing.

In all of these scenarios, speed matters. For example, one high-tech company was able to move from a static, long-term supply chain planning mode to a dynamic operation that allows for real-time visibility of inventory across 1,200 locations.

The pairing of the Internet of Things (IoT) with cloud computing is also helping companies make their supply chains more responsive, transparent, and coordinated. Companies are affixing sensors, controllers, and other IoT-connected devices to everything from single components to shipping containers. These devices are multiplying in factories and warehouses and across fleets of ships, trucks, planes, and train cars.

With hundreds or thousands of connected IoT devices generating and communicating granular data across your supply chain, your company can shift from making educated guesses about your partners’ production rates, quality numbers, and shipment locations to having real-time facts about these and other data points. For geographically dispersed supply chains, that IoT data can be sent to cloud-based data centers for storage, analysis, and SCM operations.

This synergy between IoT and cloud in the supply chain can materialize in some unexpected places. Hagleitner, an Austrian hygiene company, equips restrooms in restaurants, hospitals, and cruise ships with sensors to track stocks of soap, paper towels, and air freshener. The data collected – up to 27 measurements for a single soap dispenser, for example – is sent to a base station and then to a cloud-based system for analysis. That analysis helps the company balance supply with demand, minimize inventory storage requirements, and deploy cleaning personnel as efficiently as possible.

True, modernizing and transforming a complex supply chain requires time, persistence, and patience. Inevitably, these efforts introduce a variety of challenges, with expanded security threats high on the list of concerns. When you have potentially thousands of IoT devices communicating information about your supply chain partners and shipments, securing those devices and their transmissions quickly becomes a high-priority requirement.

Challenges notwithstanding, the many benefits of developing a transparent and highly responsive supply chain are hard to ignore. And companies seeking to transform their own operations shouldn’t forget the importance of bringing their suppliers along for the ride.

What role does real-time information play in digital transformation initiatives and why shift to a real-time business?  Read the EIU report to learn more!

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Dwight Davis

About Dwight Davis

Dwight Davis has reported on and analyzed computer and communications industry trends, technologies, and strategies for more than 35 years. He worked as a senior editor at several leading computer and business publications from the late 1970s through the mid-1990s. Dwight then took the helm of Windows Watcher, an award-winning corporate newsletter focused on Microsoft and its ecosystem of partners and competitors. Next, Dwight spent 10 years working as a leading industry analyst, first at Summit Strategies and then at Ovum. At these market-research firms, he ran a variety of infrastructure software strategic services. Those services tracked and analyzed leading vendors (Microsoft, IBM, Oracle, SAP, HP, Sun, etc.) and innovative start-up firms, as well as cutting-edge technologies and business models. His areas of expertise include cloud computing, service-oriented architecture, cybersecurity, mobile computing, and Web services. Since 2009, Dwight has worked as an independent analyst and writer.