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How to use smart technology to support a resilient supply chain


The latest technology allows companies to anticipate unexpected circumstances and develop a resilient supply chain.


In brief

  • Because of frequent disruption, companies benefit from a flexible organization of their supply, production and distribution chains.
  • With the latest technology, you can anticipate unexpected circumstances and develop a resilient supply chain.
  • A resilient supply chain is characterized by transparency, flexibility, collaboration and safety.

Global tensions are disrupting the economy and are putting pressure on the logistics chain, which can cause raw material problems. In such a volatile economic environment, an entire network of partners can be disrupted. More than ever, it is important for a company to manage its supply, production and distribution chain in a non-rigid and linear manner.

We no longer live in a society that only produces locally. Primarily to save costs, Western organizations moved their factories abroad and rely on them for the supply of raw materials. For example, textile companies produced mainly in low-wage Asian countries for a long time. But costs aren't everything. You must also be able to meet the demand and expected service of your customers on time.

Technology has become indispensable in developing a resilient supply chain. This resilient supply chain is characterized by transparency, flexibility and collaboration. In addition, all information sharing within the network must be done in a secure manner.
 

Transparency

If you want to make well-considered decisions, spot opportunities and manage your risks at the same time, you need to know where you stand. To do this, you must initially have the correct data in your network. This data comes not only from your own database but also from those of suppliers, customers and even social media.

There are companies that focus on collecting data, so-called data brokers. A well-known example is the sustainability databases, which store financial and sustainability information of companies. This data can further be used for risk analyses on, for example, possible customer default or the supply of critical raw materials from suppliers.

By capturing data from your company and your partner network, you can model a virtual replica of your supply chain. With such a digital replica - also known as a digital supply chain twin - you can test different what-if scenarios and understand the impact of certain decisions or disruptions on the supply chain. For example, when a production location is out of service for several weeks due to unforeseen circumstances, a digital twin can compare different alternative scenarios in terms of cost, service, feasibility, etc. This allows you to make quick, but informed decisions to deal with disruptions.

Smart technology is only sustainable if it meets a concrete need and should also be supported by the entire organization and, by extension, the network.

Flexibility

To meet customer demand in complex circumstances, you need a flexible supply chain that can respond quickly to disruptions. Not being dependent on a single supplier of critical components in your network, but purchasing the same product from multiple suppliers limits supply risks. It is also useful to have real-time data on your own stocks, those of your suppliers, and the stock of your customers.

With the necessary technology - such as machine learning and algorithms - you can anticipate changes to get your products delivered quickly and cost-efficiently. The algorithm can, for example, decide to skip a step in the chain to guarantee the correct service.
 

Data and collaboration

Close cooperation between all business partners in the business network also contributes to greater resilience of the supply chain. By continuously sharing data and entering into consultation, unforeseen circumstances can be anticipated more quickly.

It is important to look beyond the direct partners and map the entire chain. A problem in the chain (e.g. stock shortages, production stoppages, etc.) can have consequences for several links in the network. The faster the information is shared with the network, the faster an appropriate solution can be devised to respond to the risks.

With regular stress tests you can proactively identify weaknesses in the supply chain and take measures to manage the risks.

Safety

A resilient supply chain must of course be reliable and safe. It starts with secure communication on the company network and robust security when you exchange data with external parties. This is where the aspect of cybersecurity comes into play. And with regular stress tests you can proactively identify weaknesses in the supply chain and take measures to manage the risks. 

Where to start

Technology plays a crucial role in developing a resilient supply chain, although you should not use technology for technology's sake. What works for one organization might be meaningless for another. Smart technology is only sustainable if it meets a concrete need and should also be supported by the entire organization and, by extension, the network.

It is useful to learn from others and especially to link your internal strengths to the insights of external people. By brainstorming frequently with the team and partner network about possible disruptions and risks, you can take targeted measures and define action plans. In addition, conducting a stress test can reveal pain points in the resilience and effectiveness of the action plans.

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    Summary

    The resilience of the supply chain management is crucial for any company that wants to cope with the uncertain consequences of global tensions. Smart technology allows companies to anticipate unexpected circumstances and develop a resilient supply chain. This resilient supply chain is characterized by transparency, flexibility and collaboration. Safety and reliability are crucial elements, and regular stress tests can help identify weaknesses and manage risks.

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