Economic uncertainty breeds hesitancy, but those in supply chain world who invest in new tech will win:
Logistics and supply chain leaders would agree that their industry is facing many pressures. Two of the most significant being the changing needs of customers and a turbulent economic environment – in the UK and around the world. Here, I’d like to look deeper at some of the issues, and how new and emerging technologies can be used to respond to these challenges.
The global supply chain context
The global slowdown – impacted by the US/China trade war, a rise in protectionism and concerns about the potential of another recession – has huge implications for supply chain. And these factors, plus Brexit, have created a significant culture of hesitancy. So much about the future is uncertain, and this absence of clarity has seen many businesses reluctant to take risks or make investments.
While this is understandable, a recurring theme amongst the supply chain and logistics leaders at a recent event I attended was very much that uncertainty is here to stay. The only status quo is that things will keep changing.
Not time for inaction
For businesses, this means that inaction cannot be an option. You cannot control everything outside your organization, and the longer that there is a resistance to capital investments, the more time markets have to shift, and competitors to advance. If your own business ends up too far behind and unable to adapt, that indecision to innovate or digitise could cost you dear. There is a reason that the life expectancy of a Fortune 500 company has dropped from 50 years to 12 in the last 50 years – many have simply lacked the agility to keep up and change in a new, customer-centric world.
In today’s experience economy, an impressive website, competitively priced goods and speedy delivery are now pretty much an expectation. The competitive edge now comes from the ability to deliver great, personalized experiences and unsurpassed convenience.
For starters, customers now are demanding real-time, granular visibility for their deliveries. Increasingly, they also want to know that these products have been procured ethically, and that the carbon impact has been minimized, both in sourcing and in transit. Considering that supply chain is often something that most consumers think little about, many things they now value connect closely to it.
Key supply chain priorities and challenges
Even without the customer in mind, supply chain needs to have a number of fundamentals in place. The flexibility to respond to external changes might be an obvious thing to say, but when supply chain is exposed to everything from trade friction to Brexit to extreme weather, the agility to respond and continue to fulfill orders is as important as ever. But now, of course, that means the ability to do so through an increasing number of channels.
In the same way, businesses are continually striving to be more efficient and save costs. And these days, this could mean an increased use of automation (to compensate for a shortage of human resources), being more collaborative with other tiers of the supply chain (after all, many of their problems could well end up your problem too), and rethinking your approach to your physical estate (for example, turning bricks and mortar stores into fulfillment centers).
Making the best use of emerging tech
But, as I mentioned earlier, they must also not be afraid to invest – because those who do not continually innovate risk irrelevance. This means having the right technology to keep up, the ability to make better use of data, and be ready to extend their capabilities with emerging technologies and applications.
For example, this could mean being able to interrogate data using natural speech technology. It could mean using augmented reality to make smartphone-equipped warehouse workers more efficient. Or, applying machine learning algorithms to historical data in order to predict lead times, or even offer predictive fulfillment.
Also, it could mean making use of blockchain. This is a technology that is already being put to great use for multi-tier visibility, to track and trace products, and accurately record chain of custody and provenance in an immutable distributed ledger.
I doubt anyone would argue that the economic situation is unsettled, but I would say that businesses not only have to be able to ride the storm, but be brave enough to push forward through it. Because many won’t be waiting until the skies are clear to take advantage.
Opportunities to learn more
Finally, I’d like to take the opportunity to thank all the logistics and supply chain leaders and managers who attended the recent Think Big! Digital Logistics event in London, where we discussed a lot of the aforementioned topics. The forthcoming Oracle Open World Series of Events in London, 12-13 February, will be another good occasion to hear more on new technology opportunities – you can register here (https://www.oracle.com/uk/openworld/
In the meantime, if you’d like to read more about our approach to supply chain, you can dig a little deeper here: (https://www.oracle.com/applications/supply-chain-management/). Interested to hear more? Join the webinar on Enabling the Lean Enterprise with Mecalac, a global manufacturer, on Feb 25th. Click here to register.