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How resiliency forms the strongest link in the digital supply chain

How resiliency forms the strongest link in the digital supply chain


By Fabio Tiviti, Vice President of ASEAN, Infor

A new era of supply chains is upon us. Recent times have shown that the industry is poised for massive change on multiple fronts — wrought by disruptions, bottlenecks, and uncertainties around global trade. Even pre-pandemic, rising geopolitical tensions, market volatility and increasing customer demands for greater sustainability and visibility have weighed heavily on supply chains. Yet despite this turbulence, organisations that have built resiliency into both their technology networks and operations have recovered quicker and stronger on the uptake. For others, though, these disruptions have served as a huge wake-up call.

As Asia’s economies now ready themselves for recovery, businesses have found themselves at a critical inflexion point — to reflect, regroup and rebuild for resiliency.

Reports by EY indicate that Asia’s executives are already ahead of their global peers in rethinking their supply chains. But is there a right approach in building resiliency? If recent crises have demonstrated anything, it’s that resiliency can’t simply be a switch or dial that businesses turn on in the face of crisis. It needs to be built into businesses at a granular, executional level, applying to and connecting across the architectural foundations of every process in the company.

Visibility, Intelligence, and an Integrated Ecosystem

For supply chains to be truly resilient, they must be built upon three core foundations: visibility, intelligence, and a digitally connected ecosystem. Specifically, end-to-end, real-time visibility is imperative — businesses need to identify and understand the root causes of disruptions and detect exceptions when they arise. Then comes the ability to execute critical decisions through a digitised ecosystem, paving the way for autonomous ‘sense and respond’ capabilities.

In traditional business models, enterprises typically only base their visibility on what suppliers are saying. They don’t really know where consumer orders are, or when they are going to arrive. However, cloud-based supply chain networks offer the opportunity for all parties to access a single view of an order, in real-time. The net result is that businesses, their suppliers, and carriers operate using a single instance of data — a single source of truth.

This singularity is important. It mitigates uncertainties and delays as well as eradicates disparate views, so there is little need for contingency factor in daily operations. But visibility needs to run end-to-end for true clarity. Businesses need to understand the impact of their actions upstream (on their suppliers) and as far as possible downstream (into their sales channels and customer base).

Additionally, end-to-end visibility needs to be available in real-time, all the time, for any and all information relating to supply chain transactions, movements, price fluctuations, and the like. Without this data in high quality, it will be impossible to design and drive intelligently connected supply chains, that tap on Machine Learning (ML) technologies for exceptions.

Cutting through the noise 

As businesses move forward in strengthening supply chain resiliency, they can also leverage intelligent software algorithms that are able to detect and forecast disruptions across their operations and drill down into the root causes behind any single event. Beyond understanding that disruptions are present, businesses also gain insight from understanding why they happen. This enables much faster, more accurate issue resolution. For example, understanding the disparities between shortages caused by shifts in market demands, and the scarcity that results from a container ship stuck at port will result in fundamentally different responses that will ultimately impact business’ bottom lines.

The real strategic value here stems from being able to classify the various challenges around an organisation’s supply chain. If businesses can identify and pinpoint a similar root cause across multiple operational issues, they will be better equipped to deliver more accurate and effective resolution management.

An intelligent resilient supply chain can process thousands of variables and data sources across a single cloud-based platform to help businesses surge ahead. Working at speeds far more advanced than human capabilities, a digital supply chain ecosystem helps all parties connect and collaborate over dates, times, shipping orders, financing and so on. When all partners establish the external-facing portions of their own systems accordingly, critical decisions are made faster, with improved accuracy and less uncertainty.

Onward from automation 1.0

Looking ahead, more of the actions we take inside our most resilient digital supply chains will be carried out autonomously by intelligent agents and smart algorithms. Our physical and financial supply chain networks will increasingly reflect the automation intelligence already being applied to manufacturing via Industry 4.0 practices.

If we stand at automation stage 1.0 today, then businesses are set to apply more algorithmic intelligence in the future. This intelligence will be both smart and resilient, making decisions not just on short term prices, supply availability and market demand, but also based on perceived business longevity. Simply put, businesses need to rethink and rebuild their supply chains for resiliency today — to equip them to thrive in the disruptions and Black Swan events of tomorrow.