May 7, 2021

Can AI Rescue the Supply Chain from Post-Brexit Process Pain

AI
vectorai
Brexit
Supplychain
James Coombes, CEO and Co-Foun...
4 min
James Coombes, CEO and Co-Founder of vector.ai elaborates on his theory that AI can rescue the supply chain from post-Brexit process pains.
James Coombes, CEO and Co-Founder of vector.ai elaborates on his theory that AI can rescue the supply chain from post-Brexit process pains...

Brexit has been thwarting enterprise operations across the supply chain for five months now. Businesses on both sides of the UK/EU border are still adjusting to the new Brexit arrangements, with further problematic rule changes and restrictions pending in just a few months’ time.

The post-Brexit reality for many organisations is one of increased storage costs, late delivery penalties and, in the case of perishable goods, more wastage. There is also considerable pressure being imposed upon supply chain workers due to the extra requirements for importing and exporting, which is causing long hours, stress and anxiety. One major international supply chains solution company told me of a colossal 500% increase in the volume of work in the UK alone, far greater than the 40% increase among its European counterparts.

To put the issue into context, it is estimated that businesses in the supply chain will need to process an additional 200 million customs declarations each year, compared with roughly 55 million before Brexit. It is plain for all to see that these outdated and cumbersome processes are causing significant disruption to our supply chains. 

As such, the importing and exporting of goods and services is becoming too transactional, with little time for businesses and their suppliers to collaborate and form solid working relationships. Communication is becoming more disjointed. Each organisation is relying on siloed systems, making it almost impossible to share information in real-time. And, with an over-reliance on email to communicate, it’s extremely difficult to track every stage of the supply chain journey.

All of this carries risk and leaves the supply chain open to errors that could cost businesses even more time and money. For example, incorrectly inputting a weight or date can trigger a communication back to the supplier to seek correction, causing a delay to the item being shipped. If one small sub-shipment is wrong, it can hold up an entire shipment at customs. 

It begs the question: can technology help to free the supply chain from this post-Brexit process pain? The answer is a resounding yes. 

Cloud-based collaboration and communication tools are incredibly important in helping to eliminate time-wasting and energy-sapping processes. They can replace email and break down silos, enabling teams to work together closely on projects. We will also see Artificial Intelligence (AI) play a central role over the coming year. AI can handle basic cognitive tasks more quickly than humans, empowering supply chain teams to communicate faster and with better data at their fingertips.

The latest AI technology has the power to automatically analyse incoming documents and email, identify relevant information and instantly assign actions. What’s more, it can automate the entry of data required to fill in customs and freight documents – saving hours of time and stress. And, because modern AI approaches have a feedback loop that learns over time, they are more robust and dynamic than off-the-shelf Optical Character Recognition (OCR)-only approaches.

Essentially, by automating monotonous tasks like ‘answer that email’, ‘key in that data’ and ‘find that piece of information’, employees can reduce the time spent on administrative tasks such as processing documentation for various import and export checks. It means they can focus on building relationships with people in their supply chain network, improving their customer service and freeing up time to focus on business development. Not only will this lead to better and more profitable businesses, but happier team members freed from process pain. And, crucially, it will ensure traceability in an industry that is subject to strict regulatory scrutiny. Businesses will be able to track the origin and journey of their goods throughout the supply chain.

It’s, therefore, no surprise that a new vector.ai poll shows 75% of freight forwarders think technology could remove some of the burdens on staff responsible for managing the extra processes. Arguably, AI could be the silver bullet the supply chain so desperately needs, helping businesses introduce reliable, more streamlined ways of working. One freight forwarder which used AI for its first transaction, for example, reduced a typically 40 minute-long task down to just four minutes. 

Of course, businesses will still be subject to more processes and complexity across their supply chains in the post-Brexit world. But with the right AI tools, these processes needn’t be slow, error-prone and expensive. By bringing supply chains into the digital age, it is possible to rescue businesses from the extra process pain and focus on improving their import/export profitability.

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Jun 11, 2021

NTT DATA Services, Remodelling Supply Chains for Resilience

NTTDATA
supplychain
Supplychainriskmanagement
Procurement
6 min
Joey Dean, Managing Director of healthcare consulting at NTT DATA Services, shares remodelling strategies for more resilient supply chains

Joey Dean, the man with the coolest name ever and Managing Director in the healthcare consulting practice for NTT DATA and is focused on delivering workplace transformation and enabling the future workforce for healthcare providers. Dean also leads client innovation programs to enhance service delivery and business outcomes for clients.

The pandemic has shifted priorities and created opportunities to do things differently, and companies are now looking to build more resilient supply chains, none needed more urgently than those within the healthcare system. Dean shares with us how he feels they can get there.

A Multi-Vendor Sourcing Approach

“Healthcare systems cannot afford delays in the supply chain when there are lives at stake. Healthcare procurement teams are looking at multi-vendor sourcing strategies, stockpiling more inventory, and ways to use data and AI to have a predictive view into the future and drive greater efficiency.

“The priority should be to shore up procurement channels and re-evaluate inventory management norms, i.e. stockpiling for assurance. Health systems should take the opportunity to renegotiate with their current vendors and broaden the supplier channel. Through those efforts, work with suppliers that have greater geographic diversity and transparency around manufacturing data, process, and continuity plans,” says Dean.

But here ensues the never-ending battle of domestic vs global supply chains. As I see it, domestic sourcing limits the high-risk exposure related to offshore sourcing— Canada’s issue with importing the vaccine is a good example of that. So, of course, I had to ask, for lifesaving products, is building domestic capabilities an option that is being considered?

“Domestic supply chains are sparse or have a high dependence on overseas centres for parts and raw materials. There are measures being discussed from a legislative perspective to drive more domestic sourcing, and there will need to be a concerted effort by Western countries through a mix of investments and financial incentives,” Dean explains.

Wielding Big Tech for Better Outcomes

So, that’s a long way off. In the meantime, leveraging technology is another way to mitigate the risks that lie within global supply chains while decreasing costs and improving quality. Dean expands on the potential of blockchain and AI in the industry

“Blockchain is particularly interesting in creating more transparency and visibility across all supply chain activities. Organisations can create a decentralised record of all transactions to track assets from production to delivery or use by end-user. This increased supply chain transparency provides more visibility to both buyers and suppliers to resolve disputes and build more trusting relationships. Another benefit is that the validation of data is more efficient to prioritise time on the delivery of goods and services to reduce cost and improve quality. 

“Artificial Intelligence and Machine Learning (AI/ML) is another area where there’s incredible value in processing massive amounts of data to aggregate and normalise the data to produce proactive recommendations on actions to improve the speed and cost-efficiency of the supply chain.”

Evolving Procurement Models 

From asking more of suppliers to beefing up stocks, Dean believes procurement models should be remodelled to favour resilience, mitigate risk and ensure the needs of the customer are kept in view. 

“The bottom line is that healthcare systems are expecting more from their suppliers. While transactional approaches focused solely on price and transactions have been the norm, collaborative relationships, where the buyer and supplier establish mutual objectives and outcomes, drives a trusting and transparent relationship. Healthcare systems are also looking to multi-vendor strategies to mitigate risk, so it is imperative for suppliers to stand out and embrace evolving procurement models.

“Healthcare systems are looking at partners that can establish domestic centres for supplies to mitigate the risks of having ‘all of their eggs’ in overseas locations. Suppliers should look to perform a strategic evaluation review that includes a distribution network analysis and distribution footprint review to understand cost, service, flexibility, and risks. Included in that strategy should be a “voice of the customer” assessment to understand current pain points and needs of customers.”

“Healthcare supply chain leaders are re-evaluating the Just In Time (JIT) model with supplies delivered on a regular basis. The approach does not require an investment in infrastructure but leaves organisations open to risk of disruption. Having domestic centres and warehousing from suppliers gives healthcare systems the ability to have inventory on hand without having to invest in their own infrastructure. Also, in the spirit of transparency, having predictive views into inventory levels can help enable better decision making from both sides.”

But, again, I had to ask, what about the risks and associated costs that come with higher inventory levels, such as expired product if there isn’t fast enough turnover, tying up cash flow, warehousing and inventory management costs?

“In the current supply chain environment, it is advisable for buyers to carry an in-house inventory on a just-in-time basis, while suppliers take a just-in-case approach, preserving capacity for surges, retaining safety stock, and building rapid replenishment channels for restock. But the risk of expired product is very real. This could be curbed with better data intelligence and improved technology that could forecast surges and predictively automate future supply needs. In this way, ordering would be more data-driven and rationalised to align with anticipated surges. Further adoption of data and intelligence and will be crucial for modernised buying in the new normal.

The Challenges

These are tough tasks, so I asked Dean to speak to some of the challenges. Luckily, he’s a patient guy with a lot to say.

On managing stakeholders and ensuring alignment on priorities and objectives, Dean says, “In order for managing stakeholders to stay aligned on priorities, they’ll need more transparency and collaborative win-win business relationships in which both healthcare systems and medical device manufacturers are equally committed to each other’s success. On the healthcare side, they need to understand where parts and products are manufactured to perform more predictive data and analytics for forecasting and planning efforts. And the manufacturers should offer more data transparency which will result in better planning and forecasting to navigate the ebbs and flows and enable better decision-making by healthcare systems.

Due to the sensitive nature of the information being requested, the effort to increase visibility is typically met with a lot of reluctance and push back. Dean essentially puts the onus back on suppliers to get with the times. “Traditionally, the relationships between buyers and suppliers are transactional, based only on the transaction between the two parties: what is the supplier providing, at what cost, and for what length of time. The relationship begins and ends there. The tide is shifting, and buyers expect more from their suppliers, especially given what the pandemic exposed around the fragility of the supply chain. The suppliers that get ahead of this will not only reap the benefits of improved relationships, but they will be able to take action on insights derived from greater visibility to manage risks more effectively.”

He offers a final tip. “A first step in enabling a supply chain data exchange is to make sure partners and buyers are aware of the conditions throughout the supply chain based on real-time data to enable predictive views into delays and disruptions. With well understand data sets, both parties can respond more effectively and work together when disruptions occur.”

As for where supply chain is heading, Dean says, “Moving forward, we’ll continue to see a shift toward Robotic Process Automation (RPA), Artificial Intelligence (AI), and advanced analytics to optimise the supply chain. The pandemic, as it has done in many other industries, will accelerate the move to digital, with the benefits of improving efficiency, visibility, and error rate. AI can consume enormous amounts of data to drive real-time pattern detection and mitigate risk from global disruptive events.”

 

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