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The Art of Composing a Self-Orchestrated Supply Chain

The Art of Composing a Self-Orchestrated Supply Chain


By Ashish Pujari, General Manager and Vice President, IoT and Digital Supply Chain, SAP Asia Pacific & Japan

Music captivates me. I love listening to classical orchestras and marvel at how so many different instruments can come together to create something so beautiful and pleasing to the ears. The same concept of working in harmony is a principle that should be applied to the supply chain. And this is more important than ever – in the past, a strong supply chain management system would suffice. Now, in our “I need it now” and “only unique products” mindsets, supply chain management needs to be taken to the next level to address both the issues of timeliness and personalisation.

The supply chain is increasingly becoming more complex as consumer demands evolve into a more immediate buying process with the rise of e-commerce. Retailers and businesses tend to have a knee-jerk reaction towards this and have been startled into shifting gears fast in an attempt to adapt their operations to include easier online purchasing, faster delivery, and in-store pickup options. However, deploying piece-meal technologies to plug in a gap in one stage is not going to be sustainable.

Businesses need an integrated and self-orchestrated supply chain powered by intelligent technologies, one that is hyper-connected enough to automate processes, one that is predictive enough to deliver real-time insights. A self-orchestrated supply chain is going to radically change the way businesses keep the lights on and allow them to focus on areas that will add value to their customers.

Here are three ways businesses and retailers should deploy emerging technologies to make their supply chain self-orchestrated, obtain greater visibility and control, and eliminate inefficiencies for better business outcomes.

  1. Manage diversity with Blockchain

Manufacturing is increasingly transforming into an intricate operation involving a myriad of suppliers and processes. As the global marketplace becomes interconnected and yet more competitive, businesses are keen to expand their supply networks beyond their own borders. The added complexity of the supply network poses a challenge for transparency, security, and accountability.

Blockchain, a technology popularised by Bitcoin, can be deployed to address this emerging problem and build deeper trust among multiple stakeholders along the supply chain. Using a cryptographic system to validate a shared ledger in real-time, blockchain allows each step of the supply chain to be documented and accounted for. This streamlines and reduces complexity within the supply chain, as records are now easily verifiable and sensitive information is protected.

From moving goods along the production floor to validating the credentials of recipients, blockchain holds much promise in reducing complexity and enhancing efficiency and security within the supply chain.

  1. Enabling a more connected ecosystem

With the growing complexity of the supply chain, the ability to monitor all processes in real-time from supply to delivery is crucial to enhancing logistical efficiency. The Internet of Things (IoT) is transforming industries and companies are eager to dive in – DHL recently announced plans to implement IoT technology into warehousing, which will allow real-time monitoring of operational activities and address potential safety blind spots.

The greater adoption and implantation of IoT will provide unprecedented benefits, addressing the issue across complex supply chains and reducing the risk of oversights. With better oversight on all the processes and movement of goods, businesses would be able to analyse data in real time and trim down inefficiencies, leading to faster deliveries to the end-consumer and less idling of goods in the supply chain.

  1. Taking on the final journey

As e-commerce continues to boom and consumers start to expect same-day delivery, the cost and logistics in e-commerce will increasingly become a challenge for retailers and courier services.

According to McKinsey research, the ‘last-mile’ is often said to be the most expensive and yet least efficient part of the supply chain, often reaching or exceeding 50 percent of the total delivery cost. For courier companies, solving this hurdle would offer a bigger share of profits and quicker deliveries to customers.

Drone delivery, once seen as a hallmark of futuristic cities, is now becoming a reality with companies such as Amazon experimenting with using drones to deliver parcels. Drones offer the added benefits of operating autonomously and enabling delivery to remote areas. Coupled with cloud computing and artificial intelligence, the possibility of a self-managing delivery network can soon be realised. Additionally, this would also augment human-based delivery that is often hindered by error and factors such as heavy traffic and fatigue.

Realising the self-orchestrating supply chain

The supply chain is undergoing rapid transformation and businesses need to look to new possibilities such as blockchain, IoT, and drone delivery to revolutionise how the entire line from parts sourcing to the last-mile is managed and operated. This will transform the supply chain from being compartmentalised into various segments to an integrated network that is characterised by speed, efficiency, and autonomy.

The key would be for businesses to see themselves as intrinsically linked rather than individual entities along the supply chain. If companies can keep up with these and adopt new initiatives to innovate, they will be able to gain a competitive advantage and provide better value for the end- consumer.