Supply chain transparency is vital in today’s interconnected marketplace. Gaps in transparency can increase your exposure to risk on multiple levels, from product failure and product recalls to a sudden breakdown of brand trust.
Not surprisingly, full supply chain visibility has risen from the sixth most important strategic priority in 2015 to third in 20171. As part of this effort, manufacturers, suppliers and retailers are actively investigating technologies that can support their efforts to create a more transparent, sustainable supply chain.
While technology plays an important role in reshaping supply chain management, today’s digital era requires more than operational tweaks. Businesses need tools and capabilities that can have a transformative impact on supply chain sustainability and performance, including:
- Systems and processes to acquire, manage and extract actionable insights across multiple lines simultaneously
- Methods to securely share data between suppliers and third parties
- The ability to control and manage disparate data from offline processes and multi-tiered suppliers
- Enterprise-wide data analysis and collaboration tools to replace isolated functions and processes
Consumer-driven digital platforms like social media, mobile networks and e-commerce are all empowering consumers to become more discerning in their buying decisions. Fortunately, these same leading-edge technologies are also helping to transform traditional supply chain networks into modern digital systems that enable broad visibility, wider collaboration, improved efficiency and faster response times.
Delivering answers to pressing needs
A number of game-changing technologies are helping to reshape daily supply chain processes, drive efficiencies and improve corporate social responsibility performance for organizations across industry sectors. Some of the more prominent examples include:
- Cloud computing. Cloud computing capabilities have transformed collaboration and project management across business functions, and the addition of cloud services for supply chain management is an important next step. Cloud-based computing applications are making advanced warehouse, shipping and resource management systems available to businesses that previously could never afford the substantial investment required to discretely procure the same software—helping to remove a long-time barrier for small- and medium-sized businesses. Cloud services can help remove physical limits on information access, leading to better communication, improved decision making, and more timely supply chain analysis.
- Big data analytics. Within big data is a wealth of unstructured information—social media data, audio files, email messages—that offer deep insights into brand reputation and supply network performance. These insights are helping to empower more informed decision making. Virtual “what-if” simulations allow supply chain teams to better understand the implications of different scenarios, such as unexpected changes in inventory levels and sudden spikes in demand. As the entire value chain becomes more transparent, businesses are using this information to improve service, reduce costs, mitigate risks and maximize return on investment.
- Internet of Things (IoT). The IoT is poised to transform the supply chain with both performance efficiencies and new revenue opportunities made available through increasing levels of business transparency. With the emergence of IoT, machines and devices are network-connected and cloud-enabled, continuously communicating essential performance data to central business systems where it can be analyzed and transformed into actionable insights. Actual decisions are still performed by humans, but supply chain professionals leveraging the capabilities of IoT can make faster, more informed decisions based on real-time data.
- Blockchain. The unchangeable and decentralized nature of blockchain makes this virtual ledger a natural fit for the supply chain. Each time a product sold or exchanged, the transaction could be recorded, creating a documented record of a product, from production to final delivery. This meticulous tracking could substantially reduce time to market delays, extra expenses, and human mistakes that impact transactions today. Blockchain offers the ability to ensure a more ethical supply chain by enabling better tracking of parts and materials as they travel along the value chain. Though it is a developing technology, blockchain has the core attributes needed to accelerate supply chain digitization by safeguarding transactions, assuring traceability and chain of records, and bolstering cybersecurity.
- Artificial Intelligence. This pioneering technology is poised to reshape the future of supply chain sustainability and performance. Artificial intelligence (AI) utilizes deep learning to analyze vast amounts of data extracted from diverse sources to provide critical insights that empower more informed decision making. For example, a retailer can use AI to analyze sales to determine which products are popular and which ones are sluggish, allowing it to better allocate resources to top-selling categories. While the technology is not yet mainstream, it is expected to dramatically impact how companies implement and operate sustainability programs and initiatives.
Driving digital transformation
With advances in technology providing a roadmap for the future, organizations are beginning to see the full potential of a digital supply chain. These new and emerging capabilities are poised to radically transform the way sustainability activities are monitored, implemented and reported. The digital revolution is only warming up, and new tools will introduce new possibilities. Keep up to date on the latest innovations at UL.com/perspectives.
1. GEODIS, “GEODIS 2017 Supply Chain Worldwide Survey,” 2017