Disruptions will make digitization a priority in 2022

by Emily Atkins

Digitization has been an objective for many organizations offering supply chain services over a number of years. However, with the acceleration in e-commerce, combined with the disruptions caused by the pandemic, the need for visibility into operations has never been greater.

And the complexity of these operations just keeps increasing. “Companies are realizing more and more that thousands of decisions with dozens of parameters must be made every day. Experienced managers alone do not help,” said Ralf Duester, who serves on the board of supply chain software provider Setlog.

“Companies need to trust new technologies, such as artificial intelligence, to make decisions. The best of the best will automate processes more and take advantage of artificial intelligence in prescriptive analytics and autonomous agents to gain efficiencies. Managers will adopt supply chain software technologies to increase their companies’ resilience and competitiveness. Companies can generate speed from planning to delivery, reduce buffers and manage processes more efficiently.”

Competitive advantage

Supply chain is becoming a competitive advantage for companies that can adopt technology quickly. “Rapid adoption of increasingly sophisticated supply chain tools and technologies will provide the higher level of agility and reaction times the supply chain demands, especially in such a dynamic market impacted by freight and logistics log jams, unplanned disruptions from Covid and challenging market dynamics,” said Don Hnatyshin, senior vice-president, supply chain at electronics producer Molex.

“Companies will need to leverage new tools such as autonomous planning, which can be more responsive than humans (based on algorithms developed with human expertise), for modelling and scenario planning. Additionally, network optimization tools will provide similar capabilities to execute responsible global manufacturing, operations, and supply chains. Many of these models require the development of digital twins to replicate the physical footprint or activity to enable more Artificial Intelligence and Machine Learning options and added efficiencies in the future.”

Digitization for agility

The researchers at ABI agree, pointing out companies that have been putting off automation will now make it a priority, primarily due to global supply chain disruptions. “There is now a sharp awareness among executives that disruptions can happen at any time and that supply chains need digital solutions to make them agile and resilient, while providing end-to-end visibility,” ABI pointed out.

“Additionally, as economies continue to recover from the pandemic and adapt to many changes in demand and supply, more companies are expected to establish processes like multi-echelon distribution networks, centralized planning, simulation capabilities, and scenario planning.”

From the consumer’s perspective, now that they know what supply chain is, companies will be able to use it as marketing and sales collateral by brands to win business. “It’s not just their tech is better or performance is stronger, but that they can out-deliver their competition and meet their customer’s expectations,” said Will Peabody, account executive at Rapidratings.

“Previously the consumer didn’t even know this variable was out there. Now a more educated consumer will come to expect quick, accurate delivery. I expect to see a lot of commercials mentioning not just how great the offering is – but an increased emphasis on how accessible the benefits are to the consumer.”