Building Resilient Supply Chain in 2022
The Covid-19 pandemic disrupted supply chains worldwide, with around 94% of Fortune-1000 companies reporting supply chain disruptions because of the pandemic.
Since the Russian evasion of Ukraine erupted in February of this year, we’ve seen geopolitical and economic uncertainty grow, placing ever-more emphasis on the importance of having a resilient, agile supply chain.
Such disruptions can not only result in shortages and higher prices among high-end consumer products like cars but can also affect prices and the availability of day-to-day commodities.
Lastly, as a result of rapid technological advancements, we’re witnessing a staggering spike in the number of customers purchasing products online.
And with industry giants like Amazon & Alibaba already offering one-day delivery, small businesses are finding it incredibly hard to keep up – as they find themselves overwhelmed by both physical and logistics infrastructure challenges.
As of this writing, we’re living in “The Great Supply Chain Disruption” era. And with the Covid-19 pandemic, ongoing Ukraine-Russia conflict, climate change crisis, poor data management, ever-increasing customer expectations, and various other factors limiting businesses, building a resilient, networked, and collaborative supply chain is critical.
To tackle the challenges and problems caused by supply chain disruptions and in their attempt to build resilient supply chains, businesses are investing their top dollars in supply chain technologies.
Nearly 38% of supply chain organizations are looking forward to improving technologies for supporting their end-to-end processes. Alongside this, about 50% of organizations have been predicted to invest in artificial intelligence as well as advanced analytics by 2024.
Throughout this article, we’ll be talking about how businesses can use technologies to build a truly resilient, networked, and collaborative supply chain in 2022.
How to Build a Resilient Supply Chain in 2022?
Following are the five points we’ll be discussing:
- How Can Blockchain Implementation Help Businesses Build Resilient Supply Chains?
- How are Businesses Already Using Artificial Intelligence & Machine Learning?
- Why is it Important For Businesses to Focus on Touchless Procurement & Greener Supply Chain Management?
- Why Should Businesses Focus on Supply Chain Transparency?
- Why is Risk Mapping Critical?
How Can Blockchain Implementation Help Businesses Build Resilient Supply Chains?
While blockchain has historically been associated with cryptocurrencies, supply chain management can widely benefit from its impressive features like enhanced security, decentralized approach, and immutable ledgers.
Not only can blockchain contribute to improving the transparency and traceability in supply chains, but it can also increase a business’s profitability by cutting down administrative costs.
At the same time, blockchain’s enhanced security can help keep consumer data safe. The logic behind this is that Blockchain, after encrypting the data, stores it on separate blocks – which makes it impossible for any third-party entity that’s not related to the supply chain to access the data.
Lastly, as a result of the decentralized nature of blockchain, it’s possible for different supply chains to easily integrate with each other without the need for an intermediary. Alongside this, as a result of all the data being updated on the network in a decentralized manner, companies won’t have to worry about data duplication or redundancy.
Blockchain can truly change the supply chain world forever. Its wide range of features can contribute towards streamlined operations, higher profits, enhanced efficiency, and more.
Image Credit: McKinsey & Company.
How are Businesses Already Using Artificial Intelligence & Machine Learning?
While Artificial Intelligence (AI) and Machine Learning (ML) are revolutionizing almost every industry, leading companies are already using AI and ML for discovering patterns in their supply chain data and fine-tuning their core strategies. Discovering and identifying new patterns can help revolutionize a business – which can be done by deploying AI and ML.
One of the use cases of ML in supply chain management includes being able to predict the future demands for production. Machine learning algorithms are capable of analyzing humongous-sized diverse data sets and identifying the patterns that help them predict future demands. At the same time, some other benefits of machine learning in the supply chain include:
- Reducing freight costs
- Minimizing supplier risk
- Improving supplier delivery performance
- Automated quality inspections
- Streamlining production planning
- Reducing response time Reduction in Forecast errors
Why is it Important For Businesses to Focus on Touchless Procurement & Greener Supply Chain Management?
Over 75% of millennials have reported that they’re more than willing to pay a higher amount for products comprising environment-friendly or sustainable ingredients. These days, we’re witnessing an ever-increasing number of people being concerned about the environment – which is why the demand for environment-friendly is on the rise.
Consumers want businesses to take the initiative toward environmentalism – which is why they are laser-focused on improving their internal processes and changing the way they operate. With consumers being extremely concerned about the environment and switching to eco-friendly products, we’ll witness companies not only focusn on their products but also implement environment-friendly supply chain processes.
Green supply chain management refers to integrating environment-friendly processes into the traditional supply chain. This means – we’ll see companies focusing on processes like product design, manufacturing, and production, material sourcing, and selection.
At the same time, with touchless movement in full swing as a result of the Covid-19 pandemic, we’ll see businesses shifting towards electronic data, helping them reduce error rates as well as rework and locate misplaced data records with ease, gain transparency and control over processes, and more.
When automated, touchless procurement can result in better invoice automation, more on-time payments, invoice-less processing, good PO compliance, and more. Humans will no longer have to be involved in every single activity – thereby eliminating the chances of human errors. This will help your procurement department to focus on other value-added projects or important activities.
Why Should Businesses Focus on Supply Chain Transparency?
These days, increasing government regulations and consumer demand are requiring businesses to gain deeper insights into their supply chain, which is why it’s important for C-level executives and higher-ups to be aware of what exactly is happening at different stages of the supply chain.
Not only does supply chain transparency help build trust between customers, businesses, and suppliers, but it also plays a major role in helping businesses build a positive image and position themselves as trustworthy.
90% of C-level executives claim supply chain transparency has helped them make better and more strategic decisions, including supplier networks.
According to Dinesh Virwani, Joint CEO of Epic Group, “Consumers want to understand where and how the products they are acquiring are made. Add global issues like climate change, the Covid-19 pandemic, and climate imbalance to the picture, which have further accelerated this trend.”
Supply chain transparency can help businesses:
- Increase brand loyalty
- Build better and stronger relationships
- Gain competitive advantage
- Gain investors
- Attract and retain talented individuals
Supply chain transparency is important. It’s one of the most important factors businesses should take into consideration while building a resilient, networked, and collaborative supply chain.
Why is Risk Mapping Critical?
Over the course of the last few years and as a result of events like the Covid-19 pandemic which have caused supply chain disruptions – it has incurred several risks like:
- Overstretched supply chains
- Financial losses
- Increased regulatory scrutiny
- Security vulnerability
This has made businesses realize the importance of risk mapping and resiliency. 77% of businesses in the UK have reported that they are part of supply chains, of which 65% don’t have a fool-proof plan to tackle the disruptions. Risk mapping is the process of assessing the different factors that can result in supply chain disruptions. Risk mapping can help businesses:
- Identify the areas where value is added or lost
- Streamline and speed up the E2E process
- Identify any potential risks ahead of time
- Strengthen the supply chain
- Increase customer satisfaction
- Strategically and smartly respond to unexpected events like the Covid-19 pandemic
- Strategically implement supply chain best practices
- Maintain business operations
While machine learning, greener supply management, and several other factors can help minimize the risks and enforce stability, it’s important for businesses to conduct a thorough analysis and prepare a full-proof risk management plan.
Risk Mapping Example.
Conclusion
One of the primary reasons why supply chains were designed was stability. However, as a result of different factors like the Covid-19 pandemic, the Ukraine-Russia conflict, and climate change, we’ve witnessed a spike in supply chain disruptions.
While top giants like Amazon, Walmart, and others can actively invest millions of dollars in building resilient supply chains, the same isn’t the case with small or medium-sized businesses with limited funding. By incorporating technologies like blockchain, AI & ML, and focusing on transparency, greener management, and risk mapping, businesses can tackle the challenges caused by these disruptions and build a streamlined and smoother process.
Singtel has been at the heart of the digital revolution for years. Headquartered in Singapore, Singtel is Asia’s leading communications technology group offering numerous business solutions, including data hosting, analytics, cybersecurity, smart cities, and countless others. With over 140 years of operating experience, Singtel has been helping businesses tap into innovative technology to digitize and build resilient, networked, and collaborative supply chains.