The industrial supply chain is the backbone of any enterprise and plays a crucial role in the success of a business. In today’s VUCA (volatile, uncertain, complex, and ambiguous) world, where the economic landscape is constantly changing and unpredictable, it is more important than ever to have an efficient and resilient supply chain. With ongoing trade wars, the global pandemic, and a shortage of labour, the industrial supply chain has faced unprecedented challenges. Traditional solutions such as diversifying suppliers and sourcing closer to home can help, but they are not enough to fully address the crisis. The solution lies in leveraging technology to optimize operations, enhance transparency, and improve collaboration among stakeholders. By enhancing existing technology and developing modern technologies, the technological crisis in the industrial supply chain can be improved.
Let’s explore how technology ONLY can play a pivotal role in solving the industrial supply chain crisis.
- Enabling visibility of inventory in the organization:
Having visibility of inventory is crucial to managing the supply chain efficiently. With the help of technology, companies can monitor their inventory in real-time and make data-driven decisions regarding inventory management.
- Visibility of movement of material while in transit:
Trade and commercial laws are getting more complex every day. Technology can ensure smooth supply chain compliance with all commercial laws, including GST, waybills, customs, and excise. Tracking technology such as GPS, RFID, image processing, and sensors can provide real-time visibility of the movement of materials while in transit.
- Focusing on customer demands and needs:
Customer demands and needs change frequently. The ultimate objective of the supply chain is to enhance the customer experience or satisfy customer needs. Technology can help companies change their sales strategy by focusing on specific groups and items and volumes to meet customer demands.
- Optimizing capital expenditure (Capex):
Time to time Capex needs to be done for smooth industrial supply chain. Technology can enable us to identify and do the correct Capex by providing real-time data and insights.
- Optimizing transportation of workforce:
Supply chain is also affected by the transportation of manpower. Technology can help optimize the transportation of labour for smooth industrial supply chain.
- End-to-end visibility of industrial supply chain:
Technology can enable end-to-end visibility of industrial supply chain from raw material inventory to finished goods inventory. In other words, from the supplier of raw material to the customer who is using the product.
- Optimum utilization of resources:
Not only hard items i.e., raw material or factory, but soft costs i.e., labour, distribution, etc., also play a vital role in the supply chain. Solving the industrial supply chain crisis can be achieved by using technology whereby optimum utilization of resources of all elements of the supply chain is possible.
Among the means by which technology can alleviate the industrial supply chain crisis are:
- Tracking: GPS, RFID, image processing, sensors, and other tracking technologies can provide real-time visibility of the movement of materials while in transit.
- Simulation: New advance planning software that works on real-time data can help understand changing customer needs and focus group tools that can forecast the correct market requirement. This helps in avoiding overstock or stock-out situations.
- Network planning tools: These tools can help supply chain planners make faster decisions. The tool assesses the location of raw material sourcing, production unit, storage unit, and distribution network, sales points regarding volumes and capacities, and suggests better locations if sales trend is shifting from one geography to another or for new emerging geographical locations.
- Access to transactions: Blockchain technology can enable ease of transaction on each level from raw material till end distribution. And all the document, video proofs can really be stored on each transaction level. This technology also helps in solving the counterfeiting problem.
- Adding efficiency: Face Recognition app, Geo Tracer, Geo Fencing App System, sensors, and other hardware tools can collect data over every movement and transaction, making data collection and analysis easier. Advanced warehouse management systems, robots, and driverless forklifts can help automate manual processes, making them faster, accurate, and cost-efficient.
In conclusion, by leveraging advanced technologies like IoT, blockchain, and AI, and implementing diversification strategies, risk management frameworks, and stakeholder collaboration, the industrial supply chain can become more resilient, flexible, and agile, enabling businesses to respond quickly to disruptions and ensure continuity of operations. This will not only help businesses survive challenging times but also emerge stronger and more competitive in the long run!
(This article is written by Mahesh Fogla, Executive Director, Patel Integrated Logistics Ltd, and the views expressed in this article are his own)
