May 17, 2020

Seven reasons to turn to intelligent supply chain solutions

Supply Chain
Technology
Neil Murphy
4 min
digital ogistics network
Neil Murphy, Global VPat ABBYY discusses the seven reason why the supply chain industry should turn to intelligent solutions.

Global epidemics, increas...

Neil Murphy, Global VPat ABBYY discusses the seven reason why the supply chain industry should turn to intelligent solutions.

Global epidemics, increasing pressure around carbon emissions, and consumers’ desire for customised products are putting the supply chain under more strain than ever before. As supply chains become more global and more complex as demand grows, processes are becoming increasingly challenging to monitor and optimise. These inefficiencies could do more than just monetary or reputational damage – nowadays, they could impact people’s lives.

Identifying the root cause of inefficiencies can prove extremely difficult without having a comprehensive view of how your business operates. The technologies exist that can enable supply chain leaders to easily identify where bottlenecks are occurring, measure vendor performance, streamline company operations, and enhance profit margins. This is thanks to optimising the order-to-cash process by providing a 360-degree view of all organisational processes in real-time – across disparate back-end systems, departments, teams, and locations. This is critical for the future of supply chains.

According to a Deloitte study, the supply chain ranks as one of the highest priorities for digital transformation investments. However, many organisations have been slow to adopt new technologies. Process analytics platforms are a critical success factor in improving supply chain efficiency, speed and accuracy in a way that siloed, standalone systems cannot. While the opportunities are wide-ranging, there are seven key ways that process intelligence technologies can improve your supply chain operations here and now.

1. Enhance profit margins  

Paying invoices on time or early can have substantial cost saving benefits. Timely invoice processing improves discount rates and, depending on the volume and size of the organisation, could result in hundreds of thousands, if not more, in cost savings. For some supply chains, eliminating just one day of invoice processing time can save millions of dollars.

2. Identify the best suppliers

Choosing the right vendors is a crucial component of a successful supply chain. Having a comprehensive view of your processes makes it easy to see which suppliers are the most timely, reliable, and responsive. Process intelligence makes it possible to accurately measure and track vendor performance by monitoring and identifying the following criteria: which vendors are the most effective at fulfilling orders in a timely manner; which vendors are the most accurate; pinpointing vendor issues at their root cause before they spread to other operations; and identifying variations from vendor agreements.

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3. Fix process deviations in real-time

Advanced process intelligence tools provide real-time alerts when processes deviate from the “ideal” path. Alerts can be configured for a wide range of scenarios including being notified when an order takes longer than X days to ship out, to being alerted if an invoice takes longer than X weeks to process. These alerts enable organisations to address process inefficiencies and variants immediately, before they become a much more significant – and more costly – concern.

4. Track packages in real-time

Process intelligence platforms provide timely, accurate monitoring of packages along every step from shipment to delivery. These platforms enable supply chain managers to track packages in real-time, estimate transit times, identify delays, allow for real-time intervention, and increase the speed of delivery.

5. Predict future influxes of orders

Neural network-enabled process monitoring offers prescriptive analytics that help make forecasts into the future. Innovative AI technologies identify improvements that are possible and help predict when shipments may delay – as well as predict and improve capacity and planning. Data-driven forecasts enable organisations to minimise safety stock and reduce overhead costs, all with a core focus on improving the supply chain.

6. Reduce bottlenecks

Supply chain processes vary widely. Unexpected influxes of orders, low inventory, shipment delays, distribution system inefficiencies, and a number of other variables can cause inconsistencies in operational performance in ways that affect a company’s bottom line. Obtaining a comprehensive view of your process makes it possible to accurately identify where bottlenecks are occurring, which helps enhance overall profit margins and leads to better customer experience.

7. Improve the cost to complete each process

Sophisticated process intelligence not only effectively monitors the full scope of organisational processes, but it also evaluates the direct cost associated with each process, enabling organisations to strategically improve the cost of completing each individual process.

Not embracing digital innovation in the supply chain is a missed opportunity. For companies looking to succeed in their digital transformation projects, process intelligence solutions can go a long way in creating a more effective, efficient, and ultimately successful supply chain operation. Process intelligence enables supply chain leaders to more strategically cut costs, choose the right vendor partners, improve capacity planning, and streamline workflows, all of which play an important role in helping increase customer satisfaction and loyalty. More than this, they help supply chain leaders prepare for the worst – whatever the next major obstacle might be for global supply chains.

For more information on procurement, supply chain and logistics topics - please take a look at the latest edition of Supply Chain Digital magazine.

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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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