Supply Chain Finance Management Using Artificial Intelligence

Supply Chain

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.

Microsoft is one company working towards such goals. It reported back at the end of last year on the first stage of a long-term project to put digital technologies to work in the management of the supply chains and production lines that produce hardware ranging from its Surface tablet to Xbox, its gaming console.

The IT giant’s aim has been to use business intelligence tools to generate much greater quantities of insight into how its supply chain is feeding production and shipping, so that risks can be addressed, along with under-performing areas. Even at the early stages of the process, with more automation and analytics tools still to be deployed, Microsoft reports significant time and cost savings.

SAP, meanwhile, has also been a major investor in this area, both in its own right and for clients, building tools such as the Asset Intelligence network to enhance collaboration and provide far greater supply chain visibility than ever before.

Data drives collaboration

The common theme in these endeavours is data. Without a constant feed of information from and about members of the supply chain ecosystem, it’s not possible to secure the level of visibility required, whether of individual suppliers or the ecosystem as a whole.By contrast, VendorMach has developed a platform which enables organisations to leverage suppliers’ own data, as well as external information, which will put them in a much stronger position; with greater insights into suppliers’ creditworthiness, credibility and resilience.

This will ensure they are in a position to make decisions based on real-time monitoring.

Moreover, automating in this way will reduce the need for time-consuming and expensive manual interventions, freeing up resources for work that adds value. This is an opportunity for organisations to build much more collaborative relationships with their suppliers, which in turn offers the promise of increased resilience and reliability for all.

This sort of work may attract fewer column inches, but it should be at the heart of work that seeks to digitise the supply chain. Without greater visibility of your suppliers, maintained in real time, it will not be possible to build a robust network capable of leveraging the benefits of further investments in new technologies and automation.

Chaney Ojinnaka is the MD and Founder of VendorMach, a network driven platform, which uses artificial intelligence to solve the inefficiencies in the supply chain. VendorMach is currently offering limited company shares on equity crowdfunding platform Seedrs.