GUEST COMMENT How to master the art of supply chain digitalisation

Over the past few years, businesses have been hit with one supply chain disruption after another, including global supply issues, the pandemic, increased inflation, and talent shortages. It is fair to say that the recent times have highlighted the vulnerabilities in supply chains.

John Kitchingman, managing director, EuroNorth at Dassault Systèmes, reviews how to make supply chains more resilient and sustainable in 2023.

Improve data transparency for ecommerce
The rise of ecommerce has resulted in radical change in customer expectations: today’s customers expect products to be readily available both online and in-store, delivered to their homes in minutes and – increasingly – designed using sustainable materials sourced in an ethical way.

These expectations are increasing supply chain complexity from the source to the end user. In spite of this, many retailers are still relying on spreadsheets and disconnected systems for their planning needs. In a world where data transparency is key to supply chain preparedness, online retailers must implement tools that give them an immediate view of all the information they need across their entire supply network. If not, they run the risk of losing customers to competitors with better data visualisation and management solutions.

Complex supply chains need tools that simplify data management
The more complex your supply chain, the more critical optimisation becomes, especially in the retail industry where profit margins are thin. Optimisation and KPI-based planning will help you manage resources and constraints to improve delivery accuracy, save on logistics-related costs and meet business goals. Luckily there are now digital platforms that provide fully integrated end-to-end supply chain planning that can be adjusted to meet each company’s unique requirements.

These sophisticated tools enable companies to integrate organisational processes both across functions and the value chain, while also aligning physical and financial flows with appropriate data processes. This provides transparency, insight, and consequently, control over business KPIs.

Make product design and development sustainable
The climate crisis has brought a slew of new challenges for product design: scarcity of resources that were previously considered readily available, increased pressure to reduce water usage in the manufacturing process and a shift away from petroleum-derived materials are all impacting retailers’ supply chains.

Product design teams need to be much more mindful of the materials they use and the carbon footprint associated with accessing them in the first place, including mining, fracking or pumping them from the ground. Then, they need to assess the carbon emissions and waste associated with getting these source materials delivered to the manufacturing plant, as well as the carbon cost of assembling these resources into one. This impacts the type of resources, geographical origins and working practices product designs will select at conceptual stage, which needs to be communicated to all parties involved in the development of the product. Product design teams also need to ensure that they meet new regulations on product lifecycle management, including right to repair rules.

Supply chain managers involved in the routing, assembly and delivery of the products also need to ensure they are fully aware of the carbon cost and waste associated with every element of the value chain, including level three emissions that are notoriously challenging to track. To do so, they need to use solutions that easily translate information across divisions, including product design, manufacturing, the partner ecosystem, all the way down to sales. By using virtual twin experiences, supply chain managers can get a bird’s eye view of the impact each product can have on the whole supply chain and create efficiencies to reduce the negative impact each new product has on the planet.

Now is a perfect time for retailers to review their ways of working and implement tools that increase data transparency, information sharing and visualisation to ensure their processes are fit for purpose. This drives better, faster decision-making, increases operational resilience and the potential to innovate. Those who do so will be able to harmonise people, planet, and profits – and withstand any further pressure on their increasingly distributed supply chains today and in the future.

Disruptive supply chain innovations for 2023
We believe these four clusters of digital technologies will enable the end-to-end digitisation of supply chains:

• Commodity IoT sensors to connect/exchange data with other systems over communication networks, providing transparency and an accurate, granular overview of the network for efficient management of processes, assets, and people.
• More data, faster processors and cloud computing, and access to advanced algorithms to derive insight, model, analyse and make accurate predictions to provide flexibility and efficiency.
• Robotics, cobotics, business process management and robotic process automation, image recognition, natural language processing and conversational automation to automate physical and non-physical processes for faster, efficient processing.
• Analytics platforms that combine disparate IT and OT data sources into a single system and enable performance management reporting to provide a strategic overview to top management and facilitate ad-hoc problem solving by frontline staff.

John Kitchingman, managing director, EuroNorth at Dassault Systèmes