Images of threadbare store shelves and container ships idling offshore tell the story: The global supply chain has been damaged, and manufacturers are struggling to fulfill orders.
In this crisis, more manufacturing companies are realizing the value of digital tools to maintain inventories and satisfy customers. For 80% of chief supply chain officers, accelerating supply chain digitization efforts is essential, according to Accenture research.
In this Workflow roundtable, we asked four specialists in supply chain management to discuss how digital workflows can help manufacturers meet their logistics challenges.
Resilient supply chains depend on visibility
In the modern supply chain, you’re solving the classic fundamental problem: reconciling your customer’s demand with your ability to supply it. You’ve got a manufacturer, distributors, suppliers, and other companies in the ecosystem, but in many cases they don’t know what’s going on at the other nodes in the supply chain. So they’re making guesses.
Visibility makes it so much easier to make sure that inventory’s going where it’s needed. That’s hands-down the single biggest benefit of technology resiliency. If you have a glut of inventory in one location and not in another, you can make real-time decisions thanks to better visibility that’s technology-enabled.
Amazon’s a great example. They’ve got fantastic information they share back with their suppliers through a portal that gives people real-time visibility to the inventory positions and the sales levels. That’s going to make you more agile and resilient.
— Stephen Meyer, supply chain research principal director, Accenture
Digital supply helps meet customer demand
The classic challenge supply chain leaders face is meeting customer needs without increasing supply chain costs. An example of the trade-off is inventory safety stock: I can always satisfy customers by holding high levels of inventory and shipping in an expedited manner, but the cost of excess inventory and fast shipping may not be sustainable.
Digital supply as a business strategy offers an opportunity to reduce this trade-off. By understanding customer demand with greater accuracy, an organization can design a supply chain that meets or exceeds customer expectations and performs more efficiently. It begins with understanding customer needs and then follows the fulfillment of demand through delivery. Think of digital as more of a customer-driven business strategy, rather than the fulfillment of orders received from sales.
— David Kurz, associate clinical professor of management, Drexel University
Buying time amid a chip crunch
A lot of companies are facing a chip crunch as manufacturers have been unable to meet very strong demand during the pandemic. Digitized workflows across the enterprise may have alleviated some of these pains. A secure and collaborative platform of execution that improves transparency and accountability would, for instance, enable chip makers to reduce waste andmore rapidly respond to changing market conditions.
Automotive companies, in particular, have been unable to meet demand for vehicles because they rely on Tier 1 and Tier 2 original equipment manufacturers (OEMs) to maintain the relationships and orders with chip manufacturers. OEMs are now looking to change that by creating more direct relationships and partnerships with chipmakers. Here as well, digital workflow would be a big advantage. With ServiceNow’s platform, for example, automotive OEMs receive insights from supplier data, such as any risks or shortages related to the chip supply chain; OEMs could then engineer contingency plans or workarounds directly with chip manufacturers.
— Shruddha Agarwal, global director of technology industry solutions, ServiceNow
Doubling down on supply chain digitization
Many high-tech companies have been able to navigate the challenges of the past year because, years ago, they put in the multitier visibility and coordinated workflow solutions. I know of a company in the high-tech sector that has four tiers of its extended supply chain working off a unified platform. There’s a common view of data and information, and of what constitutes an exception or a problem. Additional tools help the company evaluate the impact of an issue and produce robust analytics.
Traditional manufacturing companies, and maybe some consumer accounts, are not as fortunate right now. They’re throwing human energy at the problem and manually tracking down the information they need on both the demand and supply sides. I host a chief supply chain executive forum, and everyone involved is using this past year’s challenges to double down on digital and replace physical information flows that hamper effective decision-making.
— Rob Barrett, U.S. supply chain practice leader, KPMG