A New Way of Seeing Supply Chain
Supply chains have made our world, with international manufacture, next-day delivery, and personalised goods at mass-produced prices. And they have a very big problem: Much of the time they can't see things right anymore.
It's not the fault of the hardworking millions of people in big manufacturing and logistics, who have spent billions of dollars and countless hours upgrading their processes to state of the art digital systems, or the folks at smaller companies, who get by on traditional spreadsheets and digital communications.
In fact, almost everyone has modernised as best they can their traditional ways of acting, communicating and carrying out business. The difficulty is that the complexity has also increased, owing to things like online commerce, continued globalisation, and increased regulatory demands. It's been hard to see a world that's more complex, contingent, and fast-acting than anything those traditional systems were built for.
Cloud computing, where I now work, attempts to remedy this problem by partnering with companies in Logistics, Transportation, Manufacture, and other areas. The idea is to bring to the digital transformation of supply chains a new platform, with unprecedented information and computing capabilities, which creates faster-acting and more flexible systems that adjust better to change.
Lately we've seen the disastrous results of this failure to see and adjust well to unexpected change. There were the shutdowns of COVID-19, when manufacturing, shipment, and sometimes even basic communications, collapsed across supply chains. Elsewhere, perhaps millions of consumer appliances, cars and high-end computers still sit unfinished, waiting for suddenly scarce semiconductors. Unexpected weather has stalled or halted the movement of goods. Companies with robust communications capabilities, rich databases, and flexible systems were best equipped to deal with these changes.
We see it in newer hazards, like unintentionally violating regulations about using fair labor practices across a supply chain, or meeting environmental sustainability regulations. Those are usually failures of visibility. Like COVID and freak weather, they hit supply chains outside of their means of traditional operations.
People both inside and outside the supply chain industries ask how all of these things could happen, and how the industry can keep from ever happening again. The answer is, it can't, at least not by adjusting traditional systems to combat the last catastrophe. What's needed is a better way to see the entire supply chain, counting as many influences on it as possible, spotting potentially large changes when they are still manageable, and continually calculating probabilistic models that seek maximum efficiency and compliance.
As the world's largest information company, with a strong record of uptime and reliability, we're partnering with experts in the supply chain field to bring those skills to this critical part of the world economy. Working with the Singapore-based shipping giant Ocean Network Express, for example, we're building new ways of seeing and analysing the movement of goods for 14,000 customers in 63 countries, in real time. In North America, we've joined with J.B. Hunt to use Artificial Intelligence to better match availability and supply of goods shipment, changing quickly to suit a projected system change. For package shippers everywhere, we have developed mapping tools that continually provide the least carbon-intensive route for any delivery.
Other cloud providers, along with logistics companies with the native skills to build their own flexible information systems, have their own answers. Many, including Google, are creating computational models, or "digital twins," of highly complex supply chains, mapping weaknesses and establishing system alternatives when we spot an emerging threat. It is a lower-cost way to do scenario planning, with more variations in the types of disruption and means to recovery than were possible before.
The goal throughout the supply chain world should not be to change a company's businesses, but rather to offer new tools that are better suited to operating in a complex, interdependent world. No one can spot the next COVID, freak weather pattern, or unintended regulatory problem before it happens -- life will continue to surprise us -- but it is possible to use better sensors, measuring tools, and connected computation to adjust systems far earlier to change.
This isn't the first time that new and better tools have helped manufacture and supply. The tradition goes back centuries, from better time measurement to estimate longitude for better navigation of the seas, to wireless communications among freight haulers in transit, or the way earlier computers enabled Operations Research for improved industrial production.
What we and others are doing with global information systems, capable of reading a continuously changing Internet, downloading all the world's train timetables, or modelling real-time traffic around the world, can open entirely new ways to see and respond to big system changes. We've already seen a big difference, and we think there is much more to come.