Putting Supply Chain Intelligence to the Test
Supply chain innovations are advancing rapidly as a byproduct of the turmoil caused by the COVID-19 pandemic. While the sheer depth, breadth and scope of the disruption is unlike anything we have experienced in our careers, most supply chain professionals are adept at risk mitigation. Why should 2021 be any different?
After all, assessing, planning and responding to risk is part of our DNA. We’ve honed these skills in response to a litany of supply chain interruptions triggered by natural disasters and supply constraints, as well as geopolitical or financial events. We’re continually developing critical knowledge processes to prepare for the unexpected, which requires use of the latest tools and technologies.
The pandemic, however, is a real game-changer, testing our collective supply chain IQs. We now see what happened when limited visibility and insufficient insights intensified the effects of COVID’s long-lasting cataclysmic chaos. According to a recent analysis by Goldman Sachs, the current semiconductor shortage, which was exacerbated over the past 18 months, is impacting 169 industries, ranging from automotive and consumer tech to boatbuilding, breweries and even soap manufacturing.
Looking on the bright side, we have witnessed the transformative powers of e-commerce and digital transactions in taking customer convenience, ease of procurement and delivery speed to the next level. The impact of positive business-to-consumer (B2C) experiences has changed customer expectations across our business-to-business (B2B) world forever. It’s time for us all to take stock in our supply chain strategies and develop new ways of thinking, including a dedicated customer focus to plan and prepare better for whatever lies ahead.
Risk and Response: Moving Goalposts
While the tenets of risk assessment and response remain the same, the goalposts have narrowed. During the pandemic, companies were judged by the speed and agility with which they assessed, responded to and mitigated risk. As many organizations still are struggling to regain their footing, those with a customer-first mentality adjusted their business and/or delivery models fastest to meet unprecedented demands in extraordinary times.
The ability to deliver consistent B2C customer experiences will separate the winners and losers in the post-pandemic supply chain game. This requires new levels of intelligence drawn from savvy tools capable of capturing data at the speed of business while producing real-time insights that go well beyond just the physical movement of goods.
A holistic supply chain view starts with valuable and timely updates on sourcing and procurement strategies. It then extends to the factory floor to ensure the right level of talent can guide manufacturing and quality processes. Equally important: do not downplay the last mile of logistics, which generated more than a few surprises over the past year. In the future, supply chain success won’t be evaluated by just the movement of goods, but rather the bi-directional movement of real-time information to facilitate faster, better business decisions.
Supply Chain 4.0: Anchored by Digital Technologies
Supply Chain 4.0 holds the promise of heightened intelligence, in alignment with Industry 4.0, and increased use of sensors, automation and data analytics. Several years back, McKinsey & Company described Supply Chain 4.0 as the next-generation digital supply chain. As a major change agent for the new way of conducting business, Supply Chain 4.0’s digital-first approach is designed to improve customer convenience, increase visibility, reduce costs and drive process efficiencies.
In 2021, while all of these attributes still hold true, the bar has been raised considerably. Real-time information from smart devices, sensors and machines will proliferate new and increasingly robust data sets, which need to be mined, analyzed and matched with machine learning and artificial intelligence (AI) to drive predictive and prescriptive analytics. The result: far-reaching and close-up analysis of business implications and impacts—even before decisions are made.
Supply Chain 4.0 places extreme emphasis on the data ecosystem, so it’s imperative that the right information is flowing at the right speed, and at the right time. While easier said than done, the heavy lifting occurs in determining which data attributes produce the most meaningful business insights. The most critical data attributes identified several years ago now have become part of the ecosystem foundation. Pay attention to the additional attributes that are emerging; they can enrich the ecosystem, leading to smarter decisions and competitive advantages.
For most organizations, the biggest barrier to fully realizing greater levels of intelligence made possible by Supply Chain 4.0 begins and ends with their data ecosystem. Fortunately, there is an abundance of valuable lessons from others to help navigate the journey.
Applying Today’s Lessons to Tomorrow’s Supply Chains
Over the years, I’ve spent a lot of time exchanging ideas and experiences with supply-chain peers across a variety of industry segments. Many of these conversations have informed my point of view, especially when it comes to focusing on the customer experience. It’s no surprise to see e-commerce and retail companies dominate Gartner’s Supply Chain Top 25 each year. In 2021, for instance, Gartner ranked Colgate-Palmolive, Johnson & Johnson, Nestlé, PepsiCo, Walmart and L’Oréal in its top 10 for demonstrating unprecedented levels of agility and flexibility in rising to the challenges of the pandemic and other macroeconomic factors.
There’s a lot of practical knowledge and street-wise wisdom to be gleaned from how these companies operate. They clearly understand customer value and continually place a priority on investing in technologies that drive supply chain resilience, agility and innovation. Because of the nature of their businesses, these supply chain stalwarts also have put customers in the center of everything they do, which is a valuable lesson for everyone.
Another important takeaway from this past year is the realization that supply chain logistics are more fragile than anyone expected. Of course, we couldn’t have anticipated a nearly complete shutdown of international flights for an extended period of time, as well as the massive traffic jam caused by the container ship stuck in the Suez Canal. Armed with what we now know, it’s clear that smarter decisions about logistics networks must be part of every supply chain discussion.
Designing for Smarter Supply Chains
According to the 2021 Supply Chain Insight Global Survey from IHS Markit, nearly two-thirds of global supply chain leaders reported the need for better technology, platforms and data to enable and deliver overall supply chain objectives. At Molex, we understand the pivotal role supply chain intelligence plays in ensuring supply chain resilience and agility. That’s why we continue to make strategic investments to strengthen our knowledge, platforms and processes.
We are committed to world-class Design for Supply Chain principles anchored by a customer-first mindset and methodology. We’re extending our data-gathering and correlation capabilities to help our practitioners identify the most useful data attributes while seeking new and innovative ways to synthesize the information flow and enrich our data ecosystem. These are critical endeavors because everything Molex purchases and manages as part of our global supply chain influences how effectively we respond to customers.
Since customers come first, we will continue to apply the latest innovations, along with years of experience as supply chain professionals, to extend real-time visibility and risk mitigation. By the end of this calendar year, we will share important progress across our intelligent digital supply chain, which gets smarter every day.