It is going to be increasingly complex for industry and companies to manage supplies, which is why it is essential to adapt to the new global environment.
Contexts of uncertainty and constant change such as the current one require agile and efficient supply chains prepared to face the most demanding unforeseen events and demands. Only in this way can the most appropriate decisions be made at all times, in order to continue operating, avoid breaks in stockmeet service levels, ensure supply and protect revenue.
A large majority of supply chains, even the most “sophisticated”, maintain a similar approach. Strive for predict the future with the greatest accuracy and, from there, they optimize that forecast within the context they face. But, today, the world is unpredictable and disruptions and unforeseen events cannot be planned for. We therefore need a new paradigm of supply chainwhich makes it easier for corporations to take on the complexities successfully.
Let’s explain it with an example: the modern GPSfacing maps of old road. It is not enough to know where to go (the plan), nor to choose the shortest or fastest route on the map, depending on our needs. What is important is to constantly collect information on the state of traffic and the roads and, if necessary, to be able to change the route in real time and thus be able to avoid any unforeseen event.
One might think that to achieve this, it is enough to automate the process based on the possibilities offered by digital technology. However, automation by itself will not provide the supply chain with the flexibility to anticipate changes and deal with unforeseen situations. It can happen, in fact, that it offers us an optimized solution to a problem that no longer exists.
Automation by itself will not provide the supply chain with the flexibility to anticipate change
It is about highlighting, in this sense, that companies must add to that technology two fundamental capabilities and that they will be even more in the coming years. On the one hand, the ability to monitor the current state of the supply chain and anticipate possible disruptions in the short term and, on the other, to be able to make decisions and act based on unforeseen events or changes that occur.
These two potentialities must be deployed in turn in three essential components. First, to have a platform that evaluates and detects internal and external signals from end to end of the network in real time (with all the data that is collected throughout the process) and anticipates disruptions in the supply chain. The second piece is a tool based on artificial intelligence (AI) and real-time simulations, which proposes appropriate corrective actions according to the analysis of scenarios and risks.
Third, it is essential to have an agile and collaborative operational methodology, that involves both human teams and physical resources, to ensure decision-making at the right time and with the necessary information.
Recognizing all these potentialities will lead organizations to radically change the way they look at and assess the suitability of the supply chain in question. In this way, instead of focusing, as they have been doing up to now, on reducing costs and automating operations, it will be critical to identify the blind spots and blind spots that prevent deviations or obstacles from being identified in time. and overcome the rigidities that prevent the supply chain from responding to the unforeseen.
The adoption of this new paradigm It will allow organizations to build versatile and flexible supply chains capable of facing new challenges. Constant monitoring, but above all the early and rapid identification of possible problems, is a guarantee of success in these changing contexts.
In the coming years everything points to supply chains will become even more networked, which will provide greater external coordination to the strategic assets of the organizations.
There will be two trends that will mark the evolution of supply chain. The first will be that as digital advances are consolidated, operating costs will continue to be reduced and it will be more efficient to obtain solutions from outside and not from within the company. And second, it will be more difficult for organizations to maintain the best internal supply chain competencies in a number of emerging technologies such as the IoT or the most sophisticated AI algorithms.
It is clear that building a supply chain ready to face today’s world is not an easy task, but it can be done and, moreover, it is essential. Better start now.
*** Álvaro García Lombardero is a partner at Kearney.