The modern world is replete with challenges. Whether it’s economic uncertainty, raw materials shortages, or excessive traffic along supply chains, there’s no doubt we still have some obstacles to overcome before things return to some semblance of normal. Fortunately, we live in the 21st century so technology can step in and help speed matters along! Indeed, technology is a lifesaver when it comes to supply chain management. Technology—when used in a meaningful and productive manner—brings value and utility to any organization. In this article, we’ll explore some common supply chain pain points and four types of tech to help your organization overcome them. Read it below.
Current Supply Chain Challenges
To win any battle, it helps to understand your opponent. In this case, the opponents are the myriad challenges of logistics and supply chain issues. To begin with, theft and mishandling are significant pain points for many organizations. Then there’s the raw material shortages and poorly planned routes. These can cause problems at the manufacturing, suppy, and transport stages. Inflation and rising costs certainly aren’t helping matters. This has changed how the global supply chain operates on a grand scale, necessitating further changes in the way companies operate. According to a 2021 New York Times report, some of the supply chain issues are only going to worsen in the near future. To get ahead of the game, it’s now more crucial than ever for companies to find ways to streamline and operate efficiently along their entire supply chain. Overcoming these challenges isn’t going to be easy or happen overnight, but with the right tools and talent accomplished well into the future.
In every organization, the Procure to Pay (P2P) system plays an essential role. Procurement works best when there’s transparency and efficiency along the way. Like its name suggests, P2P systems follow every step of the procurement process from requisition and purchase orders to contract negotiation and paying vendors. Leveraging it to your advantage can ameliorate some supply chain concerns. P2P is powerful because it provides a single place for acquiring goods, requisitioning supplies, and managing contracts. This can help you keep tabs on reducing costs, human errors, and being more efficient with the early stages of managing your supply chain. Investing in a quality P2P system will help with some of the challenges companies are currently facing worldwide.
Lost sales. Not enough stock. Running out of stock. Revenue loss. These are all some of the side effects of poor, inaccurate forecasting. Accurate forecasting can be quite challenging. With a good forecast, managers can make sure the right products are available at the right time, place, and quantity for their customers. Several outside forces can affect forecasting accuracy. Consider demand patterns changing, supplier reliability, and inventory levels. To get ahead of these problems, managers have to find ways to adapt to these changes. Producing accurate forecasts depends on it. Getting your forecasts right is a very data-heavy endeavor. Forecasting involves looking at previous supplier data, tactical planning, and extensive inventory management. The last thing any company wants is to short its inventory so that it doesn’t have enough supplies when it comes time to do shipping. Most of the time, forecasting relies on qualitative and quantitative methods. Qualitative methods look at insights and industry expertise to draw conclusions about what supplies might be needed. These methods include looking at historical data, talking to experienced staff, and performing some market research. Quantitative methods will look attic data extensively. Often they will use cloud-based software suites and programs to help assess data effectively. Many of the methods employed here are going to be quite complex and difficult to perform without a powerful software tool. These include moving average forecasting and exponential smoothing. A more precise method, auto-regressive integrated moving average (ARIMA), it’s played quite often as well. Finally, the multiple Aggregation Prediction Algorithm (MAPA) is a rather new forecasting method of quantitative forecasting that looks only at seasonal factors.
Understanding your demand while reducing wasteful spending, risk, and improving efficiency is a pretty tough task. And sometimes rising to the occasion requires a powerful software or cloud-based solution
Artificial intelligence is a wonderful tool for modeling your supply chain. Along with forecasting, understanding demand is crucial for gaining insight into plans you need to make for the future. These days, companies need to make sophisticated models to help them understand future demand. Since demand drives supply, having a keen understanding of your company’s own demand model plays a critical role in how to run the logistics side of your business. Demand modeling helps you make better decisions, improves resource allocation, and ultimately leads to optimization for your supply chain needs. Using artificial intelligence and historical data, the demand modeler looks at past history, seasonal factors, market conditions, business trends, and prices to create a robust demand model. At the end of the day, using a demand modeler leads managers to make proper, informed decisions about everything from resources to inventory and beyond.
Impact and Remote Monitoring Devices
It isn’t just on the procurement and logistical side of things where technology can improve operations. In-transit goods and cargo are sometimes at very high risk for mishandling. To get around these problems, stop them as much as possible, and implement plans for prevention, companies need to use tools. Thanks to smart technology and the compact nature of impact recorders, remote monitoring is a great way to track your shipments and monitor for damage. Here are a few of the most common problems these handy devices can aid with preventing:
- Water damage
- Temperature abuse
- High humidity
- Lost shipments
Whether you’re using RFID tags to track lost shipments, impact recorders to monitor shocks and damage, or temperature indicators to fight back against cold chain abuse, using devices is an integral part of protecting your cargo as it moves along the supply chain.