The global supply chain, like many sectors, has been left reeling from the effects of Covid-19 and is yet to fully recover from the negative impacts of the pandemic. These challenges have been amplified by global events like the conflict in Ukraine, the continuous threat of climate change, and the rising costs of oil and gas. For these reasons, it is imperative, now more than ever, for businesses to move away from linear supply chains and turn to a digital supply network.
The current supply chain process follows a linear strategy from source to consumption. While this strategy has operated effectively in the past, it has struggled to adapt to the current climate and the challenges facing the supply chain. Delays and disruption have steadily increased over the years with businesses struggling to manage ‘bull-whip’ effects. This is when a disruption at a single stage of the supply chain negatively impacts the whole process. Due to a lack of communication between partners, these disruptions can spiral into drastic problems which can leave a negative impact.
It is important to implement effective solutions for supply chain disruptions and delays to prevent negative consequences for organisations. In the most extreme scenarios, supply chain disruptions can lead to the closures of factories as well as unemployment. A digital supply network can play a crucial role in allowing businesses to combat the current issues facing the supply chain.
A report from the Consumer Brands Association has highlighted the key attributes of the “supply network of tomorrow”. The report offers the prospect of a connected supply network that will respond to demand signals and offer continuous optimization. This will, in turn, lead to greater responsiveness, transparency, and speed to match growing customer demands.
With an increased focus on collaboration and cooperation between businesses that were formerly competitors, the supply chain will gradually begin to strengthen itself. This will ultimately lead to a more healthy, sustainable, and resilient supply chain that will be able to endure the ongoing challenges.
The report also offers a glimpse of the positive impact a digital supply network will have on cost savings. When applying a DNS strategy to a prospective $10 billion consumer goods company, sales increased by 1-3%, inventory was reduced by up to 30%, 98% of targets were met, and a 96% forecast accuracy was achieved.
Digital Supply Networks can also help to tackle delays and disruption by offering a holistic and transparent view of the processes in a given supply chain. End-to-end connectivity provides real-time data and updates which can offer a massive reduction in bull-whip incidents. This allows businesses to quickly identify areas that may be the most vulnerable and quickly implement a solution that will ensure the flow of supplies to consumers.
With the analytical capabilities of a DNS, businesses will be able to evaluate strengths and weaknesses across the supply chain. They will also be able to analyse previous patterns which will offer reliable forecasts for future trends across the supply chain market.
The UK’s new procurement bill is set to come into effect by October 2024 and will radically shift the landscape for the supply chain process. However, businesses still have to content with ongoing complications. Therefore, it is crucial for businesses to adopt new digital solutions now. Speaking at the Cabinet Office last month Connected Places Catapult association Malcolm Harbour stressed the importance of businesses embracing innovation saying:
“Don’t hold back on innovation because you’re waiting for the Cabinet Office to get this legislation through. The UK economy does not have enough time to put a stop to the innovative use of procurement. We need new ideas; we need you out there cultivating suppliers and securing suppliers and knowledge.”
Our StockAssist Industrial solution is GS1 approved and offers you full control and tracking of your inventory across multiple locations. StockAssist Industrial maximises your supply chain management efforts to achieve optimal results and increase staff efficiency.
Find out more about our solutions here, or get in touch to book a demo.
