By Chaney Ojinnaka, MD & Founder of VendorMach
Supply chain professionals are now told on an almost daily basis that their next challenge is to digitise the supply chain. A recent report from PwC says that digitisation promises to “make the supply chain more efficient, agile and customer-focused”.
This is undoubtedly accurate, but advice on digitisation typically majors on what is possible within the supply chain – the use of emerging technologies such as the internet of things and 3D printing to solve traditional, analogue headaches.
Such strategies are unlikely to be possible unless organisations also focus on digitising their supply chain management processes, particularly around collaborating with suppliers and monitoring their whole supply chain network
The reality of supply chain management for most organisations today is that far too many resources are sucked into manual processes that require human intervention where there are errors, inaccuracies and omissions.
These processes are inefficient, generate new exceptions and errors of their own, and are also highly vulnerable to fraud.
Visibility and resilience
Moving to a more digitised model of supply chain management is a goal in its own right, as well as an enabler of a broader transformation of the supply chain. It’s the key to building a more robust and resilient supply chain that is flexible and adaptable – and to maintaining the visibility that is crucial for the successful management of supplier risk.
Indeed, it has become fashionable in procurement to talk about supply chain ecosystems – a broader environment where interconnectedness between suppliers and buyers works on many levels rather than in a linear progression.
The implications of that thinking are twofold: first, a failure at any point of the ecosystem can cause damage that ripples out to many other participants, often in unpredictable ways; and second, that managing and monitoring the risks of such failures is a far more complex activity than in the past.
In which case, the manual approach to supply chain management is no longer good enough. Without a clear view of their entire supply chain ecosystem, organisations cannot hope to deliver the resilience they require to remain competitive – or even in business.
That view must be as current as possible so that organisations are able to make key decisions on the basis of real-time information about the individual enterprises that make up their supply chain – and the organisations on which those suppliers depend themselves.