There is a lot of excitement around use of technology amongst supply chain professionals and specialist media with buzzwords like Artificial Intelligence (AI), Machine Learning (ML), Blockchain and IOT used with a lot of enthusiasm to define the supply chains of future.
The technology is promising the wonderland where all internal and external actors collaborate to better synchronise the supplies; decision making is automated and companies can quickly respond without sacrificing efficiency. A few years from now some of these cutting edge technologies might fizzle out while others become part of the supply chain fabric for large companies with big technology budgets and helping improve their supply chain competitiveness.
But how about mid-market brands, manufacturers, retailers and distributors? A lot of these companies are still managing their supply chain on spreadsheets and migrating from MS Excel to Google Sheets to collaborate on data might be the most they have ever innovated. The transition from spreadsheets to AI, if it happens at all, will not be easy and as such this might further increase the gap in supply chain competitiveness between mid-size and large players.
However, successful adoption of modern technologies in future by any supply chain will depend on getting the basics right today. The foundation to build digital supply chain of future rests on the holy trinity of a) Data centralization; b) Quality transaction platform and c) Integrations. Without this strong foundation an organization’s ability to optimize, automate and collaborate using AI, ML or blockchain will remain limited.
Data Centralization: Ability to quickly retrieve data particularly the masters (SKU, vendor & customer) and transaction data (inbound as well as outbound) in desired formats allow the companies to seamlessly exchange information not only internally across various systems but with external stakeholders as well like customers (large format retail stores, e-commerce market places, etc.) and vendors (manufacturers, transporters, etc.). This can greatly contribute to accuracy, consistency and efficiency.
Transaction Platform: Depending on business requirements, supply chain transaction platform can be a combination of an order management system, warehouse management system and a freight management system to allow digital mirroring of all physical transactions across the value chain. Key requirements from a high quality transaction platform include:
- Ability to recording and assigning accountability for all transactions, howsoever small
- High quality dashboards to monitor the performance and pre-empt problems
- Use cases relevant to business are covered to provide management with accurate view
Integrations: Most companies typically start with a basic accounting system (Tally is what would come to mind for most Indian readers) but as an organisation’s needs and business evolves new IT products like CRM, WMS, etc. are added to the arsenal in addition to a myriad of process flows like returns and deliveries, managed using excel spreadsheets. Keeping inventory and order information consistent across these systems and processes can take significant management bandwidth and resources. The situation is only complicated by need to digitally exchange information with external stakeholders like E-commerce (Amazon, Flipkart, own website, etc.); large format retail customers; shipping companies; etc. Without having a strategy on data exchange across systems and partners any technology implementation will only yield sub-optimal results and will unlikely be able to take advantage of emerging technologies
Traditionally, when supply chain can handle the growth and pressures, management looks at ERP as the solution to address the problem. However, for most mid-size companies ERP deployment is fraught with huge risks and deployment typically fails to address all the challenges. The situation is further complicated by multiple channels, integrations, need to respond quickly and ERP deployment is rarely a complete solution in itself. At Glaucus, we have tried to address the problem by combining a complete technology platform with services which allows us to underwrite the service levels for our clients who can in-turn focus on growing their business with no operations overhead.
To summarise, any mid-size company embarking on modernization of supply chain should ask 3 key questions while evaluating technology decisions:
1. Does this allow me to centralize data such that it can be updated once and used across?
2. Does this improve my transaction platform to mirror my business requirements without compromising efficiency?
3. Does this simplify data exchange between existing as well as future systems and partners?
Technology in supply chain is no longer a disruptor but a hygiene factor. If you are not innovating and investing in future you are simply waiting for a nimbler and more efficient supply chain to eat into your hard-built business. I think Bob Dylan said it the best “If you ain’t busy being born, you are busy dying”. So true!