Why digital infrastructure is key to supply chain resilience

Organizations seeking flexibility and resilience in their supply chain must adopt technology to innovate, solve critical gaps in the supply chain and improve customer service.

Biden Harris administration recently announce Its Freight Logistics Improvement Business (flow) that will be implemented to pilot the exchange of critical information among key stakeholders throughout supply chains. The FLOW program aims to address the inherent weaknesses that continue to plague US supply chains, such as a lack of investment in long-term resilience. While this initiative is a positive step forward for enhancing supply chain resilience, it also underscores the increasingly urgent need for modern digital infrastructure and transparency within supply chains.

The general lack of digital infrastructure within supply chains allows for persistent issues affecting employees, supply chain partners and their customers. Thus, organizations must develop their approach to protect their supply chain from shocks against ongoing fluctuations and risks. This article will explore why digital infrastructure that provides real-time insight and intelligence down to the unit level is critical to enabling management’s current goals of building resilient supply chains.

See also: Anatomy of the digital twin of the supply chain

Challenges affecting modern supply chains

Amazon’s 2-day shipping promise is driving a trend that has resulted in consumers changing their expectations of how they buy and receive products, with 90% From consumers states that two to three days shipping should be the primary delivery promise. Customers expect shorter lead times, transparency in product arrival, increased customization to their specific preferences and needs, and improved sustainability. Organizations that cannot pivot quickly and provide customers with consistent touch points can risk losing customer loyalty and profits to a competitor.

At the same time, supply chains have become highly interconnected. Multiple partners and suppliers are involved every step of the way to provide raw materials, transportation services, and more. As supply chains continue to move, companies struggle to keep track of their goods and often lose a significant amount of profit from product wastage. In fact, 40% Of all food waste in the United States, it occurs the most in the supply chain. To avoid losing profit either from competition or wastage, organizations must continue to innovate using modern technology that exposes gaps and weaknesses within supply chains.

Legacy systems out of place for supply chain disruption

Supply chain executives are dealing with increasing supply chain disruption caused by economic instability, operational disruptions due to unavailability of resources, labor shortages, delays in suppliers and logistics partners, and uncertainty about demand. In fact, though the number of worldwide supply chain disruptions increased by 88% from 2020 to 2021, More than half of organizations still lack end-to-end supply chain visibility and instead rely on legacy data-tracking methods, such as hand-drawn images of supply chains, to make critical business decisions. These “point in time” approaches are based on outdated information from data warehouses, lack contextual information, and are not able to provide real-time updates that share insight into the exact state of goods as they move through the chain of possession. Furthermore, legacy systems generally only track shipping containers rather than each individual product unit. Legacy systems create additional obstacles for business leaders and impede their ability to achieve supply chain resilience. Decisions must move from “point in time” to “all time,” while still withdrawing from the underlying fact and leveraging technology to model what might happen, achieving the best possible outcomes before disruptions cause impacts, thus mitigating as much risk as possible.

Investing in digital infrastructure

Approximately 80% Supply chain leaders must adopt digital planning and processes to increase supply chain visibility and improve their ability to make informed strategic business decisions. It is clear that the need for modern supply chain technology will only continue to grow as supply chains become more complex. By digitizing their supply chain, business leaders can understand where waste is occurring and how it can be reduced in the future by anticipating disruptions before they happen. Moreover, companies can share real-time updates with their customers regarding the exact location of their products and the expected time of arrival. For example, digital twin technology can provide an additional layer of visibility to supply chains by leveraging data from vendor tracking systems, such as container tilt or temperature, to develop a visual representation of an organization’s supply chain. Digital insight into their supply chain can enable business leaders to create strategic playbooks with “what if” scenarios and make informed decisions early.

conclusion

While FLOW is the first step to improving information exchange between stakeholders in supply chains, the flow of goods can be improved through a digital infrastructure that provides real-time insights and enables better preparation and planning for unpredictability and volatility. Government initiatives like FLOW help pay more attention to supply chain issues and demonstrate the need for a holistic view from production down to the last mile. Organizations seeking resilience and resilience in their supply chains must adopt technology to innovate, resolve critical gaps in supply chains, and improve customer service—all of which are essential to today’s operations.