Technology Helps Supply Chain Embrace Uncertainty
Uncertainty has been supply chain’s most formidable foe, taking the shape of events like port strikes, natural disasters, volatile customer demand, political changes and fluctuations in currencies and global commodities. The most thoroughly developed risk mitigation plans cannot predict every surprise. Companies must move forward embracing this uncertainty, and the right technology is paramount.
There is a long list of information technology that can help manage uncertainties and their inherent risks: cloud computing, smart devices, big data analytics and logistics tracking, to name a few. These technologies can be applied in strategies that help supply chains embrace uncertainty, including enabling consistent collaboration with customers, improving the capture and sharing of information across the value chain and proactively minimizing customer disruption. Doing so will create an agile, flexible supply chain that will earn customer loyalty.
Enabling Consistent Collaboration with Customers
Customers are the center of the universe for businesses and good technology can help nurture customer relationships by providing an understanding of their needs.
Enterprise applications, internet technology, cloud computing and data management tools now allow companies to setup single-instance enterprise applications that support global operations. Work that was previously completed by distributed business units in multiple, disparate locations, using different business systems, can be consolidated onto standard processes and applications. Consolidation and standardization lead to consistent service and improved reliability. Work can also be cost effectively managed in shared service centers used across business lines and geographies.
For example, central order management centers in Asia or Eastern Europe can manage order entry and cash collections as well as coordinate distribution activity for customers spread around the world. The same is true for sourcing, demand and supply planning and logistics, where operations can be centralized into shared service models leveraging a global single instance application. A t Lexmark International, over 80 percent of order management, planning and sourcing workforce reside in shared service centers, using a single instance of SAP supporting over 100 countries.
Internally, these global enterprise applications enable the supply chain team to work cross-functionally with sales teams, who are managing close relationships with customers. Supply chain teams connect to, access and interpret data in an enterprise customer relationship management system, such as Salesforce. These tools integrate sales, planning and supply chain activity immediately. Early visibility to sales orders and trends can be critical in analyzing and predicting order patterns, special configurations and delivery expectations.
Capturing and Sharing Information across the Value Chain
To fully benefit from this technology, it is important to collaborate and configure enterprise systems to share information inside and outside of the company. A single global instance of enterprise applications greatly speeds up the sharing of data by minimizing the human resource of consolidating, searching or moving the basic structured information of the supply chain. With tools governing data management, the applications become the core data source for analytic systems and better support the control tower operations employed by global supply chains.
However, the global supply chain team also relies on much data that is not captured in these structured enterprise applications. It is estimated that up to 80 percent of information used by companies is unstructured and found scattered across the enterprise in as the form of emails, spreadsheets, hardcopy paper documents or photos.
While Electronic Data Interchange (EDI) is in widespread use, as many as 50 percent of sales orders and invoices arrive as PDF files, emails images and spreadsheets, which are delivered in various languages, currencies and formats. Traditionally, they required someone to read, understand and manually input the data into a business application. Today’s technology, such as Perceptive Capture, allows orders to be digitally scanned with automatic information extraction and validation with an automatic push into the enterprise system. This technology delivers the benefit of order acknowledgement to a customer in minutes instead of days.
Mobile technology is also proving beneficial to supply chain. Critical logistics documents, such as signed bills of lading and proofs of delivery can be captured with mobile devices and sent to the shipper, customer and supplier management systems, almost immediately. This reduces printing, physical storage and retrieval of documents. It also keeps shippers from the lag time of waiting for a carrier to bring back hardcopy documentation that has to be scanned and archived before providing information to their customer, or paying the carrier.
Customer Insights Through Technology
In addition to driving consistent process management and automating the capture of unstructured data, technology helps shift employee focus from rote data entry to analytics and decision making, allowing them to serve the customer in a more meaningful way.
Taking burdensome tasks off employees is a value that the Internet of Things delivers. The connectivity of smart devices means supply chain actions can be automated prior to the customer experiencing any disruption. Employees no longer have to stop and trigger the action themselves. At Lexmark, smart MFPs communicate directly to supply chain systems to trigger a replacement shipment of cartridges, based on the device’s monitoring of usage and toner level. Capturing this data automatically eliminates customer disruption as well as the time and effort required to create, approve, and receive purchase orders.
Data analytics represent powerful systems, capable of managing these growing sets of data. These tools allow employees to leverage insights for customers, such as demand trends, lead times and variability. Supply chains become more predictive and agile instead of reactive.
Key technology benefits for supply chain include:
• Consolidation and centralization of a global, single enterprise application, focused on customer needs and collaboration
• Automated capture of unstructured data, whether from mobile devices, smart devices, or other sources
• Organization of the global enterprise by consolidating disparate functions and standardizing processes
• Connecting and sharing information across the supply chain
• Developing analytic tools that shift focus to proactive analysis and continuous improvement
Some uncertainty will always be present, making supply chain the dynamic field that those who live and breathe it thrive on. The right technology can turn that uncertainty into a competitive advantage.