Digital Transformation In The Supply Chain
By now, most of the manufacturing world is aware of how digital transformation is impacting industries around the world.
For those who see the benefits, embarking on a journey with a digital roadmap firmly in hand will generate positive results.
For those who have not begun their journey – whether because they haven’t yet found a suitable starting point or just don’t grasp the enormous opportunities in store – the clock is ticking.
There is no single area in the manufacturing process that has not been affected by this digital revolution which often goes by the name of Industry 4.0.
From the factory floor to the front office, Enterprise Resource Planning and Customer Relationship Management software platforms are producing strong, measurable gains in efficiency that are feeding directly to both the top and bottom lines in small, medium and enterprise-level companies around the world.
Re-Imagining The Supply Chain
One of the most critical elements to a manufacturing operation is its supply chain.
Managing the supply chain properly ensures that product is manufactured properly, on time and delivered without interruption to customers.
‘Supply chain’ is the appropriate moniker; each supplier in the network of suppliers is a link in the chain that serves the manufacturer.
And, as they say about chains, they always break at the weakest link.
In the (not so distant) past, supply chains were concerned with the availability, movement and cost of raw materials.
Today, thanks to the digital transformation that has taken hold, supply chains are about the management of data, services and, of course, products.
Supply Chains That Think
IDC refers to the modern supply chain as a “thinking” chain , “one that is intimately connected to all data sources, enabled with comprehensive and fast analytics, openly collaborative through cloud-based commerce networks, conscious of cyberthreats, and cognitively interwoven.”
That’s a mouthful, to be sure, but the point is that supply chain management has evolved the ‘where’ and ‘when’ of raw material supply to a much higher level through the gathering and analysis of data.
IDC reports that, in 2018, supply chains had 50 times more data available to them that just five years previously.
Data is useless unless it’s analyzed. It’s like a guitar that’s never played; there’s no music.
Powered by ERP and CRM
That’s where the power of ERP/CRM software integrations comes to the fore. Avalanches of data are collected minute by minute from each ‘link’ in the supply chain and rapidly analyzed at the manufacturing facility with recommendations generated through the built-in artificial intelligence (AI) algorithms.
A clear example of how such a data-linked and data-driven supply chain can benefit a manufacturer can be found in weather predictions.
Every summer and stretching into November, the potential for hurricanes in the Caribbean is high. True, not every hurricane season produces hurricanes but a constant examination of weather data in that part of the world can generate high probability forecasts and alert all suppliers in a supply chain to adjust accordingly for potential delays or outright disruptions in the flow of raw material or finished product.
Likewise, an AI-driven prediction of spikes in gasoline prices that could drive transportation costs dramatically higher due to global oil disruptions can lead to a recommended change in production schedules and raw material deliveries.
In The End, It’s The End User
The elephant in the room in this discussion, of course, is the customer.
No one would care about delivery dates, inventory interruptions or quality control if there were no customers. Of course, there would be no business, either.
So, the whole point of getting to grips with how AI in the supply chain can give manufacturers a competitive advantage and a stronger bottom line is in order to better serve and service the customer.
It’s vital to remember that, just as manufacturing is being changed by the driving force of technology, so, too, is the customer who is now accustomed to having product information, delivery dates, invoice details and price quotes at the end of a smartphone.
Where To Begin?
The task of reformulating a supply chain so that every supplier is optimizing the available technology is large – but achievable.
A streamlined supply chain, driven by and responsive to data, is a boon to any manufacturer.
Sometimes, though, it’s difficult to know where to begin. However, the rewards for doing so will pay dividends for many years to come.
Gerent has produced a white paper entitled “A Digital Transformation Roadmap for Manufacturers” to provide some counsel on establishing a starting point and taking the initial steps on the digital journey.
It’s free for the asking.