May 17, 2020

How technology will transform supply chain processes in Asia

Dale Benton
5 min
How technology will transform supply chain processes in Asia
Wendy Kent, chief operating officer at product design and procurement specialist, Matrix, examines what the coming months hold for supply chains in Asia...

Wendy Kent, chief operating officer at product design and procurement specialist, Matrix, examines what the coming months hold for supply chains in Asia

2016 has been a year for change, most notably from a political perspective, but the leaps and bounds made in the technology arena cannot be ignored. It’s safe to say we have seen a great deal of technological transition as companies around the globe have taken strides towards incorporating artificial intelligence (AI) into the day-to-day, training robots to help combat inefficiencies at every point of the supply chain. Investment in these disruptive technologies has become a necessary step for forward thinking businesses to ensure survival in a trend-driven market. This is evident from adidas unveiling the first shoe to come out of its robot factory, an AI collaboration between Fanuc and Nividia, and Unilever experiencing prototype production time cut by nearly half after investing in 3D printing.

Disruptive technologies have been influential in the supply chain for several years now, but 2017 will be a year of acceleration. Factories in Asia operate in an intensely competitive market and there will be a noticeable move towards incorporating AI technology more broadly to keep pace with burgeoning retail demand. The rise of the 24-hour economy and increased expectation of instant gratification puts pressure on factory owners to strive for ambitious targets in an attempt to establish a lead against competitors. However, there is no place in the modern, transparent supply chain for factory owners who push staff too hard, and beyond capacity to meet these targets.

The likes of AI and 3D printing enable tasks that were once carried out by humans to be done by machines far more efficiently, conveniently and ultimately, more cheaply. In addition to near-continuous production, once established, these technologies can eliminate the possibility of human error, and enhance employee well being for the modern generation of factory workers.

2017 will mark the start of a new working relationship between the human workforce and AI. After all, technology needs to be managed and maintained by someone. This presents an opportunity for workers to be focused and productive in their roles with the support of technology, and take a step away from menial tasks to completing work that is far more fulfilling.

Technological innovation will start to impact quality of workers’ lives too. It will begin to introduce greater transparency to working hours and pay throughout the supply chain benefiting workers greatly. Worker well-being is becoming more and more important to ethically conscious brands, challenging the norm of unregulated and varied working standards across supply chains in Asia. Whilst there have been many efforts over recent years to address this issue, 2017 will see a step up in the consistency of concern for human rights and employee well-being.

The permeation of technology won’t stop there either. Utilising elements of the technology that monitors worker output, we’re developing a smart new app which users will be able to use to log responses to questions about the quality of their working lives. Accumulated information, gathered in real time, will help build a picture of each factory’s performance and staff happiness. Data will also reveal how to make improvements to equipment, greatly boosting efficiency and quality in factories throughout our supply chain.

Moreover, encouraging an open, transparent environment where people can share their opinions openly with each other and positions of authority will help factories improve and grow, also helping bring the working standards in Asia in line with contemporary worker ideals.

Many forms of technology are helping supply chain processes shift from being simply reactive to becoming far more proactive, even predicting potential potholes before they throw plans and strategy off-course. In fact, through trial, we’d estimate that the incorporation of tech developments could help cut production times for some products from three months to three weeks. A mind-blowing prospect for key players involved in product supply chains, that offers a real competitive advantage.

The latest robots have the ability to learn how to complete multiple jobs, so they can be plugged in practically anywhere along the supply chain. AI’s ability to be flexible, particularly in manufacturing processes, will take AI to the mainstream as its return on investment (ROI) will become clear to stakeholders.

Historically, there has been limited means to survey individual workers, without putting the factory under constant surveillance. However, new networks and sensors are now making insights visible that could not have been revealed in the past. Aggregated, personalised data on worker output will allow factory bosses to make changes to processes for all staff, opening opportunities to increase productivity even further, streamlining previously convoluted jobs that caused bottlenecks in production. Additionally, one small sensor could provide accurate, real-time data to inform buying decisions, helping factories to operate on a leaner business model and reduce wastage. This is a game changer, and while it’s a priority focus for us at Matrix, it will be increasingly present throughout supply chains across Asia.

It will also help address the issue of falsification in the auditing process. Widespread in factories across Asia, falsification is bought on by fear of failure, and the result is that real issues in factories can remain perpetually unresolved, ultimately compromising the ethical standards of a supply chain. This sort of automated data will give retailers greater power to identify and support those suppliers with improving quality and ethical standards and disassociate themselves from those who are falling short.

This information can then easily be communicated to the consumer. 2016 has seen a decline in levels of consumer trust in brands and retailers, following a number of high profile exposures, placing a higher value on integrity and ethics. In 2017, a world of political change and economic uncertainty, full-disclosure and trust will be highly valued and appealing to consumers. Access to core data and heightened connectivity will provide buyers and consumers with the ethical story behind the product, from how it was created to its environmental impact. Supply chain partners across Asia must work together to make product information far more accessible. 

Asia is at the forefront of incorporating technology for the better, which gives businesses operating there a significant advantage as we roll into 2017. Technology is the vehicle to change for supply chains in a transparent age, and the only way to ensure advantage on an increasingly competitive global stage. What supply chains in Asia must consider is how to leverage the competitive benefits without sacrificing the people working within it.

 

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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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