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Supply chain priorities: 3 experts weigh in

Guest Author

By Margaret Harrist, Director of Content Marketing, Oracle

In the last year, supply chain has suddenly become a top strategic concern at the board level in many companies. At Hannover Messe, an annual conference held last week that focuses on industrial transformation, many of the virtual sessions delved into addressing supply chain blind spots and the need to rethink systems and processes to better deal with inevitable disruptions ahead.

How can companies prepare for a future of higher customer expectations and constant threats? Leaders from three supply chain consultancy firms offered guidance about how to parlay a year of global upheaval into effective future strategies.

Make the most of M&As

For businesses in Europe, the combination of the pandemic and Brexit, in addition to catastrophic weather events that have happened around the world, has elevated supply chain to top-of-mind in the C-suite, says Denis Senpere, vice president of Inspirage Europe.

“Before, the star VPs were in finance or research and development,” Senpere says. “Now, supply chain leaders have a much higher profile—and companies understand that supply chain is a strategic asset. Managing the supply chain, making it flexible, and analyzing it at a granular level is necessary, and having more insight into the supply chain can also be a weapon for going after new markets.”

During tough economic times, companies typically might focus on their core business—but during the pandemic, companies in Europe with cash in hand pursued mergers and acquisitions, particularly in the areas of green business and sustainability, he says.

 “But when you do an acquisition, you need to control the operations—and you need to have the infrastructure in place,” he says. For example, Inspirage worked with semiconductor equipment maker Cohu to build an integrated environment across its five business units by deploying Oracle cloud applications for ERP, supply chain, and CPQ (configure, price, quote). Cohu had earlier moved its human resources to Oracle Fusion Cloud HCM. The goal was to unify the company’s operations on common cloud-bases systems and processes and enable the business to scale quickly.

“It’s not enough to have good supply chain software; it has to be integrated into the overall business so, for example, finance can run what-if simulations on a tsunami hitting a key part of the supply chain or a supplier having a compliance issue or the Suez Canal being blocked,” Senpere says.

Focus on resilient supply chains

Many companies have pursued a strategy of lean supply chains over the last  years..  The recent pandemic, global trade relations and climate change have called for shifting the focus towards a more resilient and sustainable supply chain.

Rather than having a myopic view on the cost of ownership and optimization, businesses are now looking at building a more resilient supply chain that incorporate technologies like IoT, blockchain, predictive analytics, artificial intelligence, and machine learning—as well as collaboration between different parties, says Molly Chakraborty, co-founder and president of Trinamix, an Oracle implementation partner focused on supply chain.

“Our customers started focusing more on building an event-driven supply chain,” she says. “For example, we partnered with Oracle and a global HiTech giant to implement a pilot of a Zero-Latency supply chain, which will facilitate our customers to collaborate with external partners like contract manufacturers, suppliers, and customers on a blockchain framework. It is designed to enhance the quality of products and service, reduce reaction time and thereby improve the latency of supply chain.”

Trinamix has also developed Supply Chain Resiliency Control Tower that analyzes data from a company’s ERP and supply chain systems as well as a range of market and external data to identify and mitigate risks. This solution is integrated with Oracle Fusion Cloud SCM so that companies can run simulations and make decisions quickly when disruptions happen.

 “Recent years have manifested vulnerability of supply chain, the way it has evolved over the years. “ Chakraborty says. “Businesses have recognized the importance of automation, focus on quality over profitability, customer-driven product design and decoupling of supply chain in order to prevail and grow. The adoption of latest technology to circumvent challenges caused by disruptions has become more pertinent.”

Refine processes with new tech

“The pandemic exposed a number of existing weaknesses in businesses, particularly in supply chains,” says Jochen Rahm, CTO of PROMATIS software GmbH. “Many companies saw that they needed to digitize supply chain processes to gain better visibility, improve efficiency, and provide customers with the service they now expect.”

Today, customers want to know more than whether an item is in stock; they want insight into the expected date and time of delivery, where the item is en route, and more.

Modern, cloud-based technologies can provide that transparency across the supply chain and throughout a company’s operations. But along with that better insight, companies need business processes and collaboration tools that enable them to quickly take action.

“Companies that view businesses processes as multi-dimensional—incorporating analyses, planning scenarios, relationships with suppliers and customers, and business strategies—will have greater flexibility to adapt to changing market situations even at short notice,” Rahm says.

As artificial intelligence, machine learning, and predictive intelligence capabilities play an increasingly critical role in business operations, companies will need to consistently reexamine and refine their processes, Rahm says.

“Too often, companies try to start from exactly the same processes that they have long used, but the path of transformation is a path of change,” he says.

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