Shifting consumer habits, interrupted transportation and unexpected, extreme fluctuations in supply and demand have caused major disruptions in the supply chain. The COVID-19 pandemic sent companies into short-term crisis mode, leading them to neglect long-term vision in favor of addressing more immediate challenges. As the dust settles, the realization that supply chain management will never look the same again has started to sink in.
For decades, supply chain organizations have relied on spreadsheets or pen and paper to track the movement of goods. Even today, the most technologically advanced organizations still function with siloed applications and operations. It’s how the industry was built. But traditional processes will no longer work post pandemic.
From suppliers to logistics providers to manufacturers and retailers, the extended supply chain is pursuing omnichannel connectivity in an effort to deliver innovative customer experiences, streamline operations, reduce costs and improve flexibility and resiliency. Packaged commercial off-the-shelf software and silos of automation are not sufficient to achieve such connectivity; that requires a focused effort on effective data management.
Uncover New Business Opportunities, Revenue Streams
COVID-19 was a catalyst for change in organizations attempting to tackle digital transformation. Which, in an industry that has a data overload, is like trying to boil the ocean. Organizations should instead take it one step at a time: Examine the business outcome they want and determine where the data is located that can help achieve the desired result.
Knowing where and how to leverage supply chain data isn’t always intuitive for businesses, but it’s more important than ever in a constantly changing business environment. Effective data management strategies in supply chain enable organizations to make intelligent decisions based on real-time, reliable data. They can also uncover new business opportunities and revenue streams, such as reduced overstock costs, increased visibility and optimized pricing and inventory based on consumer behavior.
There is no shortage of data when it comes to tracking and managing the flow of goods through the supply chain. But access to the data is not enough. Forward-thinking leaders must continually reassess the challenges and determine which data points will enable them to achieve their goals, and how to access them as quickly and accurately as possible.
For example, organizations can increase the frequency of forecasting to better collaborate with retail partners. Given the current volatility, this allows for more accurate data and better response and reaction to rapid changes. With more real-time data coming in at an overwhelming rate, more frequent forecasts lead to better accuracy, ensuring the right inventory, in the right place, at the right time. More accurate data provides increased visibility into the supply chain. This, in turn, can help reduce overstock costs.
Eliminating Siloed Systems
One of the biggest supply chain issues exposed during accelerated digital transformations is the shortcomings of siloed systems. According to a recent IDC report, the most critical gap is the “lack of supply chain visibility and resiliency to see necessary changes in time to react to them effectively.”
Most organizations are overwhelmed by the sheer quantities of data. Disparate systems generate data and produce reports independently, and so it’s no surprise that decisions are also made independently. A unified data management approach, however, can dramatically increase visibility across disparate processes and help organizations identify their blind spots.
Access to this harmonized data will allow IT departments to build machine learning into systems, allowing for more accurate scenario planning and thus greater supply chain visibility. This enables better understanding of customers’ changing needs, providing increased access to real-time data and valuable order, shipments and location insights.
For supply chains driven by the end customer, organizations have to be able to anticipate demand. Unified data management can help track customer touchpoints, delivering insight into behaviors. This speeds up decision-making, providing insights across disconnected processes, allowing companies to optimize inventories and forecast spikes in demand before either become an issue.
Creating Integrated Processes
Operational inefficiencies plague many retailers, manufacturers, logistics providers and suppliers. The culprit? Disconnected processes that are siloed in design and technology. The solution? The creation of automated, end-to-end integrated processes.
Taking on digital transformation needs to be tied to larger business initiatives and goals. Identify blind spots in your business and determine a specific initiative that can be improved by integration and automation. Work with your technology vendor to understand your situation, the goals you want to achieve, and what a proof of tech for those goals might look like.
Gartner recommends using metrics to drive behavior that “show the value of an integrated approach to combining cross-functional teams,” noting that “with higher stages of maturity, S&OP [sales and operations planning] focuses on business decision making and profitable trade-offs.”
Eventually, as your business evolves, you will have the agile and flexible tools and processes in place to capitalize on opportunities and manage future supply chain disruptions in the new era.
Andy Tunstall is Head of Retail and Supply Chain Solutions, UK, for InterSystems