It was in the year 1982 when during an official interview session being organized by Financial Times, Keith Oliver first came up with the term ‘Supply Chain Management’. Since then, people from various domains have shaped the supply chain management landscape.
Right from the separation of physical distribution and material management in the 1980s to functional integration because of globalization in the 1990s, every change, every new fad, or proliferation has transformed how people perceive, implement and design supply chain management.
However, one of the biggest revolutions in the supply chain realm was yet to come and when concepts like Industry 4.0 and lean management started to unfold all over the globe, we witnessed the introduction of smart supply chain management.
The smart revolution is no more a new kid on the block since it has been imbibed by industries by leaps and bounds. The smart revolution has kept the world enthralled for a long time and therefore, even supply chain management couldn’t be left untouched.
The current market landscape has made supply chain management a real challenge for many businesses. The moment you subdue one challenge, another one pops immediately. It has become crucial for all businesses to overcome quality-related issues by leaps and bounds. But addressing the incident at hand won’t solve the issue as one needs to find its root cause and deter it from happening again.
In such a case, only a smart supply chain management can help, and transforming the existing supply chain system into a smart one isn’t arduous as well. But the main question is what makes supply chain management ‘smart’ and how can it be used? Let’s find out through this blog post.
What is a smart supply chain?
A smart supply chain combines both self-optimization and self-organization. In a smart supply chain management system, the most updated technologies are amalgamated into the existing system to deal with the day-to-day issues related to supply chain network optimization and other aspects of SCM as well.
For example, the data being received from the sensors connected in the factory can be incorporated with the user preference data, data based on weather, and information coming from different variables to find the possible bottlenecks. If a company will be using the power of smart technology for supply chain network optimization, it can predict problems arising due to issues like unexpected weather events.
Is there really a need for smart supply chain management?
Since supply chain management is no more a breeze, coping with the piling challenges related to data and processes is becoming challenging. Companies are under continuous pressure to optimize processes, keep their brand at bay from measurable damages, and reduce outages. This is where a smart supply chain can step in and ameliorate the existing system by harnessing the power of technology and people.
In the current market landscape, only a smart supply chain can ensure the supply of quality products to customers on a continuous basis. With a smart supply chain, the visibility of the product improves since the data is collected through advanced technologies and this data can be further used for better decision making.
Automation of shipping is just one of the many perks of switching to a smart supply chain since right from prediction to seamlessness, there are many benefits to harness.
What are the benefits of smart supply chain management?
Forecasting of possible bottlenecks
One of the best things about smart supply chain management is it’s both self-optimizing and self-organizing. Apart from this, as discussed above, the use of sensors for the connection of data and its matching with individual preferences can help in identifying possible bottlenecks in the system.
Any event that can trigger a possible bottleneck can be found through a smart supply chain and the elimination or rectification of such events can stop the business from further wasting resources, time, and effort on the bottleneck. This also promotes both operational effectiveness and lean management and thus the business can optimize its system without any hurdles.
Predictive analysis
The stockpiling of high-risk replacement parts is not a rare event in many manufacturing units but this doesn’t only occupy space in the factory, it also drains extra money and resources from the factory as well. The only way to deal with this issue is to use the power of smart predictive analysis that comes with smart supply chain management.
With predictive analysis, factories can keep tabs on the current condition of every piece of equipment on the premises. If there is particular equipment in the factory that needs repair or replacement, this information will be quickly transferred to the plant manager without any procrastination.
Improved transparency
Because of the evolving customer expectations and the continuously changing market demand, the need for transparency in supply chain management has become more prevalent than ever. And only a smart supply chain can equip companies with the tools and technologies required to maintain the level of transparency that is in demand.
With a smart supply chain management system, a business can maintain a high level of transparency by using the power of the Internet of Things. This can also help in putting disruption at bay and thus any damage to the company’s reputation can be avoided.
Reduction in downtime
The maintenance schedule is something completely inevitable in almost all the supply chains and it helps in maintaining and repairing all the pieces of equipment that might fall out of line if not addressed on time. Although this is one of the most common strategies used for maintenance all over the world, we can’t say that it is the best strategy to date.
With the help of IoT, the need for preventive maintenance can be shrugged off as with the help of IoT, companies can easily predict when a piece of equipment might need service. There are advanced IoT sensors that are used to keep tabs on the health of every piece of equipment in the factory and these sensors keep on feeding real-time data into the software system. The software then can send alerts to the project managers regarding maintenance.
By using the alter system of the software system, project managers can take precautionary measures before the equipment actually falls off the line, and therefore, the impending downtime can be avoided in a wide array of cases.
Businesses have been trying to ameliorate supply chain management right from its inception and every era has its own demand and requirement. Well, if you look at the current market landscape, digital platform, and customer expectations then smart supply chain management will start looking like a necessity for all the firms.
The successful implementation of smart supply chain management can help businesses subdue a long list of SCM challenges and they don’t have to wait for 5 to 7 years for the implementation of giant technological implementation as small-scale technological changes can also do wonders for many firms.
So, instead of relying on the rusting supply chain management that will be no more relevant in the near future, switch to smart supply chain management and witness the smart movements solving a lot of issues related to SCM.
What are the top trends in smart supply chain management?
Because of Industry 4.0, many new technological solutions have popped up in the market and they are changing the way businesses used to deal with SCM in the traditional form. There is a long list of changes in the form of customer expectations and megatrends that are altering the supply chain management realm.
This is good news for supply chain optimization because the introduction of new technology has catapulted the evolution of supply chain management and soon, we will witness the SCM sitting on the next horizon of evolution. Here are some top smart supply chain management trends that you must keep tabs on:
Growth of rural areas and carbon emission
The growth of rural areas has triggered the flocking of operational wealth into those areas that have never been served in the past. Apart from complying with the traffic regulations because of different types of socioeconomic causes, there is also a need to decrease the emission of carbon and all this has added to the challenges of supply chain management.
Online influx, evolving customer expectations, and personalization
The customer expectation is reaching the next horizon and the online trend has only complimented this growth and shift in terms of customer expectation. All this has catapulted a better service expectation with an amalgamation of robust granualization of orders.
Apart from this, the desire for personalization while shopping has increased and this has led to regular shifts in the SKU portfolio. Even the increased level of transparency and terms like real-time tracking are putting a lot of pressure on the supply chain management realm.
To cope with all these challenges and trends, businesses need to start focusing on supply chain optimization and this is possible only by the introduction of smart supply chain management while using a bespoke approach.