[dropcap]S[/dropcap]upply Chain Management is a complex function, presently at the convergence of technology-led interventions and surging consumer demands. Organizations have realized the need for building agility across their SCM value chain, as they reinvent their processes with new generation disruptions like AI, Blockchain, RPA amongst others. As evinced by my career spanning over 3 decades, SCM varies from company to company in terms of its complexity, multiplicity, and sustainability.
For instance, the traditional companies operate on a typical model of warehouse to either single point or multipoint distribution channels. The larger companies on the other hand evaluate various complexities, clearing, and forwarding, multi-point distribution from one or more warehouses, efficient 3P logistics, robust Inventory management, order fulfillment, etc.
Global supply chains are presently recovering and rebooting from the impact of the pandemic. A McKinsey report suggests that, on average, companies can now expect to see a disruption to their production lines of one to two months, every 3-4 years. This would mean that Organizations must develop a resilient SCM function, digitally enabled and disaster-proof, as much as it can be.
New Generation Supply Chain
This pandemic has undoubtedly caused a huge dent in Manufacturing and Supply Chain Operations but has accelerated opportunities and new horizons in parallel. Several aspects of the extended chain which were considered challenging yesterday are no more pertinent as many Organizations have forayed into unchartered territories giving us hope anew!
[box type=”info” align=”” class=”” width=””]The Industrial Revolution had come to a temporary halt where many projects were put on hold. Several industries were shut, causing fear and anxiety among working Professionals. This resulted in a reduction of Capex and apparent postponing of investments thereby keeping new Projects in abeyance! But we live in a resilient country, well supported by the Industrial revolution happening for the past few years, quick to adapt to changes and shift gears to meet the new norms![/box]
Automation has played a key role during the past several years to hasten the process of Supply Chain Transformation but at the same time, this is fraught with several manmade risks! Many Employees were anxious that machines will replace men but over a period, they have come to a shared understanding of how Automation has helped build several new skills, leading to considerable improvements in testing, quality, and consistency of products. This paved the way for a robust Quality Assurance thereby customer satisfaction which eventually resulted in the healthy Top and Bottomline of several Progressive Organizations which in turn led to the creation of new jobs and additional opportunities!
[box type=”success” align=”” class=”” width=””]But what’s more remarkable is the fact that new generation tools enabled Organizations to drastically increase efficiencies, improve range availability, enhance service levels and thereby ensure order fulfillment! Organizations that invested in such Automation initiatives saw significant improvement in Forecast Accuracies, which resulted in higher capacity utilization. They also achieved a significant reduction in Capex costs which otherwise would have been incurred for building additional capacities.[/box]
Growing customer expectations and serviceability
The coronavirus pandemic has affected thousands of people and has left a sustained impact on the global economy. Businesses are under unparalleled stress of operational viability with unique day-to-day challenges, testing our collective resilience. The ones that are surging ahead are those who are quick to adapt and showcase their agility in battling the crisis. While E-Commerce has evolved taking good advantage of the present-day environment, the consumer expectation for quick and seamless on-time delivery will necessitate companies to collaborate with ecosystem partners more effectively than before despite complicated service level requirements!
Furthermore, wide-ranging omnichannel methods reinforced by customer data to adopt a bespoke experience for consumers have already replaced traditional, isolated channel strategies. The traditional retail channel “Kirana Stores” are also evolving and gearing up to offer ubiquitous and fast delivery across the length and breadth of the value chain. Some day-to-day examples of efficient establishments include precise service offerings, consumer-friendly order portals, seamless order processing, and billing, efficient shipment tracking, advance notification for the arrival of consignment, no-hassle returns, and quick processing of refunds!
Most importantly such efficient service levels go a long way in fulfilling the expectations of today’s consumers especially Millennials and Gen-Z as this generation clearly prefers companies who echo their values and focus on sustainability as one of their key Missions. A study conducted a year ago by Manufacturer’s Alliance for Productivity and Innovation found that around 75% of Organizations are likely to report their environmental, social, and governance (ESG) goals sooner than later as this will strengthen their value systems and make them more connected to the present generation!
The supply chain of tomorrow
The supply chain of tomorrow will be a melting pot of technological disruptions, resilient operations and robust collaboration of people and processes.
Seven defining trends to drive efficiencies in the supply chain of tomorrow are enlisted here
End-to-end digital, connected supply chain will accelerate. The goal of digitization, as stated in a PWC report is a smart, efficient supply chain ecosystem that demolishes silos, creates transparency and enhances responsiveness.
Industry 4.0 enabled business processes will allow enterprises to create a digital thread for the entire supply chain lifecycle.
Cloud, the future of Supply Chain. Cloud-specific spending in the future will grow six times faster than other IT expenditures as per a Mckinsey study.
Incorporating IoT at the core of operations will allow organizations to monitor inventory, automate stock reordering, keep track of real-time deliveries, deliver cost optimization in data collection, monitoring and facilitate quick decision making towards building a more risk-averse organization.
Blockchain has been one of the most steadily increasing global logistics trends through the last few years and will continue to play a big role in the coming years to reshape the Industry
RPA (Robotic Process Automation) redefines Supply chain systems/ processes to make it more reliable. Moving away from the mundane administrative tasks, RPA helps to integrate and automate data-driven tasks, providing the single moment of truth by streamlining error-prone operations.
Sustainable GREEN Supply chain is the future, integrating eco-friendly concept to improve environmental sustainability with different Green practices including green Purchasing, Distribution, and warehousing, Transportation with the usage of biofuels, reducing carbon footprint amongst others.
Interesting and enterprising days are ahead, let’s not lose hope, rather work with renewed vigor and energy by playing a key role towards shaping India – 2.0!
