A*STAR develops new analytic method to identify supply chain vulnerability
The Agency for Science, Technology a...
“The resilience of supply chain networks to major disruptions can now be measured using a multi-factor test”.
The Agency for Science, Technology and Research (A*STAR), Singapore’s largest public sector agency for economically-oriented research, announced today its new analytic measure that allows companies to determine its vulnerability to disruptions within the supply chain.
According to the company’s researchers at the Institute of High Performance Computing, “the measure has the potential to dramatically improve decision-making in supplier management and lower financial risk across many sectors.”
The consequences of disruption in the supply chain, either by removing critical supplies or suppliers from the downstream elements of the network, “the economic fallout can be catastrophic and widespread.”
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According to Rick Goh, team leader at the Institute of High Performance Computing, “when a man-made or natural disaster, or disruption is happening somewhere, a company may not capture the impact to its production line as the disruption may apply to its second or third tier suppliers directly, rather than to its first tier partner".
Goh continues, explaining that the Institute of High Performance Computing wanted to capture the propagation of supply chain disruption risks far beyond their immediate connection to a focal company, which may reach to the company later on but they usually realize that it is too late when it comes to them due to the loss of time across the supply chain network.”
A*STAR’s new analytic method tracks the ripple effects of a production pause throughout the supply chain. By using “generalized mathematical models of both perfect tree and randomly constructed networks”, researchers showed that “risks in a supply chain network are determined by both the resilience of companies and the structure of the supply chain network, and that mapping out and understanding these risk factors is essential to risk minimization.”
Jesus Felix Bayta Valenzuela, first author of the study, concludes that “the modelling confirms that having multiple redundant suppliers, both direct and indirect, will help cushion, or even remove, any impact on one’s own production, and may help prevent chained domino-effect disruptions”.
Pandora and IBM digitise jewellery supply chain
Pandora has overhauled its global supply chain in partnership with IBM amid an ecommerce sales boom for its hand-finished jewellery.
The company found international success offering customisable charm bracelets and other personalised jewellery though its chain of bricks and mortar retail destinations. But in 2020, as the COVID-19 outbreak forced physical stores to close, Pandora strengthened its omnichannel operations and doubled online sales.
A focus on customer experience included deploying IBM’s Sterling Order Management, increasing supply chain resiliency and safeguarding against disruption across the global value chain.
Pandora leverages IBM Sterling Order Management as the backbone it its omnichannel fulfilment, with Salesforce Commerce Cloud powering its ecommerce. Greater automation across its channels has boosted the jeweller’s sustainability credentials, IBM said, streamlining processes for more efficient delivery. It has also given in-store staff and virtual customer service representatives superior end-to-end visibility to better meet consumer needs.
Jim Cruickshank, VP of Digital Development & Retail Technology, Pandora, said the digital transformation journey has brought “digital and store technology closer together and closer to the customer”, highlighting how important the customer journey remains, even during unprecedented disruption.
"Our mission is about creating a personal experience and we've instituted massive platform changes with IBM Sterling and Salesforce to enable new digital-first capabilities that are much more individualised, localised and connected across channels and markets,” he added.
Pandora’s pivot to digital
The pandemic forced the doors closed at most of Pandora’s 2,700 retail locations. To remain competitive, it pivoted to online retail. Virtual queuing for stores and virtual product trials via augmented reality (AR) technology went someway to emulating the in-store experience and retail theatre that is the brand’s hallmark. Meanwhile digital investments in supply chain efficiency was central to delivering on consumer demand.
“Consumer behaviour has significantly shifted and will continue to evolve with businesses needing to quickly adapt to new preferences and needs,” said Kareem Yusuf, General Manager, AI Applications and Blockchain, IBM. “To address this shift, leading retailers like Pandora rely on innovation to increase their business agility by enabling and scaling sustainable supply chain operations using AI and cloud.”
Yusuf said Pandora’s success was indicative of how to remain competitive by “finding new ways to create differentiated customer experiences that protect their enterprises from disruptions to help mitigate risk and accelerate growth”.