A mantra for successful supply chains
Supply chain disruptions during the pandemic-induced lockdown and its impact on businesses in general and the economy as a whole are still fresh in our minds. Although experts believe they could not have done anything differently, as the sheer force of the spread of Covid-19 left no one time to think, let alone act, to avert disaster.
Companies of all shapes and sizes, whether it’s Apple and the delays around iPhones or electric vehicles waiting for their batteries, the industry has been reduced to waiting its turn, which all the chains against efficient supply chains protect themselves. A blog post by IBM highlights a recent potential railroad strike in the United States and how it could have worsened the already strained supply chain. Here are some excerpts from the post:
As supply chain managers (CSCOs) walk a tightrope in the face of potential disaster, their steps are far from hesitant. A new report from the IBM Institute for Business Value (IBV) collects insights from 1,500 CSCOs surveyed. According to the report, CSCOs help their organizations differentiate and create competitive advantage by using data and AI to improve their supply chains. And this competitive advantage drives profitability and increased revenue relative to their peers.
Smart investments offer clear benefits
Companies that align their digital transformation and sustainability agendas achieve 20% higher revenue growth than their peers, the report finds. CSCOs see a clear competitive advantage from these investments, both from a revenue and bottom line perspective. They also obtain a differentiated proposal to attract the best permanent talents and young professional talents.
More than half of surveyed CSCOs are accelerating their investments in digital technologies, including increasing automation and digitization of physical and asset-based processes. 48% apply open innovation with business partners, 46% explore new risk models, and 54% take a cutting-edge approach to data-driven innovation, including using predictive approaches and implementing flows technology-infused workplaces.
Take for example the Applied Science and Technology Research Institute of Hong Kong Company Limited (ASTRI). This R&D center for information and communication technology is responsible for promoting Hong Kong’s competitiveness in technology-based industries. As part of its mission, ASTRI helps manufacturers to shorten their time to market, reduce their development costs and improve the quality of their products.
ASTRI has developed a digital twin approach to equipment development. By implementing a science-based agile approach to designing smarter manufacturing equipment, leveraging smart workflows between assets throughout the extended production process, and using requirements-driven analysis and design based on a template, the organization creates a digital twin of a piece of equipment. This allows engineers to perform a wide range of simulations and tests at nominal incremental cost to identify potential design flaws earlier in the cycle. This model-based method also allows earlier validation of customer requirements.
ASTRI estimates that the twin approach reduced integration time by 40% and total development cost by 30%. Additionally, the use of robotic automation, IoT sensor integration, and digital twin modeling for predictive maintenance supports 24/7 plant availability.
IInnovators outpace the competition
Through these transformational technology investments, CSCOs are managing their supply chains to drive powerful results. They are strengthening their technology strategies and adopting a data-driven innovation approach that emphasizes scaling hybrid cloud infrastructure, AI-enabled workflows, customer-driven sustainability client and a deeper focus on cybersecurity. These CSCOs make up the top 20% of respondents, also known as “the innovators”.
Innovators are ahead of other CSCOs in embracing digital transformation. They use hybrid cloud platforms 60% of the time, compared to 49% among their competitors. Innovators are also leading the field with a digital infrastructure that allows investments in new technologies to scale efficiently and create value. They use AI digitization and automation 81% more than their peers. 90% of innovators use AI and advanced analytics in demand management and predictive forecasting, 18% more than their peers.
The findings underscore the importance of innovative CSCOs that prioritize digitization for effective end-to-end visibility and momentum. In short, if you want to increase performance and value, data-driven innovation is your path.