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Why COVID-19 is a Galvanizing Moment for Eliminating Physical and Digital Supply Chain Risk

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Why COVID-19 is a Galvanizing Moment for Eliminating Physical and Digital Supply Chain Risk

When the COVID-19 pandemic began, the resulting economic fallout was felt across borders and industry alike. From manufacturing to financial services, every industry has been scrambling to minimize the impact of the pandemic on the bottom line. For many businesses, this has helped serve as an urgent wake-up call to take proactive steps to identify and eliminate risk across their global supply chains, which typically span several tiers of suppliers dispersed across the world. Real-time supply chain risk visibility plays a critical role in avoiding business disruptions.

The Economic Risk

There is an immense economic risk that needs to be considered when a business operates a global supply chain. At the start of the pandemic, we witnessed the inevitable ripple effects across not just multiple industries but also across multiple different tiers of suppliers. For example, 3.74% of sub-tier suppliers in the Department of Defense’s ecosystem closed as a result of the pandemic. 75% of small businesses have reported that they have only enough cash in hand for 2 months or less. As suppliers struggle or go out of business, significant supply chain disruptions are common.

This instability coupled with the multitude of other economic crises facing the world, such as ongoing trade friction with China, could precipitate a fundamental collapse of global business as we know it. We must monitor our supply chains for more points of exposure to risks than ever before.

The Data Security Risk

With computer hacking having increased 330% since the start of the pandemic, global businesses also need to account for the cybersecurity risks involved with having a supply chain across multiple countries and potentially hundreds or thousands of suppliers. The data systems of global suppliers are a potential entry point to a brand’s or government agency’s data systems, presenting a major challenge across the global supply chain. Organizations must be able to assess and continuously monitor the strength of supplier data security measures and the changing cybersecurity-related risk associated with their suppliers.

Even after the pandemic subsides, the need for real-time risk monitoring in the extended digital supply chain will persist, especially as cybersecurity attacks grow in sophistication.

New Technology for Physical and Digital Supply Chain Risk Management

When it comes to monitoring risk associated with multiple tiers of suppliers, the majority of businesses are still way behind. According to Gartner, only 27% of companies perform ongoing third-party monitoring and only 2% directly monitor their 4th and 5th party suppliers. Although companies know they’re vulnerable to disruption by a sub-tier supplier, not enough are being directed or given the tools to actively monitor them effectively.

Historically, the majority of businesses attempt to identify, assess and manage supply chain risk manually and only periodically. This is because, previously, automation technology focused on making sense of large amounts of extended supply chain ecosystem data has not been up to the task. Much has changed. The global machine learning market was valued at just $1.58B in 2017 and is now expected to reach $20.83B in 2024, growing at a CAGR of 44.06%. New AI and machine learning-based technology is emerging rapidly and changing the game. This new technology can immediately illuminate risks across all tiers of a global supply chain because data on tens of millions of suppliers is continuously monitored from both a physical and digital supply chain perspective and across numerous risk factors.

Incorporating AI-powered solutions into your supply chain risk management strategy can automate the identification of risks that exist deep within a supply chain. In addition, adopting this technology ensures that an organization has continuous, real-time information to inform ongoing risk management efforts and identify problems before they threaten the business.

There is no way to know when the pandemic and its resulting implications will cease. Or when and where the next global event will happen. Looking ahead, successful businesses will be ready to continue functioning in a safe and secure way regardless of what issues they face. Supply chain-related blind spots and resulting disruptions can pose major complications for organizations that aren’t able to effectively identify and map risk. COVID-19 has driven a greater sense of urgency to shore up these problems. New technology for automated, continuous monitoring of supply chains end-to-end presents a new path toward operational resilience, business continuity, and overall health.

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Jennifer Bisceglie is the CEO of Interos, the first and only business relationship intelligence platform to protect enterprise ecosystems from financial, operations, governance, geographic, and cyber risk in every tier of enterprise supply chains, continuously.

Microsoft

Microsoft and C.H. Robinson Form Alliance for the Future of the Digital Supply Chain

As technology continues to adapt, so does the supply chain. These challenges require solutions rooted in innovative technology, further emphasizing the need for logistics and real-time data on a global scale. According to a recent report by McKinsey & Company, companies’ success will be driven by their ability to navigate the current volatile business environment, which means they must rely on an innovative and tech-driven supply chain. As we drive the future of technology in the industry, providing a continuous competitive advantage to our customers is vital.

That’s why we are excited about our alliance with Microsoft. To meet evolving supply chain demands, we are pioneering the supply chain of the future by joining forces with Microsoft – pairing the power of our industry-leading technologies C.H. Robinson’s Navisphere® and Microsoft Azure. This builds upon TMC, a division of C.H. Robinson’s successful implementation of Navisphere, its global multimodal transportation management system, across Microsoft’s global supply chain, giving Microsoft industry-leading reliability, efficiency, and real-time visibility to all inventory, at rest or in motion, anywhere in the world.

Partnering with other best-in-class companies and products brings value to our customers and carriers as we continuously look to enhance our technology built by and for supply chain experts. Through Microsoft’s Azure cloud platform, we gain unlimited scalability, premier data security, and increased application speed, further demonstrating our commitment to technology-driven efficiencies and providing real results that impact the tech-forward supply chain for our customers and carriers.

Together, our technology helps address the changing demands of ever-evolving global supply chains. For example, as part of this collaboration, we are also integrating IoT device monitoring that measures temperature, shock, tilt, humidity, light, and pressure in shipments. This integration enables 100% real-time visibility to shipments as they move from the factory to distribution centers and ultimately to millions of customers.

We are always committed to creating efficiencies that provide unique solutions to the supply chain. Adapting in real-time to supply chain demands and providing our customers and carriers with innovative solutions, while harnessing the trajectory of technology, is key to staying ahead in the ever-evolving supply chain. Our alliance with Microsoft accomplishes exactly that.

As the pace of change in the industry remains at a pivotal moment, our unmatched commitment to tech-forward solutions and continued investment in technology to better serve customers remains a competitive advantage all of our customers can count on. Learn more and connect with an expert.

supply

Overcoming Obstacles in 2020 to Optimize the Digital Supply Chain

The logistics and supply chain market is transforming quickly. For the stakeholders involved, managing multiple partners, high customer expectations, siloed IT systems and dynamic conditions is a challenge. I recently shared my predictions for the supply chain and logistics industry and what global and domestic businesses can do to prepare for success in the new year. But, exactly how can businesses prepare for and confront some of the biggest barriers in 2020?

Transportation capacity constraints lead to inflated prices and significant waste.

In the supply chain, the saying “time is money” is particularly meaningful. Digital freight forwarder, Zencargo, analyzed more than 100 shipments from across the UK and found that more than 100 million hours are wasted per year in procurement, supplier management and freight-administration functions, for a total annual cost of nearly $2 billion.

With the state of capacity constraints, the transportation industry is a key contributor to the waste and inflated prices in logistics and supply chain processes. In the United States alone, 15 to 25 percent of trucks on the road are empty — and for non-empty miles, trailers are 36 percent underutilized. The Environmental Defense Fund (EDF) advises that capturing just half of this underutilized capacity would cut freight truck emissions by 100 million tons per year and reduce expenditures on diesel fuel by more than $30 billion a year. According to EDF, the movement of goods currently accounts for nine percent of U.S. greenhouse gas emissions, which is nearly 500 million metric tons annually in direct emissions.

On top of that, due to the fuel emissions produced by this sector it is responsible for an additional 100 million tons of climate pollution each year. Globally, trucks are the largest source of freight emissions (57 percent), and the emissions resulting from transportation vehicles and logistics operations contribute significantly to air pollution and unhealthy air quality.

With advanced technology-driven solutions, organizations have the ability to reduce waste and capacity constraints. By leveraging artificial intelligence and GPS devices to optimize shipping routes on an international, national and local scale, companies can decrease the distance and time involved in shipping products. In addition to optimizing planned routes, advanced analytics can also be utilized to take account of congestion and update routes in real-time. Through the use of technology, companies of all sizes can reduce carbon emissions and drive sustainability across the supply chain.

Looking ahead, I believe we will continue to see a concerted effort to reduce waste in the supply chain. We need to. The potential of an orchestrated, collaborative supply chain that addresses environmental and social challenges is profound. It is the responsibility of the industry to make the movement of goods sustainable. Across industries, leading with purpose, ethics and social responsibility is a model that resonates with businesses — including employees, partners, stakeholders, as well as with customers.

In fact, today’s consumers expect companies to meet a certain set of ethical standards to gain their buy-in. Companies that don’t address sustainability issues are at risk of losing business. Eliminating the empty miles and excess CO2 emissions will become a bigger focus for smaller companies as larger organizations use sustainability initiatives and ethical standards as criteria when selecting supply chain partners. Prepare for tomorrow, today by maximizing capacity and minimizing empty miles.

Increasing customer demands and faster delivery expectations

Due to rising customer demands and unprecedented expectations for product availability and expedited delivery, companies’ transportation spend is skyrocketing — and will continue to accelerate. Thanks to a culture of instant gratification, customers want what they want, where and when they want it — and that means they want it immediately. According to findings from Dropoff, 69 percent of consumers would not purchase from a retailer again if their delivery was late. Keeping up with the high customer demand brought on by events like Cyber Monday can be challenging for companies and especially exhausting resource-wise. However, this elevated pressure offers an opportunity to optimize and reduce costs.

In 2019, holiday retail sales grew 4.1 percent over the same period in 2018 to $730.2 billion, NRF reported. Online shopping sales during the winter holiday season increased 14.6% in 2019, accounting for $167.8 billion of the total. Given the high-demand of the holiday season, companies in 2020 should look to implement technologies, such as dynamic mapping, to ensure products are delivered efficiently and on-time to their final destinations.

With dynamic mapping, retailers can gain real-time visibility into their products, receiving exception alerts and recommendations, including dynamic predictive ETA. In addition, use of solutions like dynamic mapping provides real-time analysis, based on data from inside and outside their network, delivering the most accurate dynamic visibility available.

Digital Supply Chain 2020

In this increasingly complex industry, the supply chain will never be immune to disruptions — some things are simply unpredictable. But moving forward in 2020, one thing is certain: the ability to rapidly innovate and adapt will be vital for companies in the supply chain ecosystem. To effectively manage expectations and strategize for the year ahead, businesses should take a proactive approach to addressing any obstacles in their path and face challenges head on. Prioritizing sustainability as a strategic initiative is imperative for all businesses, across industries. Companies should equip themselves with the talent, tools and resources to navigate disruptions and deliver real results in 2020 and beyond.