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Emerging tech is starting to clear the haze in tangled supply and customer networks, delivering key solutions to visibility woes.
Three questions to ask
- How are AI and advanced analytics addressing the challenges of supply chain visibility and transforming traditional supply chain models?
- What key components drive end-to-end supply chain visibility and boost decision-making and efficiency?
- How do strategic partnerships and AI integration improve supply chain resilience and transparency?
Supply chains are the backbone of modern businesses, connecting suppliers, manufacturers, distributors and retailers in a complex web of transactions. Managing these supply chains is no walk in the park, and a significant change is currently underway. A major supply chain reset is unfolding due to widespread disruptions in manufacturing, shipping and distribution caused by inflationary pressures; supply uncertainty; and various geopolitical, economic, and environmental, social and governance (ESG) challenges.
In a shift that extends beyond merely tinkering with the edges of supply chains to transform entire business models, organizations have been forced to rethink their approaches. This is triggering the mass desertion of rigid and linear systems — many of which have been plagued by poor visibility that makes the response to issues challenging — in favor of agile, multidimensional ecosystems.
The global challenges listed previously have highlighted the need for better supply chain visibility in various industries. And in EY research, limited visibility and transparency across supply chain functions is the top challenge for supply chain leaders. In fact, supply chain visibility has been the top challenge noted by EY supply chain survey respondents since 2020, especially during the pandemic.
One potential approach is creating networked ecosystems to address the visibility problem. And artificial intelligence (AI) and advanced analytics can certainly help.
AI as an enabler of visibility
AI-powered technologies and advanced analytics are playing an ever-increasing role in reducing opacity and other complications in today’s supply chains.
It is certainly worth a look at some fresh perspectives on the growing importance of visibility in supply chain management and how organizations can fully exploit the potential of AI and data to realize better transparency.
The right tech and expertise
In a 2023 article, my colleagues Matthew Burton and Joos Vreeswijk suggest that human operators need the right cognitive decision support capabilities to gain visibility and control — to improve quality and speed of decision-making.1
And they’re right, but what do “the right capabilities” look like?
It’s crucial that the support offered by a tech solution — and the control this enables — is end to end. If supply chain leaders hope to drive growth, reduce cost and build resilience in a meaningful way, both now and in the future, a solution that spans the entire system and requires no supporting software is nonnegotiable.
What about the “human operators” themselves? End-to-end visibility and control are just two ingredients in the recipe for success. Without the necessary expertise in data analysis, any solution is likely to deliver results peppered with snags.
Burton and Vreeswijk mention the need for trusted strategic partnerships and improved communication with suppliers and manufacturers, both of which — as an aside — can benefit from the deployment of AI tools. Take, for example, generative AI systems. With these, businesses can accelerate communication and information exchange, reducing the time and effort required for manual coordination.
However, the tech industry is afflicted by a skills gap, and some organizations simply don’t have the technology infrastructure in place to capture and analyze data across the supply chain. Moreover, many firms still use legacy systems that are ill-equipped to provide end-to-end visibility.
For these reasons, companies should consider strategic partnerships beyond those with suppliers and manufacturers. There’s a great deal of value in collaborating with the providers of tech solutions designed to transform the supply chain. Think of it this way, your company’s data, plus an advanced AI-powered product that offers real-time data analysis, plus the right capability expertise can equal a winning solution. That solution can empower supply chain leaders to identify and evaluate business constraints and uncertainties, thus facilitating more informed strategic and operational decisions.
More granular insights
AI leads to more granular insights into the supply chain. For example, Burton and Vreeswijk say that the ability to map and track suppliers, facilities and products down to raw materials will improve traceability and allow analysis of supplier compliance.
Indeed, it will. AI-powered technologies can analyze data from supplier surveys, audit reports and other sources, permitting the quick detection and resolution of issues, including supplier fraud and environmental or labor violations, which can be almost impossible to spot manually. This affords companies greater selectivity when choosing suppliers and makes it easier to spot bottlenecks in the supply chain, optimize logistics and reduce lead times.
Burton and Vreeswijk also mention that transparency helps notify consumers, regulators and investors that products are on their way and that sourcing is sustainable, as well as helping avoid compliance fines and enhancing brand and corporate reputation.
Again, it does just that. Firms can use AI-powered tech to collect and analyze data from sensors and other Internet of Things (IoT) devices to monitor environmental factors such as air and water quality, which enables better environmental performance.
Or companies can leverage AI to maintain a record of all transactions in the supply chain — a record that is not only transparent but also centralized and auditable. The outcome is enhanced accountability and a lower risk of legal or ethical breaches that could lead to fines or reputational damage, in addition to the creation of a reliable and verifiable record for stakeholders and regulators.
Beyond the horizon
The challenge of supply chain visibility is a critical one facing businesses today. Without a clear view of their systems, organizations are likely to face a broad range of problems, from increased costs and delays to lost customers and reputational damage.
That said, most firms are now waking up to the fact that, with the right data, the right technologies and the right partnerships, they can achieve end-to-end visibility and make more informed decisions that help them manage cost, reduce risk, accelerate growth and stay ahead of the curve.
By investing in solutions powered by AI and advanced analytics, businesses can build agile, resilient and sustainable supply chains to drive transformational outcomes that position them for success in what has become an increasingly competitive global marketplace.
Are you ready to move beyond the horizon?
Summary
Modern supply chains are evolving into transparent, multidimensional systems enhanced by AI and data analytics. This transformation is driven by the need for better visibility amid such challenges as inflation, supply uncertainty and geopolitical issues. Enhanced supply chain visibility enables real-time tracking and informed decision-making, which is crucial for managing costs, reducing risks and fostering growth. AI and analytics are key to achieving this visibility, providing granular insights and improving transparency, which in turn supports resilience and sustainability in a competitive global market.