For a supply chain to truly function well it needs to be flexible, operating under a ‘bend but don’t break’ principle that allows it to scale to needs and to be maneuverable enough to escape blockages and delays along the route. Much like a muscle, however, this is fairly unlikely to simply come naturally. It takes preparation, training, and stretching to build a muscle into something with the capacity and flexibility to go through rigorous moments of endurance or sprinting.
This analogy begins a follow-up report on the Supply Chain USA Virtual Summit 2020 by Alex Hadwick, editor-in-chief for Supply Chains with Reuters Events, which presented the online event in partnership with ABBYY, a digital intelligence company.
Hadwick discovered that numerous experts from across the supply chain space agreed that critical lessons must be learned from the disruption of 2020 as well as broader industry trends.
“Visibility now underpins the capacity of a supply chain to react to change, strengthens its ability to provide strong customer service, and allows more flexible supply chains and the introduction of automation,” Hadwick writes.
“By building a strong and systemic approach to the view over the supply chain then we can begin to train to become more effective in handling the new environment. That environment is changing rapidly and e-commerce growth is causing supply chains to move faster, but they have to balance the demands with sustainability goals, both of which require the right reporting capabilities in order to succeed.”
Interestingly, among the notions presented at the summit was that while the global pandemic ushered in new, strengthened e-commerce normal, the industry is still catching up to global demand.
“Even before COVID, we’ve had significant disruption over the last few years that I think is going to continue to change the way we do business for the future,” mentioned summit participant Robert Sanchez, Chairman & CEO of Ryder System. “It’s the three suspects that you all probably know: e-commerce, driven by Amazon; it’s asset sharing, driven by Uber; and it’s the next generation vehicle – the electric and autonomous vehicle, that is really driven by, I would say, Tesla.”
The silver lining may be that industry players now have their radars up for disruption. The days of, say, a Crown Books pooh-poohing a threat by an upstart like Amazon may be as over as … well, Crown Books.
As Ravi Dosanjh, head of Strategic Programs at Intel said to bring us full circle to Hadwick’s opening: “The muscles we build in supply chains during the numerous disruptions come into play now, and I think it sounds obvious, but you need to enable the right muscle, the right capability at the right time. That’s something that doesn’t happen by accident.”
Ed Barriball, a partner with McKinsey & Company, continued the flex fest by first noting, “You need to bring together a mosaic of data,” from external providers, and from within that is merged “to start to get an idea of who I’m actually buying from, or my suppliers are buying from.
“Once you have all that information, understand where your vulnerabilities and risks are in the supply chain. And for a lot of folks, I think that’s a new muscle to be working.”
Visibility is key
Another area of agreement among the experts, according to Hadwick’s report, was the need to institute real-time visibility in the supply chain.
“I think it’s critical when you think about supply chain visibility technology, that it’s providing visibility across all nodes. That enables network collaboration and exception management,” said Dave Belter, VP & GM of Global Transportation Management, Ryder System.
However, more must be done, added Russell Felker, CTO of GlobalTranz: “I feel like in some ways, we’re at the point that electronic medical record systems or electronic health record systems were at toward the end of the 1990s and into the early 2000s, where they were standing up all these things to capture data, but had no formality of how they talk to each other.
“Both of your doctors might have a way of keeping your data electronically, and they had no way to get it to each other, and so they would print it and fax it. We’re kind of at that point where we have these systems that exist and that capture pieces of information, but they don’t have a clear method of handing information off, maintaining chain of custody, and maintaining that visibility [and] the sanctity of the information, as it traverses.”
That is why Belter finds it critical that supply chain visibility technology must be provided “across all nodes. That enables network collaboration and exception management.”
Taking a hard look at your entire move through the supply chain will uncover areas for improvement—and ultimately greater market share, according to the experts.
“Where we see a significant demand is around what’s called process mining and discovery, where you actually analyze event logs from various disparate systems of record and visualize process behaviors as they occur,” said Andrew Pery, a process intelligence expert at ABBYY.
Such examinations can help you identify areas where, for instance, more automation would be beneficial or risks and potential legal entanglements can be avoided, Pery noted.
Which brings us to the last mile
“The last mile is the most complex piece of the puzzle in the supply chain—because it’s the end part, everything has to work upstream for that delivery to go perfect,” said summit participant Erik Caldwell, president of the Last Mile at XPO Logistics.
One thing that is becoming obvious, according to Tom Galluzzo, founder, and CEO of IAM Robotics, is that there will not be enough flesh-and-blood workers to maintain a flawless last-mile experience.
“The reality is that it’s going to continue to evolve toward more automation, more force multipliers being used,” Galluzzo says in the summit follow-up report. “Whether that’s warehouse execution systems continuing to get smarter and optimizing the way internal operations are run within supply chain buildings, or actually leveraging robotics to do some of the physical moving material, that’s all going to continue pretty strongly over the next five to 10 years.”
Please sustain me
Hadwick goes on to cover sustainability in the supply chain, which, given the pressures of last-mile, micro-fulfillment, and a customer base that seems to expect goods ordered today yesterday, one helluva challenge.
Among the ideas presented at the summit that could offer a solution is moving supply chain facilities closer to the customers. As Michael Murphy, executive vice president of Development at industrial real estate developer CenterPoint pointed out, the giant e-commerce facilities are less often feeding stores directly and more often shipping goods to smaller distribution outlets.
“Moving the supply chain closer to the consumer is a huge priority right now for a lot of organizations,” noted IAM Robotics’ Galluzzo.
In conclusion …
Pery, the process intelligence expert at ABBYY, contributes the summit follow-up’s conclusion: “It’s evident no matter which stage of the supply chain logistics providers serve, having good process workflow and visibility into the specific events, activities, and people involved with each step is critical to successfully completing the last mile and delivering a positive customer experience.”
He and Hadwick before him take deeper dives into each of the sections presented above. If you would like to read their full report (for free!), visit https://1.reutersevents.com/LP=29531.