6 November 2021 A topic often discussed by Supply Chain experts during the Covid-19 pandemic is the disruption of the supply chain, not only the one happening now but also others that might occur. With the significant impact of the coronavirus worldwide, it has been possible to identify weaknesses in the supply chain at both national and global levels. Based on this, many have called attention to building a more resilient chain, capable of facing future disruptions triggered by natural disasters, political crises, health issues, among other causes. For most of these specialists, the path lies in seeking innovation, relying on technologies that offer advanced planning and optimization platforms at both management and operational levels. A unanimous position is that Covid-19 has significantly accelerated the digitalization of businesses. Those who planned to go digital in the next three or five years ended up advancing their projects to overcome difficulties and meet new demands. Those who were already digitalized sought new solutions and improvements to their tools, thinking not only of the present moment but especially preparing for the future, as innovations provide essential support for scenario analysis and decision-making. Artificial Intelligence In an article published on the website of the Association for Supply Chain Management (ASCM), Henry Canitz, Director of Product Marketing and Business Development at Logility, talks about the use of artificial intelligence (AI) to simulate possible disruptions, find ways to mitigate effects, and guide the creation of action plans that can be quickly implemented. As he explains, these platforms use end-to-end supply chain data and machine learning intelligence to quickly detect changes, alert users, and suggest the best responses and actions. They enhance decision-making capabilities by providing data and analysis during high-pressure situations. Visibility and Data Analysis through Digitalization In a previously published article on this blog, we addressed the World Economic Forum (WEF) report on resilient supply chains. A point heavily emphasized by the agency was the visibility of the chain from end to end. According to the WEF, having a complete picture is crucial to understanding the impact of the disruption. To achieve this visibility strategically and assertively, it is necessary to abandon paper and invest in digitalization. According to Canitz, end-to-end visibility and improvement through advanced analytics first require comprehensive, clear, consistent, and up-to-date supply chain data. “Once available, platforms can serve you almost in real-time, in the format needed to support planning and optimization processes,” he states. He adds that there is an immense possibility of digital data storage, which would be very useful for quickly detecting and responding to supply chain disruptions. Agility in Data Analysis and Decision-Making Another key capability is supply chain agility, argues Canitz. For him, an agile company can profitably respond to disruptions. “This agility is achieved through resources that allow for quickly identifying changes, decisions, and ideal responses that maximize benefits for the company,” he asserts. According to the expert, agility can be maximized by leveraging human and technological resources. Humans excel at solving problems requiring common sense, generalization, creativity, and managing ethical dilemmas and subjective actions. Systems, on the other hand, excel at locating data and information, developing effective solutions, eliminating deviations, reducing processing times, and handling repetitive decisions. For Canitz, an agile supply chain can quickly launch new products, divert products from one destination to another, and respond to opportunities and disruptions. Hence the importance of investing in process digitalization. It is worth adding that, in its report, the WEF highlighted that total chain visibility is essential for optimizing efficiency and agility. Automation for Speed The current crisis has shown us that everything changes very quickly, so an essential capability to survive supply chain disruptions is speed: speed to identify the disruption, analyze available data, obtain the best response, and take necessary actions. With digitalization, it is possible to undertake these actions quickly because the available tools provide critical updates, trend changes, alerts, and execution of decisions and actions. An example is the WMS system, which, in addition to bringing greater productivity and agility to internal processes, offers real-time data on the operation, automatically alerting you whenever discrepancies occur. This greatly simplifies data analysis and decision-making. As Henry Canitz points out in his article, the time between disruption and optimal response can be reduced by a factor of 10 through automation/digitalization. And he asks: “Imagine what this time compression could enable for your company and how much value it could create?”. In his opinion, automation can help the company during a disruption in various ways, such as changing purchasing plans, redirecting inventory, dealing with suppliers, and managing financial resources. Key Questions Finally, Canitz states that surviving the Covid-19 pandemic will push many logistics operations and the people managing them to the limit. To help companies, he lists a series of questions that should be discussed in teams: • Do we have access to complete, clear, consistent, and up-to-date data along the entire supply chain (from our suppliers to the final consumer)? • Do we have a plan to adopt advanced analytics, artificial intelligence, and machine learning in our operations? • Do we have the ability to run multiple hypothetical scenarios to analyze how our operation will be affected by different types of disruptions? • Can we develop mitigation plans for scenarios that are most likely to occur? • Can we quickly detect a prolonged disruption, analyze options to mitigate it, and execute the best response? The expert emphasizes: if you answer “no” – or even “maybe” – to any of these questions, it’s time to get serious and prioritize digitalization in your company for a better and more intuitive future. Digitalization of the Supply Chain: How to Overcome Periods of Crisis Deagor WMS per ecommerce può aiutarti!