Using Technology in the Supply Chain – Are You a Laggard or a Leader?
Recently Gartner surveyed more than 500 supply chain professionals to better understand supply chain technology focus, initiatives, value and challenges. Interestingly, about one in five survey respondents indicated that their organisation operates a highly fragmented IT environment with many non-integrated applications on varying technology stacks from various vendors. Contrary to this, almost two fifths of the respondents appear to have broken free from that world and are on the path to improving their technology landscape to support integrated end-to-end processes.
One of the top eight supply technology trends identified in this survey was the creation of edge ecosystems that rely on combining edge computing technologies with data processing capabilities. This can take shape in the form of smart machines and sensors providing reliable data for the Chief Supply Chain Officers (CSCOs). Often this is referred to as IoT (Internet of Things) technology. However, with an increasing amount of data being collected, the need for artificial/machine learning is becoming pivotal to distil this data into actionable intelligence that can create competitive advantages for the company.
It is therefore not surprising to see an emergence of predictive logistics platforms for businesses to execute, track, collaborate, predict and optimize the movement of goods and assets in real time, be that inside the 4-walls as well as out on the road. These platforms take data from multiple sources and process these with efficiency into operational intelligence to manage the company’s supply chain. The business benefits targeted with investments into these systems tend to focus on reducing operating costs by optimizing routes, scheduling, workflow process optimization and improved communications.
Another strong trend is the need to provide end-to-end traceability. This is already mandated for specific product categories such as tobacco and medicines, but according to research over 75% of customers are less likely to buy products from a brand if their reputation was associated with counterfeit goods. Just think back to 2013 when the horsemeat scandal broke and highlighted the lack of transparency in a supply chain from the meat industry to the supermarkets and ultimately the end-customers. Some major brands were severely damaged in the process.
The only logical way to maintain real-time visibility of individual items is by giving these a digital identity, and then follow this through the supply chain from raw materials all the way to the consumer. This is typically achieved by creating the identity in a cloud-based master set and then connecting the various supply chain systems that track and trace this item back to this cloud-based platform to follow the item through its journey. Often individual items are being combined, also called containerising, into what is eventually the end-product. Again, artificial intelligence and machine learning would be required to test the integrity of the journey so that any breaches can be identified and reported.
Unsurprisingly therefore that the Gartner researched identified edge-based computing and data collecting as one of the key trends. The main challenged we see however is the plethora of disparate supply chain systems. So, although CSCOs can identify where the company needs to be, it creates a significant challenge for their CIO counterparts to bring that vision to live.
Peak Technologies believe that there are a number of key components to overcoming this challenge. The first aspect is to decide what needs to be tracked or monitored. This could for instance be where a forklift truck is in the facility, where a trailer is in the yard or where a returned ecommerce purchase is in the supply chain. The next step is to identify the most cost efficient way of digitising this item. And there are many methods available. To name a few: QR codes, digital watermarks, Bluetooth beacons, RFID tags, Ultra-Wide Band (UWB) tags, GPS trackers and so the list goes on. At Peak we have created a partner eco-system that covers a broad spectrum of ‘identifiers’ that we can advise on.
The third main piece to the puzzle is which system(s) have access to the data, and if any integrations between systems are required. A typical rule of thumb is that if an item needs to be tracked only within the company, existing IT systems often have the capability to abstract the data required. In those instances, we would expect that an investment in the right analytics platform (as a bolt-on) is the most likely solution. However, if the item moves through different ‘owners’ and therefore different IT systems, it is more likely that a cloud based overarching platform would be required with its own AI tool set.
There are many solutions and edge devices in the market, from start-up brands all the way to mainstream players. Our consultants constantly monitor the market, test any new and promising technologies and solutions, so should your organisation be looking to take the next step into digitising the supply chain, feel free to engage us for advice and guidance.
Managing Director Europe
Peak Technologies Ltd.